House of Representatives
4 May 1966

25th Parliament · 1st Session

Mr. SPEAKER (Hon. Sir John McLeay) took the chair at 2.30 p.m., and read prayers.

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– I ask the Prime Minister: Has he been advised of the decision of the British Chancellor of the Exchequer to urge people with money to invest not to invest it in Australia? In other words, does he know of the decision of the British Government to restrict the flow of capital to Australia, not by compulsion but by persuasion? If so, will he advise the House of the effect of this decision upon Australia?

Prime Minister · HIGGINS, VICTORIA · LP

– The Australian Government had been aware for some time that the United Kingdom Government was contemplating restraint of the flow of investment capital to Australia and to certain other developed countries which had been excluded from such restraint. This present action flows, of course, from the difficulties with which the United Kingdom has had to contend in relation to its own balance of payments. Naturally, we regret that the United Kingdom has found it necessary to take this action. We were consulted beforehand and we are appreciative of the fact that thorough consideration was given by the British Prime Minister and the Chancellor of the Exchequer, as well as by their colleagues, to the views which were put by the Australian Government. I think it would be useful if at the end of question time my colleague the Treasurer gave a rather more detailed answer than I shall attempt to give now.

Australia regrets the decision for a variety of reasons, some obvious enough and others not quite so apparent. We regret the decision because our own development has been greatly assisted by the very substantial flow of British capital which has come to this country in the post-war period. Much of Australian industry was assisted by British capital in its earlier years. The United Kingdom has ranked as probably the principal contributor of investment capital to Australia. There is another factor which causes me personal regret. In association with this flow of capital there, has been the entry, on either a permanent or long-term residential basis, of many executives - men of skill, capacity and character - from the United Kingdom. Their presence with us has been a valuable factor in cementing the British character of our community, and we have valued the contribution that they have made. I would therefore hope that these restraints will be short-lived and that we shall not experience so serious a diminution of the investment of British resources here as to weaken in any way the strong ties which exist between our two countries. We do appreciate the difficulties and we wish the British Government well in the firm action it is taking to preserve the strength of sterling. Australia has tried to be helpful by holding the major part of its own reserves in sterling. Indeed, we are the largest holder of sterling in the world and, therefore, because of our own prosperity and external strength we are able to assist the United Kingdom. It is all the more desirable, therefore, that without too much interruption there should be either the maintenance or an early resumption of the investment flow which has meant so much to both countries.

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– Is the Minister for Health aware that some States have felt themselves unable to find the money to construct at their ports, incinerators which are vital to the proper operation of the quarantine service? Would it not be possible for the Commonwealth Government to accept this financial responsibility in order to ensure that the quarantine service is not endangered?

Minister for Health · BARKER, SOUTH AUSTRALIA · LP

– The disposal of ships* garbage at Australian ports is the responsibility of the port authorities, which are State development instrumentalities. However, it has become increasingly clear in the constant review which goes on of our quarantine defences against the introduction of exotic diseases that the existing methods of disposing of garbage from overseas ships are becoming increasingly unsatisfactory. As the honorable member for Wakefield knows better than most, the introduction of exotic diseases, such as blue tongue or foot and mouth disease, would be absolutely disastrous for the economy of this country. Therefore the Commonwealth has decided to offer to all the States, except Western

Australia, the full cost of building incinerators at selected ports. This offer includes the cost of ancillary buildings, structures, foundations, fences and that sort of thing. It includes also half the cost of access roads but not the cost of the land. Un accordance with existing responsibilities

Mr Curtin:

– What paragraph is this?


– This is a very important matter, and I should have thought that honorable members opposite would be interested. In accordance with existing responsibilities it will be the responsibility of the port authorities to operate and maintain the incinerators and to transport the garbage to them. The Commonwealth hopes that the incinerators will be built with all possible speed. I perhaps should say for the benefit of the Western Australian members of this House that the reason why Western Australia is not included in the offer is that the method of disposing of garbage there - that is, by dumping at sea - is considered satisfactory from a quarantine point of view.

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– I direct a question to the Minister for Territories. Has his attention been drawn to the recent statement by the Administrator of Papua and New Guinea concerning self determination for that Territory? Was the speech made with the Minister’s approval and was the Administrator quoting Government policy?

Minister for Territories · MCPHERSON, QUEENSLAND · CP

– I have seen Press reports of the statement made by Sir Donald Cleland. As a matter of fact, I have seen several different versions of it. I am not prepared to comment on the Press statements. I appreciate the interest of the honorable member in Papua and New Guinea. Of course, considerable discussion has taken place on a statement that I made in the House on 21st April as the result of a meeting I and several of my colleagues had with the Select Committee on Constitutional Development appointed by the House of Assembly for Papua and New Guinea.

The statement which I made on 21st April indicated that the Government is continuing the policy, in relation to political development in Papua and New Guinea, announced by the former Prime Minister, Sir Robert Menzies, some years ago. Sir Robert said then that the people of Papua and New Guinea would be permitted to choose their own political future in their own way and in their own time, and that they would not be subject to outside pressure in doing so.

I point out to the honorable member that a number of the expressions and criticisms which have come as a result of this statement seem to want to put a tag on the sort of political future that we have to arrive at with the Territory. These ideas and attitudes have resulted in some very unfortunate effects in other parts of the world. I point out also that we in Australia have been very fortunate that our political situation has been able to evolve slowly and in our own way. We have not been subject to all these outside interferences. I believe that the people of Papua and New Guinea deserve the same privilege.

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– I address a question to the Minister for Trade and Industry. It concerns trade with Communist China. I ask: Will my right honourable friend accept my assurance that a considerable number of Australians are deeply concerned with both the moral and physical propriety of exports from this country to Communist China? While recognising the argument of the Government that discontinuance of this trade by Australia alone would simply enable other countries to take over Australia’s trade activity, I ask: Can the right honorable gentleman say whether a condominium to control trade has been considered by those nations which now trade with Communist China and which also recognise the military and predatory policies of Communist China?

Minister for Trade and Industry · MURRAY, VICTORIA · CP

– In the first place. I accept the honorable member’s statement that there are people in Australia who hold the kind of views that the honorable member has expressed. These people are dissatisfied with the present trade with China. They believe that it is wrong. I accept this. These people are to be found in all sectors of society and of all political views. Of this I have no doubt. The point is that the government of a country has the responsibility to decide what in its opinion is the proper policy for it to pursue in respect of a certain matter. The Government of this country holds the same view that the Governments of all other countries in the socalled Western world hold other than the United States alone, and that is that it is not necessary to prevent the sale of certain items other than prescribed strategic items to Communist China or other Communist countries.

Mr Calwell:

– Conversely, is it a good thing to trade with them?


– It is not for me to say whether this is a good thing. I say this to the Leader of the Opposition and to the honorable member for Moreton: I know of no incident in history where peace and goodwill have been fostered by a government setting out to deny the people of another country ordinary foodstuffs. This does happen, of course, in an active state of war. I know of no instance where other than ill will and the belief that a government is seriously setting out to harm not another government but the people of another country have resulted when ordinary foodstuffs have been denied that country.

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– I ask the Minister for the Army: Now that construction of the Army base in Townsville has begun, when does the Minister expect it to be completed and when does he expect the full task force to be finally established there? Will our overseas commitments have the effect of slowing down the programme?

Mr Malcolm Fraser:

– The honorable member has shown an interest in this matter. Overseas developments are certainly not slowing down what is happening in the Townsville area. This matter, as the honorable member realises, is being handled largely by the Department of Works. Officers of that Department have told me that the completion date of the first stage of the project has slipped from December 1966 to July 1967. A battalion will be going into the area as soon as the first stage is completed in July 1967. However, the final completion date for the task force complex, December 1968, stands.



– Can the Minister for Trade and Industry say whether a study is being made of the possibilities of large-scale production and sale of “ Stay-Fresh “ milk? Will he encourage the Australian Dairy Produce Board to investigate the economics of sending unrefrigerated milk in bulk tankers to Asian countries? Is he aware that in the whole of the Ginza in Tokyo there is not one milk bar? Will he therefore encourage the investigation to which I have referred with the object of diverting quantities of butterfat from the export butter market?


– I have to confess that I have not done a bar crawl in the Ginza so I cannot confirm what the honorable member says about milk bars there. I do not know the brand name of the milk to which the honorable members refers, but I take it that it is a sterilised normal whole milk. This product, a development of recent years, is one in which a considerable but not tremendous trade has developed. I agree immediately that there should develop in all Asian countries an increasing market for liquid milk. Our own Australian Dairy Produce Board has been quite active on its own initiative in developing this kind of market with reconstituted milk. Powdered milk from Australia, butter oil from Australia, is reconstituted and sold as liquid milk. This has been a very good enterprise. As I said in replying to a question yesterday, I think the prospects for sales of all dairy products other than butter are quite bright. I agree that the Government and the Dairy Produce Board should - and I am sure they will - co-operate in investigations to discover whether a market can economically and profitably be created in Asia for sterilised whole milk.

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Mr Allan Fraser:

– I ask the

Minister for Social Services whether in framing his recommendations for the Budget he will consider altering the conditions governing the granting of supplementary assistance so that some help can be provided for pensioners who are nominally home-owners but who actually face very heavy outgoings each week. Will he have particular regard to situations where there is left only one partner of a marriage, that person having to meet repayment instalments on a house, only a small part of those instalments going towards the capital cost, the major part representing interest and so capable of being considered in the category of rent?

Minister for Social Services · NEW ENGLAND, NEW SOUTH WALES · CP

– The supplementary assistance has been directed primarily towards persons who it is thought have the most need in the pensioner community. There is already some dispensation for home ownership in the exemption from the initial assessment of means of homes owned by persons applying for pensions. However, I shall be happy to look into the circumstances of those pensioners in the category to which the honorable member has referred, and I shall bear this in mind during the preparation of submissions for the forthcoming Budget, as the honorable member has suggested.

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– My question is directed to the Minister for the Army. Has he seen a recent statement by the Deputy Leader of the Opposition that the Government has resorted to national service training to obtain an army on the cheap and further that the Army should accept and train some of the 20 per cent, rejected for national service training on educational grounds? I ask the Minister whether the pay and conditions of service for national servicemen are satisfactory and whether the literary level required is too high.

Mr Malcolm Fraser:

– The statement attributed to the Deputy Leader of the Opposition is quite inaccurate. As honorable members know, the conditions of service for both national servicemen and volunteers in the Regular Army are identical. The pay of an Australian private is now better than that of his counterpart in the United Kingdom, Canada, New Zealand and the United States of America. Because, although conditions of service were extremely good, the volunteer system was not attracting sufficient men to meet the security risks that this country runs, national service training had to be introduced. The Deputy Leader of the Opposition should know that his statement was quite inaccurate, because he knows. F think, something of what is happening in the expansion of the Army at the present time. What is occurring is certainly not being done on the cheap. The funds authorised for new buildings, a great proportion of which provides accommodation for people in the Army, have risen from $48 million in last financial year to S88 million in this financial year. In the HolsworthyIngleburn complex in the honorable gentleman’s own electorate, authorisation has increased from $7 million last financial year to $17 million in the current financial year. Large sums have been spent on the improvement of conditions and quarters in the Army.

In relation to the other matter about which the honorable member for Phillip has asked, both my predecessor and I have dealt with this point about the educational and intelligence tests on more than one occasion, but honorable members opposite, including the Deputy Leader of the Opposition, keep returning to it in an effort to show that the entry standards should be lowered. The honorable gentleman and his colleagues well know that the present standards were set as a result of experience in the Second World War. It was decided as a result of wartime experience that if standards were lowered people taken into the Army on the lower standards could become an administrative liability and a danger to their colleagues. The intelligence test used, if applied throughout the whole Australian community, would exclude only the bottom 3 per cent. The educational tests are equivalent to the standard in grade 4 or grade 5 at primary schools in Victoria, corresponding to the age of about 9 or 10 years.

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– My question is addressed to the Minister for Defence. I ask: Is it correct that a representative of a United States bonding company has recently visited Australia to investigate the financial obligations of certain American contracting firms in relation to works and services at the North West Cape communication base? Is it correct also that the Australian Government has made or is making inquiries into the same matter? Finally, can the Minister tell the House whether, as a result of investigations by a representative of the bonding company and of any inquiries being made by the Government, any finality has been reached in regard to moneys owed to suppliers and others for work performed at or in connection with the base and, if so, whether the debts are likely to be completely discharged?

Minister for Defence · PATERSON, NEW SOUTH WALES · LP

– I have no personal knowledge of a visit to this country by any United States bonding agent. Such a visit has not been officially brought to our attention. In answer to a question asked some time ago, 1 pointed out that the debts that are known to exist in respect of the construction of the North West Cape communication station are debts owed by the American contractors to their Australian subcontractors. The Government has no legal liability. Nevertheless, the Department of Defence is at present actively pursuing the matter to ascertain the full contractual responsibilities of all those involved in the project. When these inquiries have been completed, we may have some opinions to offer. At this juncture, the voicing of any opinion would be premature.

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– Has the attention of the Minister for External Affairs been drawn to an assertion recently made by the honorable member for Yarra that Australian military action in South Vietnam has no legal justification under the South East Asia Treaty Organisation agreement, and, further, that such action would be contrary to Article 53 of the Charter of the United Nations unless specifically authorised by the Security Council? Has the Minister considered those assertions?

Minister for External Affairs · CURTIN, WESTERN AUSTRALIA · LP

– I will not attempt to speak on behalf of the honorable member for Yarra. He can do that for himself. If I interpret his sayings correctly they are that the action we are taking in Vietnam is in conflict with the United Nations Charter. In support of that assertion he cites, particularly, Article 53. As a member of the Australian delegation I had the privilege of working at the San Francisco conference on the committees that were actually engaged in drawing up the resolutions and, subsequently, in drafting the terms of the Charter on this subject, so I can speak with some first hand knowledge, as well as with the authority of such com mentators as Goodrich and Hambro in their commentary on the United Nations Charter. The situation was that provisions had been made for an enforcement system under the authority of the Security Council. After those decisions had been taken and the drafting done, some of the nations which were already members of regional organisations, particularly the Latin American States, raised the position of their own regional organisations. So it was stated in a new chapter that none of these provisions in respect of enforcement precluded the existence of these regional arrangements. Article 53 went on to say that, indeed, the Security Council could, if it chose, use a regional organisation for its enforcement action. If the Security Council chose to do this, the regional organisation was authorised to take enforcement action, but it should not take enforcement action unless so authorised.

Article 53 has no direct relevance to the situation of Vietnam and Australia’s membership of S.E.A.T.O. These arise from a wholly different set of conditions. Article 53 applies to enforcement action authorised by the Security Council. The situation in Vietnam and our position under S.E.A.T.O. arise under Article 51, which is contained in a previous chapter of the Charter not dealing with regional organisations. Article 51 appears in the chapter dealing with enforcement and provides that nothing in the enforcement provisions of the Charter shall impair the inherent right of individual or collective self-defence. But Article 51 stipulates that if any nation or group of nations exercising their inherent right of self-defence against aggression did take action, they should report that action to the Security Council and, if the Security Council were capable of replacing their selfdefensive action by an enforcement measure of its own, the self-defensive action gave way to the Security Council action. The situation in Vietnam is that in the face of aggression, in the exercise of the inherent right of self-defence, the aggression has been resisted. The measures taken to resist the aggression have been reported to the Security Council. The Security Council has been invoked, but it has found itself incapable of taking enforcement action. So the action taken in self-defence continues under Article 51 and thus continues quite properly and in complete conformity with the terms of the Charter.

Dr J F Cairns:

– I ask the Minister for External Affairs: Did his Government notify the United Nations in specific terms that it was sending troops to Vietnam in accordance with an obligation to the South East Asia Treaty Organisation? If his Government did not notify the United Nations in these specific terms and if he claims to have acted under S.E.A.T.O., why was S.E.A.T.O. not mentioned at all?


– I am sorry that I have to keep on repeating an answer which I have given on several previous occasions, which my predecessor gave and which the former Prime Minister gave. We notified the Security Council that we had taken action in accordance with our international obligations. Our international obligations are comprehensive. They include our obligations under the United Nations Charter and our obligations to S.E.A.T.O.

Mr Calwell:

– Was the Government specific?


– The Leader of the Opposition knows this quite well, because the communication to the Security Council has been produced and read to the House on several occasions. It said “ in conformity with our international obligations”. It did not mention any one of those obligations in a specific way, because it was not considered necessary to do so. The term “ international obligations “ is comprehensive and fully met the needs of the occasion.

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– I wish to direct my question to the Minister for Social Services. He will recall my continued representations to secure the establishment of a sub-regional office of his Department in the Wimmera electorate so as to provide my constituents with immediate personal service for all their social service requirements and at the same time to minimise their undue travelling. As I believe that other representations have been made on this subject, I ask: Is the Minister in a position to inform me when a sub-regional office is likely to be established?


– It is a fact that the honorable member has made frequent a>nd repeated representations to me for the opening of an office in particular in the city of Horsham, within the Wimmera electorate. It is as a result of his representations that an officer of the Department of Social Services is now visiting Horsham once a week from the office of the Department in Hamilton. At this stage, the work load of the officer at his weekly visits does not indicate that there would be sufficient work to justify the Department opening a full subregional office in Horsham. However, in view of the honorable member’s frequent representations, I will continue to keep the matter under review. I have had no other representations on this subject. ( assure the honorable member that the volume of business transacted by the officer of the Department who is in weekly attendance in Horsham will be the criterion upon which we will decide whether in the future a subregional office can or cannot be established there.

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– I preface my question, which is addressed to the Prime Minister, by staling that I have received hundreds of letters from constituents complaining of the inadequacies in the education system. They point out that State Governments are spending 20 per cent, or more of their Budgets on education, but problems such as over-crowded classes, under-trained teachers, insufficiently equipped schools and inadequate buildings still exist’. They urge financial support from the Commonwealth Government to improve the situation. I ask the Prime Minister: Can he give me any encouraging information to convey to the people who have written to me on this subject?


– I do not wish to sound critical of my colleague’s State Government, but I gather that the proportion of the Budget devoted to education by the South Australian Government is the lowest in the Commonwealth, except only for Tasmania. Each Government, of course, has the right to decide how it apportions its revenue, but if there is a greater incidence of complaint in South Australia than is found in other States, part of the explanation may lie in the direction I have mentioned. The Commonwealth Government has been taking an increasing interest, and making increasing financial provision, in the field of education, going beyond anything contributed by any prior Government in the history of the Federation. Consistent with the resources that have to be appropriated to the other responsibilities of government it is our intention to give such increasing assistance as we can.

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– My question to the Minister for Civil Aviation concerns a submission by the Gliding Federation of Australia for an increased grant for next financial year. By way of preface I should like to say that ^gliding is now the main doorway into a career in aviation for hundreds of young people who are unable to afford the cost of learning to fly powered aircraft. In view of the present acute shortage of suitable personnel for training as pilots and technicians, and also in view of the fact that the total amount requested by the Federation is estimated to be only half the cost of training one navy pilot under the present naval re-equipment scheme, will the Minister give favorable consideration to the request from this very important and worthy organisation?

Minister for Civil Aviation · DARLING DOWNS, QUEENSLAND · LP

– I can assure the honorable member of my interest in the gliding movement, as I have been patron of the Queensland Soaring Association since it was first established and 1 participate in its activities on occasions. In fact, it is my opinion that, as a tranquiliser, soaring is even better than spear fishing. On the serious side, I do agree that gliding provides a good basic training in a number of principles that are useful for continuing an active profession of power flying. The Gliding Federation of Australia has made a submission. I received this submission in my office only about half an hour ago. The submission will be studied in conjunction with other matters in the Budget. At present the Government provides a small subsidy for gliding in Australia for a variety of purposes, and careful consideration will be given to the submission when the Budget is being prepared.

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– My question is addressed to the Prime Minister. He will recall that in the past it was an offence to discuss troop movements. Now that aerial combat is taking place in Vietnam why has he, as Prime Minister, allowed Press, radio and television to report aerial troop movements at times prior to the departure of the troops for overseas?


– I am quite certain that those concerned with security arrangements would have seen that there w;is no disclosure which would have put in jeopardy the security of Australian troops. It was not a matter of my own decision on any occasion as to what security arrangements should be followed. I am quite certain that those responsible for these matters had at all times the security of our troops uppermost in their minds.


– I direct a question to the Minister for the Army. Now that’ the Australian army commitment to Vietnam has been increased from a battalion group to a brigade group of 4,500 men, what provision has been made in Vietnam for hospitalisation and surgery for military personnel? Has the Government yet decided on a policy for future recruiting and training of Army doctors so that Army general hospitals can be provided if required?

Mr Malcolm Fraser:

– The honorable member will recall that when the units making up the task force were announced it was stated that a field ambulance would be going to Vietnam with the task force. Beyond that, the major medical facilities will be provided by the United States, as they have been up to the present point of time.

The Department has been examining for some time the needs and what should be done to attract a sufficient number of doctors with a wide experience into the medical service. The matter that has hindered this recruitment perhaps more than anything else has been the absence of a large, fully equipped hospital in the Army’s own control. It is planned that a 200 bed hospital will be built in the Holsworthy area and it should be completed by about 1970. In the interim various other matters have been done to overcome any particular difficulty that could arise at a particular point of time.

Citizen Military Forces members of the medical and dental professions have been approached and there is a roster of people who have indicated a willingness to serve for limited periods, if this should prove necessary. Later, when the national service scheme has been running for some time, there will be deferred medical and dental students who will be undertaking national service. These also will reinforce our facilities in this matter. A few weeks ago an approach was made to existing hospitals in the States on the basis that we would pay for an additional resident doctor if they would be happy to have the additional resident doctor on their own staff. In return we would ask the hospitals to provide a doctor for various Army establishments in the surrounding region on a rostered basis. These are interim measures and it will be necessary to continue with them and possibly to review them until such time as the Army’s own hospital is completed.

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– My question to the Acting Minister for Supply follows a question directed to him yesterday regarding the future of the European Launcher Development Organisation in Australia. I ask: In the event of Darwin being accepted as a base for the future activity of E.L.D.O., will arrangements be made for the transfer to Darwin of specialists, technicians and other workers now engaged at Woomera on the E.L.D.O. project? If a base outside Australia is chosen and redundancy of employment occurs, will the Minister cause inquiries to be made in an endeavour to absorb specialists and other valuable employees on other work within Australia?


– I am afraid the honorable gentleman’s question at this stage is somewhat hypothetical. Nevertheless we have in mind the fact (hat if there is to be established at Darwin a launching site for satellites it will clearly need the transfer to that area of some of the technicians and scientists at present located in Woomera. What the division is likely to be I would not know; but I think it is clear that, in the event of the E.L.D.O. programme being discontinued at some future date, there will be in Woomera some surplus staff of proportions unknown at present. Every effort will certainly be made to retain them and every effort will be made to find an addi tional work load for the Woomera range. The honorable gentleman may have noticed in the Press reports appearing recently that the Japanese Government has sent two technical observers associated with the Japanese space programme to Woomera to examine Australian facilities. It is well known around the world that Woomera today is probably the best equipped and best serviced land based range outside the United States and the Soviet Union. I think there are good possibilities that we will be able to sell the service of the range to other users and, in this way, to maintain the considerable corps of highly skilled space and scientific technicians we have at that base.

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– My question is to the Minister for Health and is supplementary to that asked by the honorable member for Wakefield. If the method of disposal of ships’ garbage by dumping at sea, as practised in Western Australia, is satisfactory, can the Minister say why this method cannot be adopted in the other States, thus avoiding the cost of erecting, maintaining and operating incinerators?


– Unfortunately, in the other States the currents flow the wrong way. Instead of taking the garbage out to sea, they would bring it in to the shore.

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– I desire to make a correction. Yesterday, at question time, I drew attention to a statement in the Sydney “ Daily Telegraph “ that Australia’s balance of payments deficit for the first nine months of the year 1965-66 was $34 million less than it was for the first nine months of the year 1964-65. I am reported in “ Hansard “ as saying that it was $274 million more. This figure should have been $174 million. I corrected the figure on the “ Hansard “ proofs, and I am pleased to say that the Sydney “ Daily Telegraph “ has also corrected its figure.

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Ministerial Statement

Treasurer · Lowe · LP

– by leave - I should like to comment briefly on the measures relating to United Kingdom investment overseas which were announced yesterday by the Chancellor of the Exchequer, Mr. J. Callaghan, in his Budget speech. From the details we have, what the measures principally involve appears to be this:

  1. United Kingdom firms or individuals contemplating direct investment in Australia, New Zealand, South Africa and Ireland financed from the United Kingdom are being asked to examine their plans in the light of certain tests. The principal test is that the investment should hold promise of making a return in the form of export earnings or other income equal over two or three years to the original capital outlay.
  2. Where the proposed investment is considered to meet these criteria or where it is subject to special factors, intending investors are asked to discuss their proposals with the Bank of England.
  3. Where United Kingdom firms or individuals already have investments in these countries, they will be free to reinvest their earnings there up to the average level of recent years.
  4. The criteria that have been stated will not apply to small investments up to £stg.25,000 a year.

On the face of things the tests laid down for new investments abroad are stiff. 1 have noted that special factors applying to particular proposals will be taken into account.

The criteria appear to be essentially the same as those which now apply to investment in non-sterling countries with this important difference in that the latter class of investments can be made only from funds purchased in the so-called United Kingdom investment currency pool. This involves paying a premium at the present time of some 20 per cent., whereas funds for investment in the sterling area will be available at the official rate. Clearly, there will continue to be a very significant preference in favour of investment in countries like Australia. Again, non-sterling investments are subject to strict exchange control, whereas the Chancellor has said: “ I have decided against the use of compulsory powers because I do not wish to impair the voluntary principle which underlies the concept of the Sterling Area “. He also said: “ I shall continue to keep in touch with all four Governments about the effect of the programme on them “.

These measures are bound to have a restraining effect on the flow of British capital to Australia. How large that effect will be it is not however possible to see at this stage. The question will only become clear with experience. I have observed that, in his Budget speech, the Chancellor of the Exchequer, in announcing these measures, made a point of saying that he was speaking of the next year or two.

Members of the United Kingdom Government discussed their problem with us before deciding on the measures they would take. There were consultations in London at the official level and I exchanged a series of messages with the Chancellor of the Exchequer. I may say that we appreciated the opportunity they thus gave us to talk this matter over with them. They put their position to us very frankly and said that they felt they could not avoid making some further savings on the capital side of their balance of payments. For some time past they had been restricting investment in non-sterling countries severely and they had now reached the conclusion that there had to be at least some reduction in the flow to the developed countries of the sterling area.

We expressed a strong desire to avoid any disruption of the long-standing sterling area arrangements, which are based on co-operation and have worked to the mutual advantage of our two countries. We pointed out that while there has been a high level of United Kingdom investment in Australia in recent years there has also been some back-flow of capital from Australia on official account as government debts have been repaid or reduced from sinking fund operations, and there may well have to be more of this in the years ahead as debts reach maturity. Let me give some figures. In May 1965, we repaid £12,700,000 sterling. In February of this year we repaid £9,400,000 sterling, and the Sinking Fund is buying about £6,000,000 sterling each year. Moreover, the new corporation tax is certain to have some restrictive effect on

United Kingdom investment here - quite possibly a considerable effect.

As to the possibility of United Kingdom companies raising funds in Australia instead of sending them from home we said that share issues by subsidiaries of such companies operating here would be in line with our policy of welcoming opportunities for greater Australian participation in enterprises of overseas origin.

Borrowings in Australia by such companies could come within the guide lines mentioned by me in answer to a question last week. They are that where overseas businesses have been well established here over a long period they have often enough brought in substantial capital and have reinvested to a considerable extent from the profits they have earned in Australia. In all probability, they will have made and will still be making a real contribution to the progress of our economy and are doing so on terms which we can only regard as being fair to ourselves, even though they are also profitable to the overseas interests concerned. In such cases, we have long regarded it as quite the normal and proper thing for such enterprises to borrow to some extent from Australian banks or other institutions or on the market. They are, in other words, using and paying for the ordinary financial facilities of the country just as locally owned firms do and we can see no reason why they should not be able to use such facilities.

Again, there can be the case of new ventures starting up here which are bringing in capital of their own but which are also providing for substantial Australian participation in the shareholding of the enterprises. They may also contemplate borrowing in Australia a certain amount of the money they require for the development of their undertakings, as well as borrowing from sources abroad. Within the limits of our capital market to accommodate such borrowings, and keeping in view the needs of our own enterprises, we are inclined to regard this as also being a fair and reasonable arrangement. Necessarily, of course, arrangements for the financing of enterprises in Australia will take many different forms and it would not be possible to lay down detailed criteria as to what we would regard as acceptable in each and every case. What I have said is simply by way of providing broad guidance in the matter but we think it would be helpful both to ourselves and to the interests concerned if they were to consult generally with the Reserve Bank of Australia as to the calls they envisage making on the market and especially where there is any doubt as to whether the particular arrangements they have in view would be conformable with the Government’s viewpoint.

The United Kingdom has decided in favour of a voluntary scheme which should have advantages of flexibility. To this extent the United Kingdom Government has responded to representations made by the Australian Government. Our need for capital being as great as it is, we deeply regret any action by capital supplying countries to reduce investment in countries like Australia. But we have to be reasonable. The United Kingdom is still carrying great external burdens. We should acknowledge, too, the great contribution which United Kingdom capital has made, and is still making, to the growth of Australia. Again we have, and will continue to have, a major interest in the strength of sterling as a currency and in the stability and progress of the United Kingdom economy as a whole. I present the following paper -

United Kingdom Restraints on Overseas Investment - Ministerial Statement, 4 th May 1966- and move -

That the House take note of the paper.

Debate (on motion by Mr. Crean) adjourned.

page 1434


Report of Public Works Committee


Mr. Speaker, in accordance with the provisions of the Public Works Committee Act 1913-65, I present the report of the Parliamentary Standing Committee on Public Works relating to the following proposed work -

Laboratories for the Commonwealth Scientific and Industrial Research Organisation at Indooroopilly, Queensland.

Mr. Speaker, I seek leave to make a short statement in connection with the report.


– There being no objection, leave is granted.


- Mr. Speaker, the building work in this reference comprises construction of three-storey laboratory wings for the Divisions of Entomology and Animal Health respectively of the Commonwealth Scientific and Industrial Research Organisation and a connecting two storey block housing common administrative and other services. The main research work to be carried out in these buildings will be on the problems associated with the control of cattle tick and tick fevers and on which both Divisions have been collaborating for some years. The Committee has recommended the construction of the proposed works at the estimated cost of $1,150,000. In the course of this investigation, the Committee found that the accommodation which the two Divisions now occupy at Yeerongpilly is badly overcrowded, and is far below the standard required for research purposes. It was therefore established that there is a need for the accommodation now proposed and that the new accommodation is required as a matter of urgency.

I think that the House should know that the Committee was appalled that the accommodation of important research groups such as those now working at Yeerongpilly should be permitted to deteriorate so far below acceptable standards before action is taken to provide suitable quarters. It would be difficult to assess the extent to which research had been adversely affected or inhibited by the poor facilities or the influence that these have had on the ability of the C.S.I.R.O. to recruit or retain properly trained scientific staff. The position will, of course, deteriorate even further before the proposed accommodation is completed which, at the earliest, will be towards the end of 1968. The staff working in these premises is to be commended for its continued tolerance of the extremely poor working conditions.

The state of the accommodation for the work carried out at Yeerongpilly was generally similar to that seen at a number of other Commonwealth establishments inspected by the Committee recently. It seems from these instances that the provision of supplementary or new accommodation is only contemplated when the working con ditions of staff have become critical. This situation calls, I believe, for more realistic planning, including a continuing review of accommodation occupied by Commonwealth establishments, to prevent as far as possible it becoming overcrowded, substandard or inadequate for its purpose.

Ordered to be printed.

page 1435


Assent reported.

page 1435


Bill presented by Mr. McMahon, and read a first time.

Second Reading

Treasurer · Lowe · LP

– I move -

That the Bill be now read a second lime.

When my predecessor introduced the Budget for 1965-66 he estimated that the excess of expenditures over revenues would amount to about $111 million and that net loan proceeds would be more than adequate to cover this amount. It now seems unlikely that this will be the case. Accordingly, the main purpose of this Bill is to obtain authority for such borrowings as might be necessary to meet the resultant deficiency.

Since the Budget was introduced we have entered into a number of additional expenditure commitments. For instance, we have undertaken to provide assistance, estimated at $26 million, to the States for drought measures., we are providing $19.8 million to meet International Monetary Fund drawings in Australian currency by India and New Zealand, we have undertaken to provide emergency food aid to India estimated to cost $8 million, and we have agreed to an increase of $15 million in advances to the States for housing this year. In addition, the li per cent, increase in wages and salaries granted by the Commonwealth Arbitration Commission has been extended to the Commonwealth Public Service and members of the defence forces and wage and salary payments by the Post Office have been affected by other determinations. In short, Commonwealth expenditure is now expected to be substantially greater than was estimated in the Budget.

On the other hand, Commonwealth revenues will probably be less than we had anticipated. As a result, the excess of expenditures over receipts to be met by borrowings seems likely to be significantly greater than the Budget estimate. Despite the fact that net loan proceeds will probably exceed the Budget estimate, current indications are that we will have a cash deficiency this year. However, particularly with the May cash and conversion loan still to be floated and a considerable proportion of total income tax collections still to come in, it is not yet possible to estimate with precision the final Budget outcome for the year. In this Bill, I am therefore seeking authority to borrow an amount which is designed to cover the largest deficit which might occur. I anticipate that the actual deficit will be less - and perhaps a great deal less - than the figure of $150 million which, at this stage, I consider it prudent to seek authority to borrow.

I propose that an amount of up to$1 50 million should be borrowed for defence purposes and the proceeds applied to finance expenditure from the Loan Fund on Defence Services. The amount of expenditure on Defence Services charged to the Consolidated Revenue Fund will, of course, be reduced correspondingly. Provision for charging part of our defence expenditure to the Loan Fund has been made in previous years when net loan proceeds have not been adequate to finance the excess of expenditures over receipts. I commend the Bill to honorable members.

Debate (on motion by Mr. Crean) adjourned.

page 1436


Message from the Governor-General recommending appropriation announced.

Bill presented by Mr. McMahon, and read a first time.

Second Reading

Treasurer · Lowe · LP

.- I move-

That the Bill be now read a second time.

The purpose of this Bill and of the associated Appropriation Bill (No. 4) is to obtain Parliamentary authority for expenditure for which provision was not made in the Appropriation Bills (No. 1 and No. 2) 1965-66.

The total additional appropriations sought in this Bill amount to $67,688,000. The various items included in this Bill can be considered in detail in Committee and I propose at this stage to refer only to some of the major provisions. Further appropriations totalling $7.3 million are required for departmental salaries mainly because of the increases in salary rates arising from the national wage cases. The additional requirement for departmental administrative expenses is $6.6 million. Additional appropriations amounting to $14.4 million for departmentalother services include $8 million for ship construction, which is expected to be offset by a corresponding increase in receipts from the sale of ships, $1.4 million for expenditure under the Aged Persons Homes Act and $1.1 million for maintenance of migrants in hostels and embarkation and passage costs.

An additional amount of $26.3 million is sought in the appropriations of the Service Departments to carry out the current defence programme but as a result of short falls in expenditure under other appropriations mainly in respect of deferred payments the estimated total expenditure on Defence Services for the year is not expected to exceed the Budget provision of $771.8 million. Under Business Undertakings an additional amount of $12 million is sought, including $10.9 million for the Postmaster-General’s Department mainly to cover increases in salaries and wages. Additional appropriations totalling $1.1 million are sought for the Territories, including $790,000 for the Northern Territory and $259,000 for the Australian Capital Territory. The major requirements for the Northern Territory are $285,000 for salaries and $140,000 for drought relief - that is for freight subsidy. I commend the Bill to honorable members.

Debate (on motion by Mr. Crean) adjourned.

page 1436


Message from the Governor-General recommending appropriation announced.

Bill presented by Mr. McMahon, and read a first time.

Second Reading

Treasurer · Lowe · LP

– I move-

That the Bill be now read a second time.

The purpose of this Bill is to obtain Parliamentary authority for additional expenditure in 1965-66 amounting to $14,542,000 on various items relating to capital works and services, payments to or for the States and certain other services. Although additional appropriations of $6 million are sought for capital works and services it is expected that after allowing for savings in other appropriations the total expenditure on capital works and services will not exceed the Budget estimate of $420.6 million by more than about S3 million. The major requirements are $1.4 million for buildings and works in the Northern Territory, $2 million for capital expenditure on telephone and telegraphic services, $470,000 for the purchase of land and a residence in Bonn for the Department of External Affairs, and $640,000 for housing loans in the Australian Capital Territory. The amount of $8.4 million sought for other services includes $8 million for emergency food aid to India. An additional amount of only $137,000 is required for payments to or for the States. I commend the Bill to honorable members.

Debate (on motion by Mr. Crean) adjourned.

page 1437

SUPPLY BILL (No. 1) 1966-67

Message from the Governor-General recommending appropriation for proposed expenditure announced.

Bill presented by Mr. McMahon, and read a first time.

Second Reading

Treasurer · Lowe · LP

.- I move-

That the Bil! be now read a second time.

The purpose of this Bill and the associated Supply Bill (No. 2) is to appropriate moneys to carry on the necessary normal services of the Government during the first five months of the financial year 1966-67. The total amount sought in this Bill is $878,981,000 comprising-

In general these amounts represent approximately five-twelfths of the 1965-66 appropriations and make no provision for new services. However the amount of $376,069,000 for Defence Services makes provision for the continuation of the current defence programme and large contractual payments due in the first five months of the financial year. An amount of $20,000,000 is sought for an advance to the Treasurer to make advances which will be recovered within the financial year, and to make moneys available to meet expenditure on services of the Government, particulars of which will afterwards be submitted to Parliament. I commend the Bill 10 honorable members.

Debate (on motion by Mr. Crean) adjourned.

page 1437

SUPPLY BILL (No. 2) 1966-67

Message from the Governor-General recommending appropriation for proposed expenditure announced.

Bill presented by Mr. McMahon, and read a first time.

Second Reading

Treasurer · Lowe · LP

– I move -

That the Bill be now read a second time.

The purpose of this Bill is to appropriate $203,207,000 for certain expenditures to carry on the necessary services of the Government for the first five months of 1966-67. The total amount sought comprises -

The amount for capital works and services is required in general for the orderly continuation of works programmes. The amount of $20,000,000 sought for an advance to the Treasurer is to make advances which will be recovered within the financial year, and to make moneys available to meet expenditures, particulars of which will afterwards be submitted to Parliament. I commend the Bill to honorable members.

Debate (on motion by Mr. Crean) adjourned.

page 1437


In Committee.

Consideration resumed from 3rd May (vide page 1422).

Tenth Schedule.

Tariff Amendment 4.


.- Before Sep:ember 1964 the duty on replacement engines and parts was 27i per cent. British preferential and 45 per cent, most favoured nation. Then the Government made public a Tariff Board report which recommended reduction of the British preferential duty by 2i per cent, and also recommended a sliding scale reducing duty on engines of more than 60 horsepower and parts for such engines. This caused considerable concern to the parts manufacturers because of the difficulty of deciding which engines, and particularly which parts, came within the category of more than 60 horsepower. So the matter was referred again to the Tariff Board, and the report we are now discussing, which was signed on 30th September 1 965., is the result. In this report the Board recommended that reducing duties on the engines of more than 60 horsepower be abolished and that all engines and parts, of whatever horsepower, be treated the same. However, the Board recommended reduction of the most favoured nation duty rate from 42£ per cent, to 35 per cent, and in the course of its report it had some very tough things to say.

The Board pointed out that most of the parts manufacturers were doing very well indeed. The biggest of these is, of course, the Repco organisation, which made 25.12 per cent, on paid-up capital last year, or 12.2 per cent, on shareholders’ funds. G.U.D. Industries Ltd., which also makes components, increased its earning rate on paid-up capital from 41.7 per cent, to 55.9 per cent. It is worth noting that in the last five years the earning rate on ordinary capital for this company has not dropped below 34.8 per cent. Generally one can say that the industry is not exactly withering on the vine.

Then the Board went on to discuss the activities of the Wholesale Automotive Supplies and Parts Association, the organisation which controls most of the outlets for replacement engine parts. I discussed the activities of this Association in a speech in this House on 1st April last year, and I will not go over it all again. But there is no doubt that the activities of W.A.S.P.A. make it possible for quite extraordinary prices to be extorted from the man whose car has broken down. The Tariff Board has given a table setting out the steps by which two parts, each costing 100 units to make, increased in price by the time they reached the retailer, in the first case to 371 units and in the second case to 689 units. This table appears on page eight of the Tariff Board’s report. With the permission of the Committee, I will have it incorporated in “ Hansard “.


In a situation such as this, with the manufacturer and wholesaler playing the game so lough, it is absolutely essential that at least a dribble of imports be allowed in. So I was very glad to see that the Tariff Board recommended a reduction of the most favoured nation rate from 42-1 per cent, to 35 per cent., and that the Government followed the recommendation. Indeed I would have thought that a reduction to about 25 per cent, would not have been out of place.

While we are on this subject of industries such as these receiving protection I think we should have a look at the Tariff Board Act and realise that the Minister and the Government have power to take action which I am afraid they do not take. Section 15 (1.) (h) of that Act says-

The Minister shall refer to the Board for inquiry and report the following matters: -

any question whether a manufacturer is taking undue advantage of the protection afforded him by the Tariff or by the restriction of the importation of any goods, and in particular in regard to his -

charging unnecessarily high prices for his goods; or

acting in restraint of trade to tha detriment of the public; or

acting in a manner which results in unnecessarily high prices being charged to the consumer for his goods, and shall not take any action in respect of any of those matters until he has received the report of the Board. 1 dealt yesterday with another matter that seemed to come within this provision. I think the activities of the manufacturers of these parts are clearly covered by the provision I have read to the Committee. There seems to be no doubt at all that W.A.S.P.A. restricts the retail outlets through which these motor vehicle parts can be sold, and I think there is a clear case for the Minister to use the powers conferred upon him under the Tariff Board Act to ensure that industries that are being given generous help by way of tariff protection do not take advantage of the situation, as they appear to have done in this instance.

Dr J F Cairns:

.- The remarks of the honorable member for Wakefield (Mr. Kelly) again illustrate a general principle underlying the imposition of tariff duties in this country, to which we on this side of the House have referred in recent weeks. We have pointed out that it must be made clear sooner or later to Australian industries that they cannot expect the Tariff Board to recommend a degree of protection irrespective of the rate of profit and the amount of profit earned and the conditions of production in those industries. If the figures given by the honorable member for Wakefield are correct-

Mr Kelly:

– They are in the Tariff Board report.

Dr J F Cairns:

– As the honorable member says, the figures showing profits are in the Tariff Board report, and it would seem clear that the rates of profit and the amounts of profit in the industries producing replacement engines and parts are in fact excessive. The table that he has just incorporated in “ Hansard “ shows a relationship between total cost of production and retail selling price which, I think, is not very much disproportionate from that in other sections of industry. I believe that this raises a problem rather more complex than simply that of the relationship between the producer - the man who owns and works in the factory - and the tariff.

The astonishing thing about the goods dealt with in this table - this is true also of so much else that is produced and distributed in Australia - is the large proportion of the retail price that is taken by the wholesaler and the retailer. I imagine that for Australian industry in general the Striking thing is the small proportion of the retail price ,hat represents factory cost of production, not factory profit. If one looks at the table just incorporated in “ Hansard “, one finds that the selling price of part A out of the factory is 122 - this is an index figure - but the retail price is 371. For part B, the selling price out of the factory is 245 and the retail price is 689. It seems astonishing to me that much less than half, and in some instances only about one-third, of the retail price - and no more than that - represents factory cost.

Mr Kelly:

– In this instance, of course, the wholesaler is the same person as the manufacturer.

Dr J F Cairns:

– That is so, but it makes little difference. I am sure that if a man follows standard wholesale and retail practice his margins, both wholesale and retail, will be similar to wholesale and retail margins generally. I believe that one of the things at which the Tariff Board must look more closely sooner or later is the wide margin between factory cost and retail price. After all, what goes on in the factory seems to have been the main concern of the Board over the years. Sooner or later, somebody must look at what goes on in wholesaling and retailing in this country. In a sense, the wholesaler represents a bottleneck. He has a distinct advantage because of the position that he occupies. This position gives him a distinct advantage in fixing margins. Retailing in Australia has become generally a large operation, but this does not seem to have had a significant effect in respect of a number of important commodities. It does not seem significantly to have reduced the retail margin in the items under review here. The retail margin on part A in the table incorporated in “ Hansard “ by the honorable member for Wakefield is 115, compared to a wholesale margin of 104. The situation is the other way round with part B, in respect of which the wholesale margin is 214 and the retail margin 153. In view of the large scale of operations that we find in retailing, it is a wonder that competition, added to the large scale of operations, has not reduced margins more.

To begin with, of course, this is an argument in favour of increasing the volume of imports so as to promote competition in these fields. If we look at the number of men and women actually employed in the production of some of the commodities which seem to be sold at excessively high prices and on which profits seem to be excessively high, the argument in respect of employment does not seem to be a very strong one to set off against the need to do something to reduce profit margins. The Committee of Economic Inquiry, or Vernon Committee, substantially refused to accept that argument. However, in existing circumstances, having in office a government that is essentially laissez-faire, not much can be done except to open the ports a bit wider by reducing tariffs so as to increase the inflow of competing goods. We would hope - and to some extent our hopes would be realised - that the resulting competition would reduce retail prices. But it may well be that this laissez-faire method is not the best one.

I believe that sooner or later, somewhere in the economy, we shall have to develop some kind of economic institution that will look closely at the manner in which prices are determined. Whether such an institution would be the Tariff Board or whether it would be developed out of the arbitration system, 1 do not forecast at the moment. However, one can expect that before long the arbitration system will have to do something to protect ils own awards, since it is economically irrational to award a wage and then stand by and watch that wage eroded by increased prices that occur to a degree because of that increased wage, though not alone because of it. If the economy really becomes modern and we do not just continue to live in the twilight of nineteenth century or Keynesian laissezfaire, we may be able to achieve a situation in which employment, if skilful and efficient, will be protected without excessive prices being charged. I do not believe that there is always a correlation between inefficient employment - lack of skills and inefficient organisation - and high prices. I think that in some instances we shall have both efficiency and high prices.

Perhaps the best way to take care of the situation is to produce at prices that are better from the community’s point of view without unduly upsetting an industry. Yesterday, I saw a Tariff Board report that recommended a change that seems likely to upset an industry in which 2,540 persons are employed. This seems to me to oe a rather outmoded way of doing what is required. Perhaps there is a better way of doing it by having a public authority join more closely with the enterprise concerned in planning its own future, each party having a sense of responsibility with respect to rates of profit and prices. In the broad sense, there is not a conflict of interest here. There is a unity of interest. I imagine that sooner or later in the development of our economic institutions we shall see expression given to that unity of interest. In present circumstances, however, it seems to me that in respect of replacement engines and parts for motor vehicles there is need for greater competition. Perhaps increased competition is the only means by which profits that are apparenly excessive can be effectively reduced.

Minister for Air · Fawkner · LP

Mr. Chairman, the honorable member for Yarra (Dr. J. F. Cairns) has raised a number of points which take us rather wide of the matter under discussion and which perhaps would be more properly dealt with in a second reading debate than at this stage. The honorable member has raised the question of whether an increased flow of imports would have any effect. The honorable member for Wakefield (Mr. Kelly) referred to the margins of wholesalers and retailers. We should remember, first, that the proposal is for a reduction in protection. Prior to 1964 the general rate of duty was 45 per cent. That rate was reduced to 421 per cent. Now, following upon a recommendation of the Tariff Board, it is proposed to reduce the rate to 35 per cent, so as to bring these duties into line with those applying to engines and parts imported for original equipment.

Dealing with the matter of margins, I should point out that these are not brought about solely by the Tariff Board’s recommendations. Nor would increased imports make all that much difference because the mark-up on imported components is as high as it is on locally made parts. So there would be no reduction in margins simply because imports were increased.

Mr Kelly:

– Because the W.A.S.P.A. organisation would sell them as well.


– Yes.

Dr J F Cairns:

– I did not say that. I said that in the present circumstances t« increase imports was the only way of dealing with the problem because the Government would not interfere with the margins of wholesalers and retailers.


– Do not forget that a spare part is imported for a particular engine. You would not make overseas a spare part for a Holden.It is more likely to be made here. I know that margins are high. We have the same situation in the aircraft industry. When ordering aircraft for the Royal Australian Air Force we have to pay high prices for our spare parts. We know that we must buy our spare parts while the model is in production because their cost will be even greater after the model has gone out of production, due to the necessity to retool. Generally, wholesalers must be prepared to carry large stocks over a long period. You might expect the margin of wholesalers in this industry to be a bit higher than it is in, say, the grocery trade, where stock turns over rather quickly.

In certain facets of retail industry in Australia, margins have come down. Margins in the grocery trade, where there is a more regular turnover of stock, have come down. The Tariff Board had in mind this matter of industries the stock in which moved slowly. What I would emphasise is that the Board will review the industry in five years.It has given notice to the industry that it will make then a broader and more critical examination of distribution practices. It will be some time before this is done, but at least the process has started, judging from the remarks of the honorable member for Wakefield. 1 should make it clear to the honorable member for Yarra that these practices are not entirely a matter for the Tariff Board or the arbitration system. It would seem that the recently introduced restrictive trade practices legislation would be the proper vehicle, having regard to this Government’s attitude, for conducting examinations. Believing, as we do, in free and competitive enterprise, it seems to me that this matter could best be dealt with under the restricive trade practices legislation and not by a general economic directive that might be issued by the Opposition if it ever became the Government.

Dr J F Cairns:

– Unfortunately, matters such as the one now under examination often lead to ideological divisions. This is a practical problem which one side of the Parliament approaches from a different angle to that of the other side. We on this side of the chamber approach this matter with an eye to the interests of the workers in the industry and the community. In my earlier submissions I did not suggest that increased imports would automatically reduce margins in this trade. Far from it, because we know that if the importing company is not closely related to the company handling the product, at least imports often go through the same distributor in Australia. An advantage is gained only if the imported cost of the goods is significantly lower than the factory cost of the product with which they are competing in Australia. Even then we cannot be sure that the goods will be sold at a lower retail price. The forces of the market by no means operate simply.

What I. suggested was that the only means at the disposal of a government of the kind we have in attempting to achieve a reduction in effective margins are two. The first is increased competition in some form - in this case with imports. The second is the use of restrictive trade practices legislation of some kind. The least said about the second means the better, because we have been waiting for this kind of thing since 1958 or 1959. Legislation has been passed through this Parliament but, as far as I know, nothing has been done to implement it. It is meeting with opposition, particularly from Liberal Party Governments in the States. I do not know that the use of restrictive trade practices legislation is feasible. The only avenue open to the Government is increased competition. But increased competition does not work, otherwise we would not have in this industry the excessive profit margins which the Tariff Board has reported. I am sure that sooner or later we will have to stop throwing up our hands and saying that there is nothing we can do about the situation other than rely on the forces of the market. We have a Tariff Board which is not part of the forces of the market. It is an interference. It gives protection. I have tried to point out on other occasions that it is not enough simply to go on giving protection without doing more than the Board does to see how that protection is in fact used by the people to whom it is given. That is the point I make.

It is a general point that applies to everything we consider before committees of this kind but it is certainly a general point that applies very specifically to the products under consideration at this stage.

Tariff Amendment agreed to.

Tariff Amendments 5 to 9 - by leave - taken together, and agreed to.

Tariff Amendment 10.


.- This Amendment refers to motor cars and motor car components. This is the most difficult case technically that I have ever examined. I have paid a great deal of attention to it. I have prepared a speech that may take longer to deliver than the allotted 15 minutes. I have the right to a second period of 15 minutes. I would appreciate it if I could make my speech without interruption, notwithstanding that it may take longer than 15 minutes. I seek the indulgence of the Committee to take both my speaking periods now.

The CHAIRMAN (Mr Lucock:

Order! There being no objection the honorable member may adopt that course.


– I must apologise in advance for the technicality of this examination, but it is, as I say, a most difficult examination. Before May 1964, there was a tariff of 35 per cent, for most favoured nations on cars that were imported into Australia already assembled. There was also a duty of 35 per cent, for most favoured nations on most of the components that went into a car. However, a standing by-law allowed many of these parts to come in at low rates of duty, although the number of parts coming in in this way had been reduced from time to time over the years. The ability to import some of these components at low rates of duty was necessary early in the car industry’s existence as the volume of cars produced was not large enough to enable high volume, and so cheap, production of car components. To protect the assembly of cars in Australia and to enable the assemblers to buy the higher priced Australian components, the duty of 35 per cent, for most favoured nations was placed on built up cars.

In May 1964, the Government announced plans to encourage the incorporation of more Australian components into Australian cars. The Government was influenced in this decision by the large volume of car components that was being imported, and so using up foreign exchange. For instance, in 1964-65, imports of components under by-law amounted to $152 million. The Government was also being pushed by the makers of the components. Although operating very profitably, they were concerned that they were not expanding as quickly as the assembly side of the industry was and they felt that there was a danger of the industry becoming an assembly industry rather than a manufacturing industry. The Government announced its plans in May 1964. There were three plans - plan “A”, plan “Bl” and plan “ B2 “. Plan “ A “ provided that an assembler of a car who planned to use 95 per cent, of Australian components in his car in five years time could in the meantime continue to import a decreasing quantity of his components under by-law. For the smaller manufacturer whose volume of production was too small for him to be able to buy the Australian components cheaply, plans “Bl “ and “B2” were announced. I will not go into these latter plans in detail, as they have now been superseded.

At the same time as this announcement was made, the Minister referred the matter to the Tariff Board, but with terms of reference that were quite different from those usually used, making it quite clear that it was the Government’s policy - I quote from the terms of reference - “ to ensure sustained development of our economic and efficient automotive industry with maximum Australian content “. At the same time, the Minister also made it clear that, although plans “ Bl “ and “ B2 “ may be altered following the Board’s report, those manufacturers who entered cars under plan “ A “ were guaranteed that they would not be disadvantaged even if the Board recommended less favorable treatment. Here we have a radical departure from the recognised principle that tariff protection should be granted only after a Tariff Board report. In this case, the Department of Trade and Industry evolved plan “ A “ and has stuck to it even though the Tariff Board obviously does not agree with its operation. It is true that the Department consulted the car manufacturers and it is also true that many of them came to the party. But there is no doubt that they did so reluctantly. This was made clear in a Press statement made by Mr. W. Daunt of the Federal Chamber of Automotive Industries in February 1965. In his statement, Mr. Daunt said -

It was reported in the Press after the last series of consultations between the industry and the Departments that the industry had “ agreed “ to the Departmental proposals. This is quite inaccurate, however, as the vehicle production section of the industry would naturally like nothing better than for the present status quo to be maintained. Experience has shown that under the existing arrangements the industry has been progressing along sound economic lines.

So the car assembly and building section certainly did not agree with the Government’s plan.

The plain truth is that the manufacturers just had to come to the party, as the Government held the whip hand with its power to withhold by-law entry. But I submit that it is a dangerous procedure for Government officials to be given the power to say what form protection should take, as certainly happened in this case. They are not experts in making cars. Nor, for that matter, is the Tariff Board. But at least the Tariff Board does take expert public evidence on oath and this can be argued in public. What goes on behind the doors of the Department of Trade and Industry, no-one knows. Certainly I, as a member of the Parliament, do not know. I repeat that it is a dangerous departure from past principles to have Government officials awarding protection, and I am surprised that it has been accepted so tamely. We have had many recent references to the Tariff Board which have had the policy written into the terms of reference. Examples are the chemical inquiry and the aluminium inquiry. But, in this case, not only was the policy written into the reference but the method of protection was arranged by the Department before the reference was made. This is wrong indeed.

With the component section, the Government asked the Board whether the standing by-law should be continued and, if it was to be continued, the Board was asked to say under what conditions bylaw entry should be granted. Unfortunately, the Board was not asked whether the rates of duty on the components should be altered. In its report, the Board recommended the continuation of the by-law and drew up a table in which the allowable by-law imports would vary and decrease with the volume of production. The table of variation is given at page 16 of the Board’s report. With the concurrence of the Committee, I will incorporate it in “ Hansard “.

I will not give all the figures in detail, but honorable members will see that the essence of the scheme was that 55 per cent, of the components in a model of a car with a volume of production up to 2,500 could be imported under by-law. In the next’ classification - that is, 2,501 and 5,000 cars - the manufacturer would be entitled to bring in only 50 per cent, of components under by-law. Between 10,000 and 20,000 cars, the permitted by-law entry would fall to 30 per cent, and when the volume reached 40,000 the permitted by-law entry would be only 5 per cent.

It is difficult to see at first glance the difference between this general recommendation of the Board and the original plan introduced by the Government. I will try to point out the significant difference later. For the present, I ask the Committee to accept my assurance that the protection recommended by the Board was lower than that which resulted from the action taken by the Government following the Board’s report. The reasons given by the Board for not following the Government’s original plan were these: The Board felt that the Government’s plans placed too much emphasis on the time programme rather than on a volume programme. The Board was told that a manufacturer would need to be making at least 30,000 of one model before he had enough volume to expect economical quotes from component manufacturers of many parts, particularly engines. Judging by the report, the Board thought that this figure of 30,000 cars was conservative. It thought it would be better for all concerned to make the measure one of volume production rather than of the time for compliance with say, plan “A”. At page 16 of its report, the Board said -

The Board considers that the sustained development of an economic and efficient automotive industry consistent wilh maximum Australian content is most likely to proceed from manufacturing programmes that are based on volume of production rather than a period of time.

After all, it is the volume of cars made that is important. A model may be entered under plan “ A “ and not reach its planned output, perhaps because the model proved unpopular. Under a plan “ A “ programme, it would have to take the consequences. Under a volume programme, its ability to get by-law concession would vary with volume, as indeed it should.

The second reason why the Board did not follow the Government’s plan was that it was doubtful whether the component manufacturers could make all the parts anyway. The component industry was running at full bore, was short of men and had been expanding very fast indeed without extra protection. In fact, the production of components had doubled in six years. The component manufacturers, as I pointed out in a recent speech, had also been doing very well indeed.

The third reason why the Board did not follow the Government’s plan was that it was concerned with the overwhelming predominance of overseas ownership of the car manufacturing industry. It pointed out that of the $460 million invested in car manufacturing in Australia only $20 million, or 4.35 per cent., was Australian owned. The Board thought that the only chance for an Australian, or joint Australian-Japanese company, for instance, to get a start in the Australian manufacturing scene was the ability to get access to a reasonable proportion of imported components under by-law. If this were denied then the Australian industry must inevitably be left to the big five - General MotorsHolden’s Pty. Ltd., the Ford Company of Australia Ltd., Chrysler Australia Ltd., British Motor Corporation (Aust.) Pty. Ltd., and the Volkswagen organisation, which arc all totally overseas owned.

Because the Board felt that adoption of its recommendations would not greatly increase the cost of production of cars in

Australia it did not feel it necessary to increase the duty on built up cars. Imported built up cars were not making much of a dent in the Australian market. In 1964 they made up only 5 per cent, of the cars registered, but the proportion was rising and the Board thought that the position should be watched carefully and that if the proportion of imported cars rose to an average of more than 7i per cent, the duty should rise from 35 per cent, to 45 per cent, and stay there. But the Board’s report, which was signed on 24th September 1965, said that importers should be given a period of grace until July of this year in order to take action, if they wished, to steady down the flow of imported cars. I will deal with the significance of these dates later.

Another reason given by the Board for its unwillingness to increase the duty on built up cars was that Australian manufacturers charge the purchaser of a car, say in Townsville, Darwin or some similar outlying area, for the cost of getting the car there. For example the cost of getting a Holden from Adelaide to Darwin is about $165. This is a charge the buyer pays, but the freight charged by the Japanese is the same all round the coast. This means that the Japanese car has a natural advantage in outlying areas. Japanese cars can be landed at Darwin, for example, at the same price as at Melbourne. This has been a considerable advantage to the people living in outlying areas, an advantage which they appreciate and which they would be loath to lose. The Board also felt that the normal criteria adopted by the Board for assessing whether any increased protection should be awarded would not support increased duties on built up cars.


– Order! I point out to the honorable member for Wakefield that his speech is developing into a general discussion when, in the strictest sense, we are discussing a particular schedule. It is a tariff amendment in the schedule which is only covered in chapter 87, note 8. The following components are specified for the purpose of the sub-paragraph, and it is these matters that are under discussion by the Committee at this given moment - storage batteries not suitable for propulsion purposes, bumper bars, glass parts whether framed or unframed for bodies or cabs, sparking plugs, tools and tool kits, tyres and tubes, electrical warning devices capable of giving an audible warning, road wheels of the well base or drop centre rim kind and windscreen wipers. The honorable member for Wakefield has developed a general debate in regard to duties on components. I think the subject matter which the honorable member is presenting to the Committee at this stage is not relevant to the particular matter under discussion.

Mr Kelly:

– I rise to a point of order. First, we have been dealing generally with the Tariff Board report. The duties that have been changed have been changed because of the Tariff Board report. If we cannot debate the Tariff Board report when dealing with these items we just cannot debate it at all. This is one of the most significant reports which has come to the Government in recent years. If the forms of the House forbid discussion of the report that is behind the recommendations that we are discussing. I find that position very difficult to accept.


– With regard to the point of order taken by the honorable member for Wakefield, I point out that, particularly in the Committee stages, there can be no discussion of the Tariff Board report. The Tariff Board report can be referred to during the second reading debate. A certain amount of elasticity has been allowed on occasions during Committee debates for a particular point to be made, but in the general debate in the Committee it is not appropriate to spend the whole of a speech dealing with a Tariff Board report or a matter relating to the whole of the Tariff Board report. This is a particularly restricted section before us and only the matters covered in this particular section can be discussed.

Mr Kelly:

– I would ask for the intervention of the Minister in this matter. If it is ruled that the Tariff Board report that lies behind these recommendations cannot be discussed the only opportunity the House will ever have to discuss these will now slip by.

Mr Howson:

– Dealing with this particular point I can only say that if out of the Tariff Board report there are to come increased duties on some cars - which is another matter raised in the report - then of course there will be a future Bill and at that time the honorable member for Wakefield (Mr. Kelly) will have, to my mind, a full opportunity to debate the issues of the Tariff Board report that have led to the imposition of these duties. The only matter we are dealing with now is the small matter to which the Chair has referred. At the moment, as the Chair has ruled as it has, I cannot see how the honorable member for Wakefield can refer to the broader issues. He could have done so during the second reading debate which has now closed and he will be able to do so when the matter comes up again, which is possible. If afterwards I could have a talk with the Chairman of Committees and the honorable member for Wakefield we might be able to do something about procedure, but I am sure that at present there is no way of dealing with the matter other than in the way which the Chair has ruled.


– The only recommendation in relation to the item is paragraph (5) of the Tariff Board’s recommendations which concerns -

  1. provisions for a reduction in duty on motor vehicles and for the non-supply of parts be discontinued.

That is on page 23 of the report. As I explained previously to the honorable member the debate is very restricted. It is restricted to the matters covered in section 8 of chapter 87.

Mr Kelly:

– I accept, Mr. Chairman, that theoretically right is on your side. The point I want to make is that when we have had a second reading debate in which the forms of the House encourage us to discuss general principles under which tariffs are imposed, discussing individual items at that stage has always led to an untidy kind of debate. Indeed, there has been a lot of criticism from various people during second reading debates when we were doing exactly what you say I can do only in such debates. Here we have a tariff report that is obviously of tremendous importance. The forms of the House seem to preclude me from discussing it at all. I agree that your ruling is strictly within the letter of the law but it certainly makes it very difficult for me to continue.


– May I point out to the honorable member for Wakefield that the report is not before the Committee at this stage. During the Committee stage only clauses of the Bill are being discussed and there is one particular clause before the Committee at a particular time. The remarks are relevant only if they relate to a particular schedule, amendment or clause. As I have said, there has been a certain amount of freedom in regard to discussion of the Tariff Board report to allow a general point to be made occasionally, but in the whole debate time may not be given over to the Tariff Board report.

Dr.J. F. Cairns. - Whilst the matter referred to by the honorable member for Wakefield (Mr. Kelly) was of considerable importance,I could find no way of showing its relevance to the discussion by the Committee of these items. The items concerned are not of a kind that the Japanese motor car producers would be concerned to get into Australia. If the items were to havethe effect on the Australian motor car producers that the honorable member for Wakefield has been discussing, J, on behalf of the Opposition, would want to say something about that effect. However, up to this point the honorable member for Wakefield has said one or two things and, now that he has said them, perhaps I may be permitted in just a few words to state the Opposition’s position in relation to them.


– In reply to the honorable member for Yarra, I am afraid that I would have to rule in exactly the same way. I point out to him that until tha honorable member for Wakefield had mentioned these matters one was not aware of what he was going to say. To that degree, having checked and made sure that his remarks were not relevant, I have given a ruling which now stands.

Mr Howson:

– I am sorry about the honorable member for Wakefield (Mr. Kelly), who, I know, wanted to develop this theme at some stage during the debate. I feel that I should point out to him that, unlike other Tariff Board reports, this is one in which the main recommendations will come into operation only if certain action takes place.It is at that point of time that the honorable member will have a full opportunity to debate the report. This is rather a special case and the Chair has ruled accordingly.

Mr Kelly:

– The main question to be examined was one of by-law. It seemed queer that honorable members apparently are not given an opportunity intelligently to discuss by-laws, which are just as important as the tariff.

Mr Howson:

– This is possibly a question that can be discussed during the second reading debate. The honorable member will recall that both he and the honorable member for Bendigo (Mr. Beaton) talked about some new ways under the Standing Orders in which this theme might be developed. I think this is another example in which, possibly, the forms of the House need to be re-arranged, but certainly at this time 1 do not think we can take that subject any further. I am sorry.

Mr Kelly:

– Then that is three weeks’ work up the spout.

Mr Hayden:

– I am disappointed, as other honorable members apparently are, that we are not to be given the opportunity to discuss the issue of the motor vehicle industry in Australia because there are some things, such as the consideration of apparent advantages and costs, which one must look at as they are involved in the motor car industry. I do not think it is a healthy thing for the Government to launch out on propositions which will result in the further expansion of the manufacture of motor vehicles in Australia when we already have, quite obviously, adequate capacity in this manufacturing sector. This industry is one sector in the overall structure of the economy, and the balance as between this sector and other sectors needs to be considered. Additionally, when we can expect that, probably, motor car sales in Australia will reach a peak of 500,000 to 550,000 in the early 1970’s–


– I point out to the honorable member that 1 have already explained the relevance of the item under discussion and the relationship of the Tariff Board report to the general discussion in regard to the industry and tariffs. I suggest to the honorable member that he confine his remarks to the Tariff Amendment.

Mr Hayden:

– There are specific items involved and they are to receive tariff protection. I refer to bumper bars, batteries and some other items. Surely these things do attract and encourage some sort of general comment when one is referring to the motor car industry and when the tariff protective powers are to be established for these things. After all, these items make up a segment of the motor vehicle manufacturing industry and, if we are to give protection to them to the extent proposed, it is protection for the manufacture of motor vehicles. If we intend to do this, we should look at the broad situation so that we can better focus attention on the narrow scope of a specific item. I ask you to consider this, Mr. Chairman, and to agree that we have to speak generally in order to be able to deal with specific items.


– I have already explained to the honorable member the particular and peculiar relationship of the subject matter under discussion by the Committee. I have already read the chapter and the subjects in note 8 and I have ruled that a general debate in regard to it is out of order.

Tariff Amendment agreed to.

Tariff Amendments 11 and 12 - by leave - taken together.


.- Now we have to run in hopples, I understand, and this will be rather difficult. I want to discuss items 1, 2, 3 or 4 which deal with olive oil and peanut oil.

Mr Howson:

– We have not yet finished the Tenth Schedule.


– We are still considering the Tenth Schedule. We have not begun discussion of the Eleventh Schedule.


– 1 cannot speak on this because of your ruling, Mr. Chairman. I would just like to say that this subject is probably of more concern to me than it is even to you. I repeat that the speech 1 have prepared is the result of at least a month’s solid work and 1 think it is a pity that we cannot discuss it, as I would like, at this stage. I think we should have a careful look at Standing Orders and procedures of the House to see whether we can find some way to allow the matter to be discussed. Obviously, when we get the Tariff Board report, we shall not be able to break up our discussion of it into various little sections. That will be quite impossible because the Tariff Board report will be the basis of the whole discussion. If this method is continued. 1 will have to speak on each item and give a summary of the Tariff Board report as it refers to that item.


– In regard to the comment of the honorable member for Wakefield 1 point out, as I have pointed out previously, that the Tariff Board report is not under discussion by the Committee at this moment. The honorable member has made certain comments in regard to the Standing Orders. That is a matter which is not within my province at this moment. 1 point out again that the matters raised by the honorable member are completely irrelevant because the illustrations and arguments that he has put forward are not under consideration by the Committee at the present stage. That is why he cannot discuss the matters that he has been endeavouring to discuss.

Tariff Amendments agreed to. Eleventh Schedule.


.- I want to deal particularly with that part of the Schedule which relates to peanut oil and olive oil. It is regrettable that the vegetable oil industry seems to be just drifting into the most awful mess. This is certainly not because the industry has been neglected. For instance, there were Tariff Board reports on peanut oil in February 1958, in December 1960, in December 1962, and in September 1965. The Government has now asked for another report immediately. In addition there was a Special Advisory Authority report on the subject in March 1962. Olive oil was reported on by the Tariff Board in 1960 and by the Special Advisory Authority in 1962. There was a full Tariff Board report in 1962, and another Special Advisory Authority report in 1964. In 1965 there was the report we are now discussing. In this instance also, the Government has asked for yet another report. With so many reports, the whole thing must sound somewhat like an artillery barrage.

One general comment is in order with relation to all these reports. The Government did not accept the recommendations of the Tariff Board but took action on its own. Therefore, if the industry is getting into a mess, I hope the Government will not blame the Tariff Board.

Let us look at the peanut section of the industry first. Peanuts are grown mainly in Queensland, chiefly around Kingaroy, in the electorate of the Minister for Primary Industry (Mr. Adermann), who has certainly looked after the industry wilh anxious interest. The demand for edible peanuts is filled first. Only the rejected nuts and the surplus nuts are crushed for oil. The Peanut Marketing Board, which speaks for the growers, did not ask for increased protection for peanuts, but did ask that imports of nuts from New Guinea be watched with care. lt would have been a serious mistake to ask for protection against New Guinea peanuts on the ground of their being produced with cheap labour. I have had a brief look at the industry in New Guinea, and certainly the labour there is not cheap. The growers in the Markham Valley of New Guinea are having a very tough time, and certainly will not be able to increase production. Further, the handling costs involved in getting peanuts from the Markham Valley to Sydney should be sufficient protection. But even if this were not so, then, in my opinion, it would be quite wrong to deny the people in New Guinea the Australian market. There is not much sense in encouraging the New Guinea industry by exhortasion and technical advice and then chopping off its market.

The peanut oil section of the Australian industry has been lavishly assisted in the past. Not only is there a tariff of 4s. a gallon on oil, but the industry has had the advantage of by-law entry of four gallons of imported peanut oil for every gallon of Australian oil used. The cost of this form of hidden subsidy, which is paid by the taxpayers, worked out at $665,600 for the year ended in June 1965. This represented a subsidy of $24 an acre for that year. Therefore, no-one can say that the industry is being neglected. But this generous assistance will not save the industry, because people do not have to use peanut oil. They can use most of the vegetable oils in its place. It now appears fairly, certain hat we will be producing both cottonseed oil and safflower oil much more cheaply than peanut oil, so that probably the only way in which the peanut oil industry could be saved would be by preventing the production of those oils. This, of course, would be both wrong and silly.

While we are on the question of the comparative costs of these oils, it is interesting to note that the Peanut Marketing Board has increased its prices for peanut oil kernels since the report was tabled. Last year, the price for oil kernels into store at Sydney was 10.84 cents per lb. At this price, peanut oil was costing 17s. 7d. a gallon with the by-law subsidy. This year the price of oil kernels has been increased to 11.5 cents per lb., which means that the oil costs the crusher 28s. lid. a gallon. With the by-law subsidy, the cost comes down to 18s. Id.

The present price for safflower oil is 15s. 1 Old., and for cottonseed oil about 15s. If this price differential continues and the other oils are available, it is clear that peanut oil will be unsaleable, as all these oils are substitutable one for the other. It is quite clear that if the by-law provision does not operate, as it will not operate if peanut oil is not imported - and peanut oil will not be imported if there are sufficient other oils available in Australia - the price differential will be quite ridiculous and no peanut oil will be used, with the exception of a little for cooking.

The Peanut Marketing Board has asked for enough protection to enable the industry to expand. The Tariff Board, quite rightly, thought that this would be wrong. It recommended the continuation of the tariff protection of 4s. a gallon but asked that the by-law subsidy be discontinued and replaced by a straight out bounty on kernels crushed for oil. The Government did not accept this. It continued the old method, which, after all, has the advantage of being more difficult to understand, and also gives an unfair advantage to peanut oil. The Government did say, however, that the whole question of protection for the vegetable oil industry should go back to the Board. The inquiry which is now going on will almost certainly find that cottonseed oil, a byproduct of an expanding cotton, industry, and safflower oil, which evidently can be produced more cheaply - indeed I understand the growers hope to be. able to produce at export parity - will easily win the battle with peanut oil. So there are troubles ahead for the Minister for Primary Industry.

But there must be even bigger problems looming. It is possible to justify the restriction of margarine production when the fats and oils used in the manufacture of margarine come from overseas; but when they are produced in Australia, by Australians, it is difficult to justify the restriction. As I say this problem is just around the corner. I think we should be looking at it, as the Dairy Industry Enquiry Committee advised us to do. It will be recalled that this Committee said in its report that if margarine were a wholly Australian product the dairy industry would have no grounds for opposing the lifting of restrictions on the production of table margarine. I quote the following extract from the evidence given by Mr. E. G. Roberts, the respected president of the Australian Dairy Farmers Federation -

From a dairy farmer’s point of view the manufacture of a substitute for any dairy product should bc banned unless it is made entirely from Australian primary products produced and manufactured under Australian conditions or recommended on medical advice. . . .

The area under production for safflower has increased from 6,000 acres to over 70,000 acres, and it is expected to go to as much as 140,000 acres this year. The production of cottonseed oil has increased by 600 per cent, in the same three years, and it will increase still further as the acreage under production and the yield of cotton increases. There seems to be no doubt that we will be growing in Australia all the vegetable oil that can be turned into margarine.

We should realise that besides the problem of table margarine cooking margarine is held down by law to a content of 10 per cent, vegetable oil and industrial margarine to 25 per cent. There would be a big increase in the vegetable oil usage if these restrictions were lifted, lt is interesting to study an estimate of this coming year’s production of oil. It is expected that we will have 1,480,000 gallons of peanut oil, including the bylaw entry material which has to be used to prop the market up. We will also have an estimated 1,500,000 gallons of safflower oil and 1,370,000 gallons of cotton seed oil as well as 3,500,000 gallons of coconut oil from New Guinea. This is the position we are faced with and we ought to think about it.

The olive oil section of the industry is in equal trouble. The reason for this is that a lot of labour is involved in olive picking so Spain, which is a cheap labour country, can produce olive oil cheaper than we can produce it. Because of the unprofitable nature of the industry, and because of the old olive growing areas in South Australia being resumed for building purposes, the production of olive oil has tended to fall. We produce only about 3 per cent, of the Australian olive oil requirements and there is no chance of this being increased because if the industry is heavily protected the demand will tend to switch to other vegetable oils. The industry is protected by a duty of 4s. a gallon with the right of bylaw entry for one gallon of imported oil for every gallon of Australian oil used, f have had the opportunity of going to Oliveholme Limited in Victoria, an organisation which is under the anxious electoral care of the honorable member for Mallee (Mr. Turnbull) who often speaks eloquently on its behalf. I had a careful look at this organisation because I was challenged in this House to go and examine it. lt is a subsidiary, of course, of Vegetable Oils Pty. Ltd. I thought that it was very good at its job but it seemed to be up against the basic problem of competition from cheap labour countries. It is interesting to realise that there does not seem to be any reasonable expectation of a mechanical tree shaking system working in Australia. At least the company could not tell me of such a possibility when I visited it last.

The Tariff Board recommended in a previous report a bounty on olive oil rather than tariff protection. I should have thought it obviously unwise to use a tariff when only a small proportion, 3 per cent, of the Australian market, is supplied from local sources. However, the Government again did not follow the Board’s recommendation on this matter. It recommended a tariff and then later the hidden bylaw entry subsidy as applies also to peanut oil. So the whole matter goes back to the Tariff Board for yet another inquiry. As almost all vegetable oils are substitutable in some degree - in many cases to a large degree - it is quite clear that a careful look at the whole industry is absolutely necessary; so I commend the Government for referring the whole vexed question to the Tariff Board.

My chief plea is that we take an anxious interest in the troubles that are looming for the Minister regarding the problem of margarine. If Marrickville Margarine Pty. Ltd. wins its case in the Privy Council the problem of margarine will be dumped on our plate in March or April, because the restrictions will not be effective then. When we realise that the justification that the dairying industry had for seeking protection against margarine will disappear, because table margarine can be made wholly from Australian produced or New Guinea produced vegetable oil and will probably sell for 4s. a lb. and be almost indistinguishable in flavour and taste from butter, we can realise that there will be need for some thinking on the matter. I am not saying anything else but this: I hope the Government and the industry are thinking deeply about the challenge that will face us with startling suddenness and that it is receiving the earnest attention of the Government.


.- Matters affecting peanuts are not taken lightly, particularly in Queensland. The peanut crop is increasing, particularly in the area mentioned by the honorable member for Wakefield (Mr. Kelly), represented by the Minister for Primary Industry (Mr. Adermann). The growers have been subject to much concern by the importation of peanuts which has threatened their industry. The peanut industry here does present a threat to other primary industries, particularly the dairying industry, but some thought should be given to the wishes of the people. We find from the report submitted to us that the area under peanut production in Queensland has fluctuated in recent times from 46,762 acres in 1954 to 42,390 acres in 1964. However, there has been a spurt in the last year and the Board reminds us that in 1965 it is estimated that 52,000 acres were planted. The latest information from the Queensland Department of Primary Industries is that 24,000 tons of peanuts will be harvested in 1966 in Queensland. This is more than double the 1965 crop which is estimated at 10,118 tons, so we can note the increase in peanut production and can realise that it is becoming an important industry. It has brought prosperity to Kingaroy, a town which for a long time depended on the dairying industry for its prosperity. Dairy farmers supplying cream to the Kingaroy dairy butter factory have de creased in number from about 1,000 four years ago to about 300 at present. Strangely, the dairy farmer is moving from the production of butterfat to the growing of peanuts. According to available information a large quantity of the oil obtained from the peanut crop is going into the production of margarine. So while the dairying industry is being hit by the production of margarine it would seem that the dairy farmer is changing to the production of another commodity and is not being affected at all, as he is growing the peanuts that are being used in the commodity that competes with butter.

The peanut industry is certainly a live industry. Great efforts are being made in the merchandising of this excellent product of the Kingaroy district. Some time ago I received a publication which is one of the finest examples of Australian advertising that 1 have seen. It advertises the peanut industry and it shows what has been done to market in Australia the products of the peanut industry. I have received rebuffs on many occasions when I have asked for leave to incorporate publications in “ Hansard “. I would make the request on this occasion but I know that there are difficulties in the way of incorporating this publication in “ Hansard “. This is an excellent publication. I hope that honorable members will take the opportunity to glance at it. By doing so they would be persuaded perhaps to consume more peanuts and to help to solve the problem that is facing the industry. I would be happy to show this publication to any honorable member who is interested, lt reflects great credit on those who have produced it and, as I say, it is a wonderful boost for the peanut industry. Not only does this publication suggest that the manufacturers are pushing the peanut industry in their own interest of selling the nuts for consumption purposes in Australia but also this is an aid to the primary producer who is growing ground nuts, or peanuts as we call them, in such large quantities in the Kingaroy district.

Some concern is caused no doubt to the dairy industry. But the peanut industry is not the only industry that is causing this concern to those associated with dairying. The honorable- member for Wakefield referred to the growing of safflower which is being produced in great quantities on the Darling Downs in Queensland. At the present time, 150,000 acres of safflower are under production on the Darling Downs. Safflower is being produced also by former dairy farmers. It is the ideal constituent of the polyunsaturated oil that is the basis of the best table margarine. So, I feel that we are justified in giving support to the peanut growing industry. It is an important industry in certain areas of Queensland and also in other parts of the Commonwealth, but not to any great extent there. The peanut industry is concentrated in the Kingaroy district in the southern part of Queensland.

Mr Harding:

– What about Atherton?


– Approximately 2,500 tons is produced in Atherton and about 500 tons in central Queensland. But, in the main, peanut production is concentrated in the Kingaroy area.

I know that concern will be expressed by butter producers regarding the increased demand for margarine which is a product of peanut oil and, to a large extent, safflower. But the Australian people have some rights in this matter, too. Their tastes must be catered for. The matter is an important one. 1 do not know a great deal about peanuts other than the fact that they are very pleasant to eat at certain times and that the product of peanut oil and safflower is quite pleasant also. I remember that some years ago the then Minister for Health in the Government of the former Prime Minister, Sir Robert Menzies, published a document in which he said that margarine was as good as butter. That is the position. 1 am very happy to have said a few words, not a great many, on this important peanut industry, and I hope that it will go from strength to strength.


.- In the Mallee electorate there is an olive grove named Oliveholme Ltd. I was very interested to read in the Tariff Board’s report on peanuts, peanut oil and olive oil that the Oliveholme grove produces more than half of Australia’s output of olive oil. In the report to which I wish to refer, the Olive Growers Association of Australia and Oliveholme Ltd. have requested that the assistance accorded the production of olive oil in Australia be increased by 8s. per gallon above the existing duty of 4s. per gallon most favoured nation rate. It was suggested that this assistance could be given in one of the following forms - (i) an increase in duty; (ii) a bounty; or (iii) by-law admission of imported olive oil which allows purchasers of locally produced olive oil to import, duty free, four times their purchases of locally produced olive oil. It was also requested that assistance, irrespective of the form in which it be granted, should be on a continuing basis for a period of at least five years.

Now, the application has been rejected. Some foundation for the validity of such an application being made must exist for the simple fact that on two occasions - 1962 and 1964 - the industry was granted realistic assistance. In the first case, the support was eliminated from a ratio of 4 gallons duty-free imports to 1 gallon produced locally to no duty-free imports. On the second occasion the support was reduced from 3 duty-free gallons to each I gallon produced locally, to 1 duty-free gallon to each I gallon produced locally. This alteration in the temporary realistic protection made it impossible for the industry to develop. Through the Minister for Trade and Industry (Mr. McEwen) and this Government, a case was submitted to the Special Advisory Authority for urgent attention. The Special Advisory Authority granted, until the Tariff Board had the chance of producing its report, a ratio of 4 gallons duty-free import to 1 gallon produced locally. But when the tariff Board’s report was released, this ratio was reduced to no duty-free import.

The Special Advisory Authority was immediately asked to review the matter again. The Special Advisory Authority temporarily increased the ratio to 3 gallons duty-free imports to 1 gallon produced locally. This duty was reduced by the Board to 1 gallon duty-free imports to I gallon produced locally. That is as the situation stands in the recommendation of the Tariff Board that we are discussing now.

  1. have been v. ry anxious that this industry should obtain protection that would allow it to expand. I have sought this for more than one reason. I have stated in the debate previously that as a decentralisation factor this industry should be built up. We would obtain the dual advantage of the benefits of the industry commercially. Secondly, the people growing olives would employ many people to process those olives into olive oil. It is worthy of note that the Tariff Board stated in its report that on its recent visits to olive groves it was seen that some olive groves had suffered in the past from inadequate attention and frequent changes in ownership. I have already referred to the grove operated by Oliveholme Ltd. which produces over 50 per cent, of Australia’s olive oil production. This grove is easily one of the most up to date and best kept olive groves in Australia and probably in the world. Visitors are impressed at the wonderful productivity and scope for production that exists at this grove.
Mr Coutts:

– Where is this?


– - Oliveholme Ltd. is situated on the Murray River about six miles from Robinvale. As Australia produces only 3 per cent, of the olive oil we require, 97 per cent, of our needs has to be imported. The great advantage in the Government giving protection to the olive oil industry is that this would save Australia importing the product. The main country in this regard is Spain which supplies 92 per cent, of our needs. Italy provides the other 5 per cent. For these supplies money is being sent out of Australia. If we could obtain protection so that money could be made available - not by the Government but by the people in the industry - to develop the industry further, there is not the slightest doubt that it would be of great advantage to Australia.

As to the quality of locally produced olive oil, ‘he report stated -

The Board received evidence at its inquiry in 1960 which suggested that the quality of Australian olive oil was generally superior to that of imported oil and that the local product could command a price premium.

I suggest that this applies only to the oil produced at well-equipped groves such as that of Oliveholme Ltd. It would appear that the inquiry of which this report gives details was most unsatisfactory. The report said at page 15 -

The Board . . . had difficulty also in calculating a margin on growing (and processing) costs that would allow a reasonable return on funds, as the information received on these funds was inconclusive.

Under the heading “ Conclusions “ the report stated -

The Australian olive oil industry has not developed in the last few years at the rate expected by the Board in its 1962 report.

There is an obvious answer to this. How could one expect the industry to develop to any material extent when the degree of protection to be granted ultimately is unknown? On each occasion on which the Special Advisory Authority had granted a realistic level of protection the Tariff Board had reduced the protection to an unprofitable level and the industry had lost confidence as a result. Towards the end of the section headed “ Conclusions “ the report, stated -

The Board would have grave doubts about the worth of the industry if it required assistance to the extent of 12s. per gallon. Although the evidence submitted at the present inquiry indicated that 4s. per gallon no longer provides adequate assistance to the industry, this evidence did not prove to the Board’s satisfaction that 12s. per gallon would now be necessary. Such information as was before the Board does nol appear to justify assistance in excess of 8s. per gallon which is equivalent to approximately 35 per cent, ad valorem.

As the Australian olive oil industry produces only about 3 per cent, of the total amount of olive oil consumed in Australia, the cost to consumers of protecting this industry by means of a duty is high in relation to the value of its production. The Board would thus normally recommend that any assistance necessary for the development of this industry be provided by means of a bounty. However, because the Board hopes to review the industry more fully in two years, it considers that the present method of assistance should be continued until the proposed review.

In two years time the Board may give protection along the lines I am suggesting, protection that would allow the industry to develop, but what is going to happen in the meantime? All I am asking is that the Minister consider giving the olive oil industry, until the next review is held, the same protection as is granted the peanut oil industry. If it is given this protection the olive oil industry can and will develop.

Many other things could be said, of course, about what has been happening in the industry. On both occasions when the Special Advisory Authority granted what was considered satisfactory protection - temporarily of course - capital funds were earmarked for development in the event of the Tariff Board confirming the temporary protection. But of course when such confirmation was not forthcoming the funds were not committed. How could anyone commit funds to the expansion and longterm development of the industry in the absence of adequate tariff protection and in the face of competition from unrestricted imports of low cost vegetable oils? In such circumstances, of course, the industry is at a standstill.

I believe the report will be accepted by the Government, Mr. Chairman, but 1 would like the Minister to comment, if he will, on my remarks. I am not advocating the granting of protection to groves that have been neglected, but places like Oliveholme are not in this category. The manager of Oliveholme is Mr. Philip Henry, who will always make welcome any person who wants to visit the property, lt is really a show-place. It has been demonstrated at Oliveholme that if a reasonable level of protection is granted olives for oil processing can be grown in the area economically and prolifically. As more water for irrigation becomes available as a result of the efforts of the Snowy Mountains Authority the industry will be made even more secure. Australia needs to reduce its payments for imported goods and the development of this industry will help it to do so. I believe a great injustice has been done in not granting sufficient protection to attract funds for the greater development of the olive oil industry, particularly for the planting of more trees. It must be remembered that the olive tree takes 10 to 15 years to come into full bearing, and if a company takes on the commercial growing of olive trees it runs a great many risks and should receive very special attention.

It is not my intention this afternoon to play off one oil industry against another, but I do believe that more consideration should be given to the olive oil industry. It appears that there will be a two year lag before a full inquiry takes place. I understand that the Minister has asked for this review and 1 suggest that it should be speeded up. Accurate evidence should be presented to the Tariff Board and the condition of the neglected section of the industry should not be given too much weight when decisions are being made affecting the sections that are not neglected. I believe that ample evidence can be given to the Board to show that olives can be grown prolifically, and I think the Tariff

Board and the Government must give the olive oil industry in Australia the place that it rightfully deserves. I believe this would be in the best interest of us all.

Minister for Air · Fawkner · LP

– The points raised have dealt mainly with vegetable oils. As the honorable member for Wakefield (Mr. Kelly) has told the House, there is now another Tariff Board inquiry proceeding into the whole subject of vegetable oils. As the honorable member has pointed out, the various oils are to a large extent substitutable or interchangeable, and it is therefore better to look at the question as a whole rather than piecemeal.

The honorable member for Mallee (Mr. Turnbull), who I see has already left the chamber, will know that the olive oil growers will have the opportunity of presenting their evidence at this Tariff Board inquiry which is already in progress. I do not think, therefore, that it would be opportune for me to refer in detail to the matters that the honorable member has mentioned. I understand that he saw the Minister for Trade and Industry (Mr. McEwen), together with the people concerned, only recently and that he had a full opportunity of hearing about various aspects of the matter from the Minister, so that he already knows a good deal of the answer.


.- Did the Minister say that he had noticed that I had left the chamber? 1 point out to him that I have been present the whole time.

Mr Howson:

– I did say that the honorable member had left the chamber, but later I noticed that he had merely left his place.


– I wanted to have that clear. I am pleased to know that the olive oil industry will have another chance to submit evidence to the Tariff Board. Is a review of the industry taking place now? At the previous inquiry, it was said -hat it was hoped that there would be another review of the position of the industry in two years. A statement to that effect can be seen in the report that was presented. But somebody has said that an inquiry is now to be made earlier. I should like to know just when it is to take place. Furthermore, I am concerned about what is happening in the meantime. I believe that the Tariff Board should realise that the evidence that it already has is inconclusive and that it should take fresh evidence straight away, because in the meantime the industry is languishing.

Mr Howson:

– The Board already has received reference. So the matter is being taken care of.


– Is that reference to the Board, or to the Special Advisory Authority?

Mr Howson:

– The reference is to the Board.


– That is pleasing to know. If the Board gets on with the job quickly, it will not be necessary for me to press further for assistance in the meantime, unless the inquiry is a long one, as was the case with the last two inquiries by the Tariff Board, which resulted in the disappointing cancellation of the temporary protection. I shall now be able to tell representatives of the olive oil industry at Oliveholme Ltd. that they will now have a chance to put their evidence to the Tariff Board and that we have been assured by a statement in this chamber that the Board’s inquiry will begin almost immediately.

Schedule agreed to.

Remainder of Bill - by leave - taken as a whole, and agreed to.

Bill reported without amendment; report adopted.

Third Reading

Bill (on motion by Mr. Howson) - by leave - read a third time.

page 1454


Second Reading

Consideration resumed from 20th April (vide page 979). on motion by Mr. Howson -

Thai the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

Bill (on motion by Mr. Howson) read a third time.

page 1454


Second Reading

Debate resumed from 28th April (vide page 1314), on motion by Mr. Howson -

That the Bill be now read a second time.

Dr J F Cairns:

.- Mr. Deputy Speaker, this is a very brief measure, the purpose of which is to continue assistance to the producers of vinyl resin for an additional six months. This subject is being considered by the Tariff Board and we understand that a report will be received shortly. The purpose of this Bill is simply to continue assistance at the present rate of bounty until the matter can be dealt with after receipt of the Board’s report. The Opposition does not oppose the measure and I do not intend to delay the House further.

Question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Third Reading

Leave granted for third reading to be moved forthwith.

Bill (on motion by Mr. Howson) read a third time.

page 1454


Second Reading

Debate resumed from 28th April (vide page 1314), on motion by Mr. Howson -

That the Bill be now read a second time.

Dr J F Cairns:

.- Mr. Deputy Speaker, the production of tractors in Australia has been subject since 1939 to a bounty paid by the Commonwealth Government under the terms of the principal Act. The purpose of this measure is to extend the bounty for a maximum of a further six months to 31st December 1966 or such earlier date as may be proclaimed. The tractor industry is being reviewed by the Tariff Board and it is expected that a report will be made well before the end of this year. That report, of course, may affect the future of the bounty. The Opposition has no fault to find with the Bill and does not oppose it. Therefore, I shall not delay the House further.


.- Mr. Deputy Speaker, I want to make only one point in relation to this measure. Substantial pleas for continuation of the bounty in the long term instead of the substitution of a tariff duty have been put before the Tariff Board. I support thoserepresentations vigorously. If there is one thing that affects the welfare of the farming community in Australia it is the availability and cost of tractors. There has been a big increase in the use of tractors on farms throughout Australia in recent years. This has happened of necessity because farmers have been put in a position in which they have had to increase production to meet ever rising costs. The substitution of a tariff duty for the bounty on tractors would be a severe blow to farmers. Let us not forget that the farmers produce a great deal of the export income on which the whole of our economy depends. The National Farmers Union of Australia has submitted to the Tariff Board a case for continuation of the bounty instead of the substitution of a tariff duty. The Union put up some excellent arguments in support of its case. One argument, which I can support from my own knowledge, was that not all Australianmade tractors have the features of some imported tractors. For example, not all Australian-made tractors are equipped with multi-powered transmission, which is a feature of imported tractors and which improves the delivery of horsepower to the implement being used. These factors should be kept in proper perspective and given due weight by the Tariff Board when it considers applying a tariff to imported tractors. It has been estimated that, roughly speaking, the removal of the bounty and the imposition instead of a tariff on imported tractors would cost Australian farmers between £6 million and £7 million. This would be a heavy burden to the farmer, at a time when he is asked to produce more in order to combat rising costs and meet Australia’s need to earn more export income. I am sure that there would be a sharp reaction from the farming community if the bounty were removed and replaced by a tariff.

Question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Third Reading

Leave granted for third reading to be moved forthwith.

Bill (on motion by Mr. Howson) read a third time.

page 1455


Consideration of Report

Minister for National Development · Farrer · LP

. -I move -

That the report of the Standing Orders Committee brought up on 31st March 1966 be adopted, and that the Standing Orders of the House be amended as recommended by that Committee, to come into operation at the next sitting.

The report under consideration records the decisions and recommendations of the Standing Orders Committee at its meeting on 17th March 1966, when it considered proposals submitted by honorable members last year and other matters brought to its attention. This meeting was in conformity with the desire expressed by the House when it adopted the major revision of the Standing Orders in 1963 that the Committee should meet regularly, preferably every year, to review the procedures of the House. The House will recall that further reports from the Committee were brought up later in 1963 and in 1964 and that additional amendments of the Standing Orders were adopted in 1965.

The report which we are considering is in two parts - the report proper and the schedule of proposed amendments. The report proper recommends the adoption of the amendments proposed in the schedule and then recites the decisions reached by the Committee in other matters. The Committee again considered but was again unable to recommend amendments which would prevent the submission of a matter of public importance on Thursday mornings and would relax the financial initiative rule in its application to money bills. Proposals relating to questions touching government policy and questions remaining unanswered on the notice-paper were deferred to a later meeting.

The Committee also discussed the reduction of speech time limits and a proposed requirement that a division may not be proceeded with unless a minimum number of members - four to six was suggested - calls for a division, in which event the members who had called for a division may have their names recorded in the Votes and Proceedings and in “ Hansard “. The Committee decided to defer further consideration of these matters until the views of the parties, to which they have been referred for discussion, are known.

The attention of the Committee was drawn to the large number of Orders of the Day for resumption of debate on motions to take note of ministerial statements appearing on the notice-paper and to the difficulties which could arise from the application of the anticipation rule. As these possible difficulties are not susceptible of solution in the Standing Orders, they were, together with related matters, referred by the Committee for discussion between the Deputy Leader of the Opposition and myself. As honorable members will have noted, the Committee has recommended that, without prejudice to the provisions of the Standing Orders, it would be appropriate for the Chairman of Committees to be known in general terms as “ Chairman of Committees and Deputy Speaker “.

Turning now to the schedule, the House will see that the Committee recommends the amendment of Standing Orders Nos. 16, 18, 19, 86, 90, 193 and 204 and the insertion of a new Standing Order No. 1 l.A. Each of the proposed changes has its accompanying explanation. The suggested amendments, which fall under four headings, do not raise any major matters of principle or procedure. They do, however, together with the proposals dealt with in the report proper io which I referred earlier, reflect the interest which honorable members take in the rules and forms of the House and their desire to see that the Standing Orders are kept under constant review and do not lag behind procedural requirements.

In the first group are the proposed amendments of Standing Orders Nos. 16, 18 and 19. The Committee agreed that the title of “ Temporary Chairman “ is something of a misnomer with an inconclusive connotation and that “ Deputy Chairman “ would be more accurate and more easily understood. To enable this change to be made, it is proposed that the title used in Standing Order No. 16 to describe the member who may be appointed to perform the duties of Chairman of Committees during a continued absence of the Speaker be changed from “ Deputy “ to “ Acting “ Chairman with the result that the title of “ Deputy Chairman “ and “ Deputy Chairmen “ become available to replace “ Temporary Chairman “ and “ Temporary Chairmen “ in Standing Orders Nos. 18 and 19.

The second group consists of the amendments of Standing Orders Nos. 86 and 90, both of which relate to the resumption of a debate in the House, as distinct from the Committee, which has been interrupted by a count-out. The word “ debate “ used in Standing Order No. 90 is not sufficiently comprehensive to cover a situation when a count-out occurs during a division and the Committee recommends that, consistent with the wording in Standing Order No. 286, which deals with a count-out in Committee of the Whole, the word “ debate *’ be replaced by the word “ proceedings “. Similarly, consistent with Standing Order No. 286 is the proposal to omit from Standing Order No. 90 the prohibition of debate on the question for the resumption of proceedings interrupted in the House. The amendment of Standing Order No. 86 is consequential.

The third group, being amendments of Standing Orders Nos. 193 and 204, is the most interesting of the changes proposed. Standing Order No. 193 in its present form declares that a division shall not be proceeded with unless more than one member calls for a division. Standing Order No. 204, which is complementary, provides that on those infrequent occasions on which the House divides and it is found that there is only one member on a side, the Speaker shall, without completing the division, forthwith declare the decision of the House. The amendment of Standing Order No. 193 will enable a member, who cannot on his own force a division, to inform the Speaker that he wishes his dissent to be recorded in the “ Votes and Proceedings “ and in “ Hansard “ and provides that, in such event, his dissent shall be so recorded. The Committee has recommended this change as it was in complete agreement with a submission that a procedure should be provided to meet those occasions when a single member may have strong moral, religious, or conscientious objections to a course acceptable to the majority, such as issues of peace and war, life and death, or those in which strong beliefs are held. A similar provision exists in other legislatures.

The amendment of Standing Order No. 204 has the same purpose.

Under the fourth heading is the proposal to insert a new Standing Order No. 11a to make it clear, in accordance with practice, that the provisions of the Standing Orders apply equally to an Administrator as to a Governor-General - for example, on such occasions as the opening of a Parliament or a session, the transmission of messages, and the giving of Royal Assent to bills. Similar provisions are contained in the Constitution and in the Acts Interpretation Act and there is an analogy in Standing Order No. 1 1 providing for an occasion upon which the Queen in person opens a Parliament or ‘a session.

Mr. Deputy Speaker, I commend the Committee’s recommendations- to the House for adoption. I am sure the House will agree with me that these regular meetings of the Standing Orders Committee are of great value in keeping our procedures under review and that it would be our hope that they will continue.


.- I am a member of the Standing Orders Committee - a very humble member - and I attended most of its meetings. I want to thank the Minister for National Development (Mr. Fairbairn), who is the Leader of the House, for the very clear way he has put before the House tonight the amendments recommended by the Standing Orders Committee. They have been approved by the Australian Labour Party, and, I understand, by the Government parties. They are not far reaching or earth shaking amendments, but they will make the Standing Orders much more democratic. I think that one of the purposes of the Committee is to act as a watchdog on the operations of the Standing Orders in the Parliament and to improve them where possible, change them where desirable, rewrite them where possible and introduce new features if necessary. As the Minister has said, that is what we have tried to do. The Standing Orders Committee is one of the committees of the Parliament that do much good work for the Parliament, irrespective of the political views of the members. We are parliamentarians of the nation. We join together as members of these important committees to assist in the running of the Parliament and to make our Parliament more democratic. The work of the Standing Orders Committee is in this category.

Honorable members may be pleased to know that some very interesting suggestions were put before us by rank and file members of the Parliament, including the honorable member for Mackellar (Mr. Wentworth), who has a very keen mind on these matters. Some of his suggestions were most interesting, though they were not accepted. He may speak on this matter later. I, as a member of the Committee, thank all honorable members, Ministers and others who made contributions designed to improve the Standing Orders. I am sure that the House will agree to the amendments announced by the Leader of the House. It seems to me that, if we do not look at the Standing Orders frequently, we can get into a very bad rut. Mistakes and injustices can be repeated year after year, and that would not be good for anybody. Certainly, it would not contribute to the smooth running of the Parliament. I have been here for almost twenty years and in that time some very dramatic and helpful amendments have been made to our Standing Orders. If I were to go through the Standing Orders now, I would find large sections that were not even thought of 20 years ago. It is good to know that over these years we have improved the machinery for the running of the Parliament. Standing Orders are the guidelines to a parliament or an organisation, no matter how humble it may be. They are the railway lines on which the Parliament runs. From year to year we have tried to straighten the rails and make it possible for this wonderful democratic institution to move freely along the rails.

I am sure that we are all proud of this Parliament. It has been our political home for many years, though not so many years for the newer members, lt is an institution that is the pride of all democratic people. Of course, it is not perfect. But if we look at the dictatorships, we see so called parliaments that are restricted to one party only. It is certainly a pleasure for us to live in a country with a Parliament that embraces the multi-party system. We on this side of the House can get up and verbally tear the Government to pieces without fear that we will be sent to Siberia for doing so.

Mr Beaton:

– There is only one worthwhile party here, though.


– My friend from Bendigo says that we have only one worthwhile party here and I agree with him. We have not had much of a chance for many years to put our policies into operation, but we are looking forward keenly to the day when we can do so. Even so, no matter which party occupies the Treasury bench, the institution of Parliament belongs to us all. The Standing Orders exist for the benefit of all.

Every time we work to improve the running of the Parliament, we should remember the countries that do not have a democratic parliament. This Parliament is elected by the people at the ballot boxes without intimidation and without fear. It is a Parliament elected by people who have a choice of candidates and of parties. These are precious rights. To my way of thinking, we should every day of our lives thank God that we have this type of Parliament.

It is our duty to try to convince other countries that they should adopt the principles of this Parliament. We should try to pass on the democratic nature of this Parliament to other countries that are not fortunate enough to have such a democratic structure. I think of troubled South Vietnam at this moment. The people of South Vietnam will soon be engaged in a general election. We do not know what will emerge from the election, but we hope that this first free election in the country will be the beginning of a new era for that wartorn land. We should try to realise how far behind our system a country like South Vietnam is. J am sure some of the facts I read about South Vietnam the other day would shock honorable members. Vietnam does not even have the vestiges of a parliamentary institution. It does not have the basic structure on which it can start to hold an election. It does not have parties or even leaders of parties. I doubt whether it has electorates or electoral rolls. It has been ruled by dictatorships for many years and that is why political parties do not exist. Those who oppose a dictatorship are disbanded and the leaders imprisoned.

Mr Nixon:

– ls the honorable member speaking of North Vietnam?


– I am speaking of South Vietnam but North Vietnam has exactly the same pattern. When we consider what we are spending in South Vietnam to try to bring a solution to the problems of the country we can realise just how much has to be done to bring to the South East Asia area parliaments such as we have in Australia, which is a model of democracy. The Standing Orders which we are now going to amend will help to make the Parliament more effective, 1 am sure, for all of us who have the privilege of being members of it.

Sitting suspended from 5.56 to 8.0 p.m.


– First, may I endorse the remarks made by the Minister for National Development (Mr. Fairbairn) and by the honorable member for Wilmot (Mr. Duthie) in regard to the desirability of the Standing Orders Committee meeting regularly to review our Standing Orders. I think this is a good practice and one which should commend itself to the House. The Government is to be congratulated on bringing in this practice. I should like to support the amendments which have been moved. They seem to me to be entirely good and alive. I am just wondering whether we go quite far enough in them. There are one or two matters which I should like to mention; they are matters which I have mentioned before in this place. The first is in regard to the length of sittings of this House.

I think honorable members, when they reflect upon it, will agree that we spend much too much of our time travelling. We would get more work done in the House and in our electorates if we did not have as much of a travelling burden as we carry at present. This is very much a burden that we make for ourselves. I suggest to the Government and to the Opposition, because a change like this could not be made without the support both of the Government and of the Opposition, that they should further consider the possibility of the House meeting, shall I say. for a couple of weeks continuously and then getting up for a week so that members could go back and attend to their electoral duties, lt seems to me that if this were done members would have more time for their duties, both in the House and in the electorate, and that a sensible rearrangement of this character would add much to the effectiveness of our parliamentary system.

The second matter that I should like to mention is, again, one which I think would require consideration and should not be brought in without the concurrence of both sides. 1 ask honorable members whether the business of the House would not be better conducted if speeches were, under our Standing Orders, made shorter. Very often a short speech is a more effective one. I am not suggesting for one moment that there should be any curtailment of the rights of members in debate; rather do 1 think of an extension of the rights of members because under our system, where the speeches are longer, fewer members have the opportunity to participate. It is not very often in a second reading debate - 1 do not apply this either to the Minister proposing the motion or to the first speaker on the Opposition side who replies to him - that what has to be said cannot be said in the space of 20 minutes, and perhaps said more effectively in the space of 20 minutes than in the space of 30 minutes. lt does happen every now and again - perhaps at long intervals - that a member may find that there is some subject in which he has a particular interest and on which he would like to speak for longer than 20 minutes. I suggest, therefore, that if we had any amendment of Standing Orders to cut down the length of speeches we should also confer on members, exercisable at their option, a right, once, twice, or perhaps three times in any year, to take an extension as a matter of right. If this were done and if, also, the House would be a little more generous in granting extensions to those who genuinely cannot compress their remarks into the allotted span, we would all profit - the speakers and the listeners, the people in Parliament and those who are taking measure of our words outside Parliament. The Standing Orders Committee has considered and rejected - 1 think rejected wrongly - the possible curtailment of the maximum time of speeches. I ask the Committee to consider this matter again.

There is one other matter, perhaps a small one, which I think we might redress tonight. I refer to the protection of the private members’ day for private members’ business.

Let me say that within recent years there has been an immense improvement in this regard. When the present Liberal Government took office in 1949 it inherited the bad traditions of its Labour precedessor and it curtailed private members’ day quite considerably. Those of us who were in the House in those years know that very seldom was there a private members’ day; it was almost always taken up with government business. There are times, of course, when, naturally, government business must take precedence, but what should have been the exception became, in fact, the rule. This occurred until a couple of years ago. The vital change appears to have taken place at the end of 1964. I have taken out some figures to show what has occurred in the time this Parliament has been sitting. In 1964 there were nine days on which private members’ business should have been called on. Of those, only one day was available - one out of nine. The other days were taken up either with government business or with discussions of so-called matters of urgent importance. lt is not right when honorable members have matters which they want to bring forward, as is their right as members, and have scheduled these on the notice paper, as they do, that any forms of the House should be used to prevent them exercising that undoubted privilege and duty. In 1964, for example, the record, which was similar to that of previous years and had been inherited, let me make it clear, from the old Labour tradition of previous years, was a bad one. I am glad to say that the situation improved after 1964. There did occur in 1965 a very great improvement. I think we should be grateful to the Government and realise that there has been an improvement. In 1965 there were II private members’ days called on and of those 8 were directed to private members’ business. Let me contrast those two years. There were 9 days in 1964, of which 1 was made available, and 11 days in 1965, of which 8 were made available. I think honorable members will agree with me that this was a tremendous improvement.

I go on to 1966, the current year. So far there have been three days on which private members’ business was due to be called on and, on those three days, it has been called on. This, as 1 say, is a great improvement and one which the House should recognise.

Bui in complimenting the about what it has done, I think we should also put into our own Standing Orders a protection for private members in respect of their own business against what could be described as an organised assault by other members on a party basis. I am not suggesting for one moment that there should be no right of honorable members to bring forward a matter of urgent public importance. There is a form of the House under which any eight members can rise and secure a debate. I do not want to curtail that right or abrogate it in any way, but I do suggest that, under our Standing Orders, this should not be allowed to be done at a time when other private members have the right to have brought forward matters of their own which they have submitted in advance. For example, in 1964, the first year of this Parliament, there were two occasions on which private members had their rights taken away from them by these so called motions of urgency.

Let motions of urgency be moved, of course. I am not suggesting that they should not be moved. I am not suggesting anything which would curtail the right of eight members of the Opposition, or eight members of the Government parties for that matter, to have a motion called on for debate, but I do suggest that our Standing Orders are wrong if they permit this to be done on the very few days allotted to private members’ business. After all, those days are limited to every second Thursday - one day in every fortnight when the House is sitting. The average for the year is about ten days. They should be sacrosanct. They should not be interfered with.

This is something that has got to be said on behalf of private members on both the Opposition side and the Government side. If honorable members will look through past notice papers, they will find that private members’ motions come about equally from both sides of the House. This is not a party matter. I therefore suggest that we amend our Standing Order 107, which states -

A member may propose to the Speaker that a definite matter of public importance be submitted to the House for discussion. The member proposing the matter shall present to the Speaker at least one hour before the time fixed for the meeting of the House a written statement of the matter proposed to be discussed; and if the Speaker determines that it is in order, he shall read it to the House.

I want to add these words -

Provided that he shall not do so at a lime which would preclude debate upon general business under Standing Order 104.

Honorable members will see that this in no way reduces their ability to move for the discussion of a definite matter of public importance. If such a discussion is required to be pressed, it could be pressed on the same day, but after the conclusion of private members’ day - which should be kept - or it could be pressed, under the forms of the House as they stand now and as they would stand even if my motion were accepted, on any Tuesday or any Wednesday when the House sits. So, really, the impact of Standing Order 107 is not lessened in any significant degree.

I ask the House to consider this mailer, I propose to move the amendment formally so as to give honorable members an opportunity to express their opinions on it. I say again that I am not for one moment endeavouring to limit in any way the right of any eight honorable members under the Standing Order to bring a matter forward on private members’ day; but 1 do suggest that the Standing Orders should recognise a principle which 1 say this Government has recognised by not bringing on Government business on private members’ days so frequently. The House should recognise it. The House should protect the rights of private members against any incursions by any organised group that wants to stifle discussion of any particular topic. The private member has few enough rights in this House. If he has a topic which he wants to discuss and if he gives notice of it in the normal way, it should not be open to eight members on either side of the House to be able to wantonly stifle discussion of that topic. I therefore move -

That after the words “ that Committee “’ the following words be inserted: “ and by amending Standing Order 107 by adding after ‘ to the House ‘ (second occurring) the words ‘ provided that he shall not do so at a time which would preclude debate upon general business under Standing Order 104’.”.

This is a very limited matter, a very small matter, but it is one which touches the rights of private members, and I do ask honorable members on both sides of the House to support my proposal.


– Is the amendment seconded?

Mr Bosman:

– I second the amendment.


.- As usual, 1 was very interested in the speech delivered by the honorable member for Mackellar (Mr. Wentworth). I must admit that, on the face of it, the amendment which he has proposed seems to be a sensible one. 1 would be interested to hear the opinion of the Minister for National Development (Mr. Fairbairn) on it. I was interested, too, in the suggestion by the honorable member for Mackellar that second reading speeches be limited to 20 minutes. In my view, that is essentially a sound suggestion. I have found that when members have exceeded 20 minutes, they have been inclined to labour a little. The only speeches that I have not found boring to me have been my own. But that is probably a biased way of looking at things.

My main reason for rising is to discuss the forms of the House as they apply to debates on tariff matters. Honorable members will probably hazily remember that under the old system, which I never professed to understand, discussion of the various clauses of bills and of particular duties was conducted in the Committee of Ways and Means. To a man such as yourself, Mr. Speaker, for whom I have great veneration because you can understand the Standing Orders - I am even more respectful because you are a South Australian too - I presume this procedure presents no difficulties, but I must admit that I have never been quite clear as to what the Standing Orders really mean. This certainly is not the fault of the Standing Orders. The fault is that of the honorable member for Wakefield. I must admit, too, that I never understood the working of the old system of Committees of Ways and Means, in which we discussed tariff matters. But I am beginning to understand - I have reason to understand - the operations of the system which we saw in use today. I began to think that the new system was a great improvement on the old because, in the second reading debates, we were able to discuss the general principles behind the various proposed amendments, and when we were in Committee we were expected to devote ourselves to debating particular duties and the Tariff Board reports which lead to their imposition.

However, during the Committee discussions today - here 1 emphasise that I am not canvassing the ruling given - it was ruled - I think correctly theoretically - that we were not in order in discussing the Tariff Board reports which lay behind particular recommendations. This caused me great grief. 1 should point out here that in some cases Tariff Board reports recommend not only increases or decreases in duties but also alterations in by-laws. Recently there has been a Tariff Board report on motor vehicles. Its main object was to discuss the way that by-laws had acted in the past and should be changed for the future. Under the norms of the House we found this afternoon that it was impossible-

Mr SPEAKER (Hon Sir John McLeay:

– Order! I point out to the honorable member that he had better have another look at the Standing Orders because he is out of order in referring to any business that took place during the Commi.tee stage this afternoon.


– Do I understand your ruling is-


– I am giving the honorable member a little guidance.


– I am seeking even more guidance, Mr. Speaker. Do I understand from your ruling that the Standing Orders we are discussing do not cover the proceedings in the Committee of the Whole?


– Order! I was pointing out to the honorable member that he is out of order in discussing anything that took place during the Committee stage this afternoon.


– I accept unreservedly your ruling, Mr. Speaker. May I discuss the question of what may happen in future debates on a similar tariff?


-If the honorable member can relate his remarks to the Standing Orders he will be in order, but this is not another general debate on tariffs.


– I seek your guidance on this complex question, Mr. Speaker. I ask you specifically, Sir: How am I, the House or the Committee to conduct ourselves if we have in hand a Tariff Board report which does not specifically recommend a change in duty but recommends a change in the bylaw procedures? Bylaws are not enacted in this House so we cannot, as 1 see it now, discuss them. We can discuss the laws but not the bylaws. I hope that the Standing Orders Committee will examine whether there are procedures whereby members can discuss Tariff Board reports that specifically refer to changes in bylaws. I again seek your guidance on this problem, Mr. Speaker. Some Tariff Board reports that come before the House recommend specifically that no change of duty take place. When this happens there is no change in the Schedule and there is no opportunity for us to discuss the reports in detail. We have to realise that Tariff Board reports may not be of great interest to many members of the House, but they are of great importance to the industries concerned. One recent report dealing specifically with motor cars was of tremendous interest to the motor car industry itself but it appears that under the forms of the House we are unable to discuss it. I am earnestly urging the Standing Orders Committee to examine ways whereby the House and the Committee of the Whole can be given the opportunity to discuss reports in which no great changes, if any changes, in the Schedules are recommended.

I hope that the Government realises its responsibility in this matter. There is a way whereby we may bc able to proceed: If a Minister, on tabling a Tariff Board report, moves that the report be noted, a debate on it can proceed. Unless that procedure is adopted or unless there is a change in the forms of the House it is obvious that discussion on matters of great importance can be stifled. I urge the Government to examine the situation. I realise that I am in a minority in this House in the interest I take in this matter, but 1 am sure that the Minister for National Development (Mr. Fairbairn) realises that it involves questions of great importance not only to the economy of Australia but to the industries concerned, and for us not to have an opportunity for discussion of a report as important as the one relating to the car industry is a reflection on the Standing Orders or on the procedures of this chamber. I hope that the Government will earnestly examine possibilities whereby it can see that proper consideration of these important questions can take place.

Mr. CREAN (Melbourne Ports) 8.26].I support the motion moved by the Minister for National Development (Mr. Fairbairn). While I can concede that there is some merit in the proposition put forward by the honorable member for Mackellar (Mr. Wentworth) I suggest that it be referred back to the Standing Orders Committee for consideration. He has pointed very rightly to a conflict between two sorts of rights. The provision for discussion of matters of public importance gives a right, as I see it, particularly to the Opposition - and I think it must be used with a certain degree of restraint - to take control, as it were, of the business of the House for the time being, whereas the Standing Order to which the honorable member is referring - Standing Order 104 - deals wilh private members’ rights irrespective of party rights. While there may be some conflict with the rights of the Opposition on a particular day as against the private members’ rights on a particular Thursday, I think it is unfair to ask the House to resolve this question tonight. While we have some sympathy with what the honorable member for Mackellar is suggesting we do not feel disposed to vote on his amendment this evening. I suggest that he ask for a reconvening of the Standing Orders Committee to consider this question. After all, the Standing Orders Committee does comprise, in almost equal numbers, representatives from both sides of the House. We have considered this matter in our Party and we have not seen the sort of conflict that may be implicit in the point the honorable member has raised. 1 do not feci disposed, on behalf of my party, to support his amendment this evening. I think there is some merit in it and I would ask that he consider referring it back to the Standing Orders Committee, asking that Committee to reconvene at an early date to consider his suggestion.

Mr Wentworth:

– If I had leave of the House I would be quite happy to accept the suggestion made by the honorable member for Melbourne Ports.


– Does the honorable member for Mackellar seek leave to withdraw his amendment?

Mr Wentworth:

– I ask that my proposal be referred instead to the Standing Orders Committee.


– You can note it, Mr. Speaker.

Mr Wentworth:

– I could withdraw my amendment on the understanding that it be referred back to the Standing Orders Committee.


– If the House is satisfied, it can be considered by the Standing Orders Committee.

Amendment - by leave - withdrawn.

Question resolved in the affirmative.

page 1463


Second Reading

Debate resumed from 28th April (vide page 1289), on motion by Mr. McEwen - That the Bill be now read a second time.


.- Mr. Speaker, the International Wheat Agreement (Extension) Bill 1966 which is now before the House is a measure to approve the signature and acceptance by Australia of a protocol for the further extension oh the period of operation of the International Wheat Agreement 1962. As this is not a new Agreement, and as the Bill provides merely for an extension of the Agreement introduced into this House in 1962, I think I should curtail my remarks to a reasonably limited period. It is sufficient for me to say in the first instance that, historically, this is a measure that gives me some degree of satisfaction. Seventeen years ago I stood on the other side of this Table and introduced on behalf of the Chifley Administration the first International Wheat Agreement Bill which provided for the operation of that Agreement for a period of four years.

On that occasion, a long debate ensued. The Minister for Trade and Industry (Mr. McEwen) was then leading the debate for the Opposition forces in the Parliament. I think he said then that we were on the road to Socialism. In due course, as governments come and go, T. now occupy the place that the Minister for Trade and Industry then occupied, and he occupies the place that I then occupied at this table. Over the years this Agreement has given general satisfaction to all the participating partners. This was so much so that, when the first Agreement was about to expire in 1953, the Minister for Trade and Industry, as he now is, introduced a measure for another International Wheat Agreement, to run for a further period of three years. In 1956, the Agreement was renewed. It was renewed again in 1959 and 1962. The International Wheat Agreement of 1962 was extended for one year by the passing of a Bill almost identical with the one that we are dealing with tonight to extend the Agreement for another year. So, over that long period of approximately 17 years the International Wheat Agreement apparently has given satisfaction to the various parties concerned.

The International Wheat Agreement Act 1949 provided that five exporting countries would be signatories to the Agreement for the exporters. Those countries were Australia, Canada, France, the United States of America and Uruguay. The importing countries at that stage numbered 37. With the passage of time, certain changes have taken place with respect to the countries which are now continuing signatories to the 1962 Agreement. I find that, instead of five exporting countries being partners to the Agreement in 1962, there were 10 countries. These countries were Australia, Argentina, Canada, France, Italy, Mexico, Spain, Sweden, the Union of Soviet Socialist Republics and the United States. The number of importing countries had diminished from 37 to 31. That is the position that exists today. Basically, the Agreement is an association of these importing and exporting countries providing for a range of prices for the wheat committed under the Agreement. Wheat shall not be sold below a certain figure. A specific quantity of the grain is committed by each exporting country. The purchase of a specific quantity of wheat is also the obligation of each importing country. This arrangement has gone on for 17 years.

From time to time, some importing countries have dropped out of the association. Other countries have become exporters. The whole arrangement is carried out by the International Wheat Council which is engaged in very valuable work. At one stage, the position of Chairman of the International Wheat Council was occupied by Sir Edwin McCarthy who is probably one of the best and most knowledgeable wheat growers that the world has ever known. He was at the time of which I speak and at the present time. I am not sure who the Chairman of the International Wheat Council is now. The machinery was set up and lt has worked satisfactorily. It has not worked perfectly. I do not suppose that any arrangement of this character that human beings devise could be expected to work perfectly. However, I think that overall the International Wheat Agreement has been a good arrangement. The repeated enactment of this legislation to some extent illustrates that point.

I am afraid that I detected, or I thought I detected, as I listened to the second reading speech of the Minister for Trade and Industry on this measure, that he thinks that whilst the Agreement is valuable it is possible that by 1967 this Agreement will be carried out under the General Agreement on Tariffs and Trade when the legislation which provided for the establishment of what is loosely called the Kennedy Round talks expires. For my part, I am rather doubtful that this will happen. The Minister is endeavouring to get a cereals arrangement under the terms of the legislation governing the Kennedy Round talks. The legislation constituting the Kennedy Round talks was enacted by the Kennedy Administration in the United States of America. So far, no real progress has been made. The Minister is optimistic. I hope his optimism is justified. I think that negotiations will probably break down finally and that the nations which are growers of cereals will have to fall back on the protection accorded by the International Wheat Agreement.

I recollected when I listened to the Minister’s second reading speech that in 1962 the Government entrusted a mission comprising my colleagues and myself to go overseas to talk to people interested in the European Common Market. On my return I related in a speech the reasons why I had some grave doubts as to whether the Kennedy Round talks would ever be effective. I happened to pick up a journal called the “ Economist “ which contained a com ment relating to the Trade Extension Act. The “ Economist “ said - . . its supporters have contended that it is a symbolic gesture of Washington’s dedication to free trade and an example for the Common Market to follow. But if European eyes have been fixed on the free-trade provisions within the Bill, they have not been blind to the protectionist actions taken by Mr. Kennedy outside the Bill in order to assure its passage. First there was the American promotion of the international agreement limiting exports of cotton textiles and then Mr. Kennedy’s unilateral increases of tariffs on Belgian carpets and glass (quickly followed by Belgian retaliation against American chemicals). Now, it is believed, Mr. Kennedy has secretly given an ironclad assurance to . . . the multi-millionaire oil and gas tycoon who has managed the trade Bill in the Senate for the Administration, that the quota on imports of oil will be frozen at its present low level for the rest of the Kennedy Administration. Such actions do not point to any rootandbranch scrapping of protection for old and inefficient American industries which are poorly equipped for a world of reduced tariff barriers.

The article in the “ Economist “ continues-

With Britain in the common market, perhaps 80 categories would be eligible (although American negotiators would probably consider complete elimination of tariffs on only a very few of them in the foreseeable future).

I have always felt, after reading that article and another article in the “Wall Street Journal “, that the prophecy of certain people would be proved correct and the Trade Expansion Act of the Kennedy Administration would be shown to be merely a gesture to encourage the United Kingdom and others in the negotiations then proceeding for the admission of the United Kingdom to the European Common Market. I would say that up to the present my predictions have been proved correct. It is a long time since 1962. We are nearing the end of the period covered by the Wheat Agreement, which will fizzle out in 1967. The Minister has expressed his hope, and I trust it will come true, that the proposals of the cereal group will result in even better arrangements for dealing with the problem of world marketing of wheat. However, in the interim we are fastening our faith to some extent on the International Wheat Agreement - not that it has necessarily been all that one could have expected, but at least it has given some protection and, perhaps of equal importance, it has provided facilities for the representatives of wheat growing countries and wheat importing countries to get together in conference from time to time and possibly make verbal arrangements, arrive at common understandings and devise a modus vivendi for ensuring that the world price of wheat does not collapse to the unprofitable levels that it reached in the past.

These are merely some thoughts that flood my mind when 1 hear the Minister pinning his faith very largely on the prospects of an agreement arrived at through the Kennedy Round, the General Agreement on Tariffs and Trade and the Geneva negotiations.

Mr Adermann:

– lt is not only a matter of pinning faith, lt is the alternative. If all the other nations drop this Agreement, we cannot be left out on a limb.


– -If all the other nations drop out of the Kennedy negotiations all that will be left is the International Wheat Agreement, which runs only until 1967. We will then be confronted with the necessity of bringing together the representatives of all the wheat exporting and importing countries and trying to convince them of the wisdom of re-enacting for a further period of years something along lines similar to the 1962 Agreement. The Minister would know more of the facts than I would, but 1 should not think that the existing signatories to the Agreement, certainly not the exporting countries, would want to see the Agreement ditched. Nor would I think that the consumer countries that are parties to the Agreement would want to see it ditched. At least it does, within limits, provide some protection and security for the countries that are at present signatories to it. I hope and believe that they will be prepared to enter into another Agreement in the future - an Agreement providing, of course, as in the past, for variations of the former Agreement to allow for more suitable price ranges and more suitable protection as regards quantities. I notice that between the time of the 1948-49 Agreement and the 1962 period there was a reduction in the quantity of wheat which the United Kingdom agreed to take. I think the reduction was from 177 million bushels in the first Agreement to something substantially lower. I think the quantity now is arrived at on a percentage basis.

I do not propose to say much more about this matter except to express the hope that the House will facilitate the passage of the measure and that the Agreement will continue to act as a protective bulwark for the wheat growers of Australia in the international wheat trade. After all, the Australian wheat industry is an important one. I have before me figures provided in an excellent publication of the Bureau of Agricultural Economics. They indicate the progress of the industry with regard to acreage, annual yields and prices. The acreage is now up to about 17 million acres, lt was down to about nine million acres in 1921 during the era of disastrous prices. I notice that the yield last year was an all time record of 360 million bushels. I also notice that the protection afforded by the Wheat Stabilisation Act has maintained the guaranteed price for wheat for home consumption and for 150 million bushels for export. While the growers say that is the least that they should get, it is a price that they have been glad to take advantage of and which has given very great protection not only to the growers but also to all people of Australia.

The export value of wheat last year - I speak subject to correction - was probably in the vicinity of £140 million. No doubt the honorable member for Mallee (Mr. Turnbull) will set me right if I am a million or two out. This is no small proportion of Australia’s export revenue. Wheat growing is a valuable industry. It provides food for our people. I think we consume domestically, in bread, all sorts of cereal foods, stock feed, seed wheat and so on, about 82 million bushels per annum. I note that the yield increased between 1921 and 1964 by about four bushels an acre. This does not sound much over a period of 40- odd years, but if one takes climatic conditions into consideration one finds that the Australian wheat industry is probably the most efficient wheat industry in the world. It is true that other countries, particularly certain countries in Europe, have yields of up to 36 bushels an acre, but climatic conditions have a good deal to do with this. An increase of four or five bushels an acre with a return to the wheat grower of about 14s. a bushel is a substantial improvement.

I shall leave the matter there. The renewal of the legislation for another year has the blessing of the Opposition. We express our pride in the fact that the Labour Government was the first to conclude an International Wheat Agreement and we are very pleased to see that Australia has remained a signatory to the Agreement and subsequent Agreements.


.- In supporting this Bill for the extension of the International Wheat Agreement for a further year, let me say that I have been most interested in the historical recital by the honorable member for Lalor (Mr. Pollard). I agree that the Agreement could perhaps be better described as an association of exporters and importers than as a firm agreement relating to the disposal or disposition of wheat stocks throughout the world. I cannot agree with his statement that the Minister for Trade and Industry (Mr. McEwen) did not pin his faith on the International Wheat Agreement but rather was inclined to pin his faith on other arrangements. My impression, from reading the Minister’s second reading speech, was that he was taking a very wise precaution in extending this rather loose kind of arrangement for another twelve months in the hope that in the meantime something more precise and of a more specific nature would emerge from the discussions in the General Agreement on Tariffs and Trade wilh regard to international trading in wheat. I believe that this is a very necessary precaution to take and a desirable step in the interests not only of the Australian wheat industry but of the whole of the commercial and domestic life of Australia.

As an Australian wheat grower as well as a member of this House, and especially as one who has been associated with the wheat industry over many years, I have often found occurring in my mind the thought that some more specific arrangements in international trade in wheat were necessary if the future of this industry was to be secured. When one considers that the 1964-65 harvest yielded a marketable crop of almost 350 million bushels, realises that this was obtained in the face of a rather poor year in Western Australia and recognises what is happening in the development of the industry throughout Australia, one must surely come to the conclusion that within a relatively short time the Australian Wheat Board will be faced with a situation in which it must find markets somewhere throughout the world for more than 500 million bushels of wheat annually. There was a time a few years ago, of course, when few suggested that we would ever export almost 300 million bushels of wheat in a year. Any suggestion that we would do so was regarded as a rather airy sort of statement that nobody could take seriously. Yet, in 1964-65, we achieved almost that export figure. The European market for our wheat is inclined to shrink rather than grow. So, when we are considering potential export markets for the Australian wheat crop, we must realise that the best prospects of marketing the increased crop that will result from the development of the wheat industry in Australia lie in Asia. There we must surely find the great outlet for our sales of wheat.

When we are considering the steps that are being taken to extend the International Wheat Agreement and, behind the scenes, to try to develop a more solid and more reliable framework for the control of international trade in wheat, we appreciate the degree of importance that these moves have for the whole Australian economy. Like the honorable member for Lalor, I do not propose to delay the passage of this measure by speaking at great length on this subject. Let me say in conclusion that I welcome the steps being taken to extend the Agreement for a further 12 months. I sincerely hope, Mr. Speaker, that the measures that are being taken in the meantime to place international trade in wheat on a more sound and more solid basis will be successful.

Minister for Primary Industry · Fisher · CP

Mr. Speaker, I appreciate the reception that the House has given this Bill. The honorable member for Lalor (Mr. Pollard) and the honorable member for Moore (Mr. Maisey) have indicated the purpose of this measure. The International Wheat Agreement is to be extended for 12 months pending further negotiations on the question of international contracts for cereals in the Kennedy Round negotiations under the auspices of the General Agreement on Tariffs and Trade. I believe that the honorable member for Lalor did not get the point that I tried to make by interjection when he was addressing the House. I suppose that I was out of order in so doing, but I wanted to make the point that we could be left out on a limb if we did not enter into the Kennedy Round negotiations. If those negotiations were to succeed and we had not taken steps to try to make provision for the sale of our cereals by international agreement, we certainly would be out of the picture.

We all recall Britain’s negotiations in an attempt to enter the European Common Market. For a time, it appeared that there might eventually be an even wider European Economic Community and that we might lose some of our preferences in the United Kingdom market. If this were to happen, we would have to assess the situation afresh. At the time of Britain’s negotiations for entry into the Common Market, the United States of America, not wanting to be completely excluded from the European market, proposed the Kennedy Round negotiations in an effort to achieve freer trade between the United States and Europe. It was at that stage that Australia, in effect, said: “What about the agricultural countries? We could be left out altogether if there were made arrangements under which trade between the United States and Europe were made freer without any protection for agricultural countries trying to sell commodities in the European market.” We in Australia recognised that our best protection would be provided by entering into international contracts for the sale of our products. So a proposal of this kind was then injected into the Kennedy Round negotiations.

Wheat, as a cereal, was probably the best commodity with which to start when trying to make arrangements for international contracts within the wider sphere of operations. If the Kennedy Round negotiations were undertaken without our participating, we could be left out of consideration and the sort of arrangements that we have proposed could be ignored. At present, the negotiations are not looking too hopeful and I do not think that the Minister for Trade and Industry (Mr. McEwen) is optimistic about them. But we have to take part in the negotiations, and the present arrangements for the extension of the International Wheat Agreement are being entered into pending the outcome of the Kennedy Round, so that we shall have the International Wheat Agreement to fall back on. We may be able to renegotiate it if, from our point of view, the Kennedy Round negotiations proved to be a failure.

I just make that explanation in order to clarify the point that I attempted to make by interjection when the honorable member for Lalor was speaking.

Question resolved in the affirmative. Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

Bill (on motion by Mr. Adermann) read a third time.

page 1467


Second Reading

Debate resumed from 28th April (vide page 1313), on motion by Dr. Forbes -

That the Bill be now read a second time.


.- Mr. Speaker, the Minister for Health (Dr. Forbes), in his second reading speech, stated -

The Therapeutic Goods Bill … is designed to ensure safety in the usage of drugs and medicines and therefore can be regarded as a Bill of considerable importance to the Australian people.

The Opposition does not disagree with those words, nor does it disagree with most of the sentiments expressed by the Minister in his speech on this important measure. The Opposition, in common with the Government, recognises its responsibility to contribute to the welfare of the Australian people by co-operating in any efforts to maintain health standards, particularly by ensuring that drugs, medicines and medical equipment consumed and used in Australia meet minimum standards of safety and quality. For these reasons, we do not intend to oppose the measure, though, at both this stage and the Committee stage, we shall make criticisms that we consider to be necessary.

From the Minister’s second reading speech it is apparent that the Bill is not without its complications and that it lends itself probably more to debate in the Committee stages than at the second reading stage. With this in mind I propose at this stage to make a few general observations before dealing with certain aspects of the legislation.

As the Minister has stated, the legislation is not new. The Bill does not represent a change in principle or policy by the Government. The Bill is similar to the present Therapeutic Substances Act, which it repeals. The Therapeutic Substances Bill was first introduced into the Parliament on 12th November 1953 by the then Minister for Health, the late Sir Earle Page. The Act and regulations came into operation in 1956, their purpose being to control standards of therapeutic substances imported into Australia, traded interstate or exported from Australia in accordance with the standards fixed by the “ British Pharmacopoeia “, the “ British Pharmaceutical Codex “ or by regulation. The provisions of the Act and regulations apply also to the standards of therapeutic substances supplied in the form of pharmaceutical benefits and to the Commonwealth Government and its authorities, and in Commonwealth territories.

As the Minister said, this Bill will supersede the existing Act and is said to be an advanced step to ensure that, in line with modern developments, drugs are safe, pure and potent. Naturally, the Opposition does not propose to oppose what is evidently an improvement for the protection of our health standards and the general welfare of the people of this country. Having given that brief background to the legislation, I now propose to make a few general comments on it. I refer particularly to the constitutional position. In his second reading speech the Minister said -

Constitutionally, the Commonwealth’s powers over therapeutic substances and articles are limited. This Parliament can enact legislation in relation to drugs, medicines and articles of medical equipment that are imported, exported, made the subject of interstate trade, supplied to the Commonwealth or supplied as pharmaceutical benefits. Legislation concerned with the local manufacture, intrastate supply and consumption of these items is the responsibility of State Governments.

Similarly, the Commonwealth will not enter into the general control of family remedies, including the bulk of proprietary lines. These will remain a State interest. The Commonwealth will only intervene if a substance becomes a pharmaceutical benefit or if there arises a necessity to provide standards for any particular item or type of substance which is imported or which is sold interstate, to prevent it having a deleterious effect on the public in general. … I emphasise, however, that, within its limited powers, this Government is conscious of the necessity of providing the legislation and the machinery for ensuring that the safeguards to protect the community are adequate.

I emphasise that last sentence. One might well ask: Why is this constitutional power limited at this stage? In view of the Minister’s remarks, particularly those which I have just quoted, the Government cannot escape criticism for its neglect in failing to approach the people by referendum or to reach agreement with the States to obtain full and complete power over health legislation. There is no more important subject over which the Commonwealth Parliament should have legislative power than health or the welfare of the people, yet during the 17 years that it has been in office this Government has not attempted to obtain that power. At a time when it is apparent that there should be no delay in matters affecting the health of the people, having regard to the great advances being made in medical research, the Government is still restricted in its activities because of constitutional difficulties and its refusal to seek the approval of the people for the Commonwealth to have powers in relation to this important subject. The need for the Commonwealth to have powers in this field, amongst others, is apparent from the words of the Minister, who said -

In this century we have seen the number of agents available for therapy multiply from a dozen or so to tens of thousands. In fact there are now 20,000 to 30,000 therapeutic agents available in Australia.

Even on this aspect of health, the Government claims that it has no constitutional power. In view of the Government’s dilatory approach to this matter of constitutional authority to legislate in matters of health I think it is important to cite, for the benefit of the Parliament, the Australian Labour Party’s policy in the matter. The Labour Party believes that the Federal Parliament should have constitutional power to legislate in respect of social services, health and other great reforms which could benefit the people of Australia irrespective of the State in which they live. I will quote the Labour Party’s attitude to what the Minister said is a real limitation on the Commonwealth. The Federal Platform of the Australian Labour Party on health reads -

Believing that health is a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity, and that the enjoyment of the highest attainable standard of health is a fundamental right of every citizen, a Labour Government would promote the establishment of a comprehensive public health service available to all who choose to use it and staffed by those who choose to serve in it.

That policy should be noted by the Government and by everybody in the community. Referring to constitutional power our Platform reads -

A Referendum to give the Commonwealth Parliament the power to make laws with respect to health; or reference by the States to the Commonwealth Parliament of the power to make laws with respect to health.

The Platform provides further -

The Commonwealth to approach the Stales to achieve national drug and food standards.

Further -

The promotion of the manufacture, bulk purchase and wholesale distribution of pharmaceutical products through the Commonwealth Serum Laboratories.

If, during its 17 years in office, the Government had taken the steps that we advocate, the limitations that apply to this subject would not exist. The implementation of Labour’s policy would remove many of the difficulties that now exist between the Commonwealth and the States and not only would provide a more efficient and effective health service for the people but also would prevent, by Commonwealth control, many of the unfortunate occurrences of the past.

Because of its failure to go to the people on this matter, the Government cannot escapethe responsibility for any deficiencies in our health legislation. I am sure that the people would have endorsed any proposal to give the Commonwealth greater powers in this field. If we have to wait another 17 years for the Government to approach the people on this subject I can see no future for a comprehensive health service as envisaged by the Australian Labour Party.

I have already said that the Commonwealth’s lack of constitutional powers means a diversion of control and that this is a weakness in the legislation and in health administration generally. This diversion of control could be avoided if the Government would seek the constitutional powers that are needed. I believe that it has a responsibility to do this. I am quite certain that the people would endorse any proposal to give the Commonwealth the powers that it needs.

I turn now to me matter of basic standards for drugs and medicines, particularly with respect to labelling, packaging and containers. This matter has been a bone of contention for some time. It is highly desirable that the Minister should, under the legislation, have power in this field. The subject of packaging has received a good deal of publicity from time to time, as I will show later. In his speech the Minister quite rightly, gave prominence to this aspect of the legislation. He said -

I referred earlier to the fact that under the Bill items of medical equipment as well as containers in which drugs and medicines are packed will be required to meet minimum requirements of purity, sterility, &c.

There has been a very considerable increase in the utilisation of plastics by the pharmaceutical industry, not only as containers, but also as an integral part of the therapeutic agent.

He went on to say -

The container and tubing must be leakproof and be capable of being sterilised properly, : and must not interact harmfully with its contents. The existing Act–

That is the Act that is being repealed - passed at a time before products had become so refined, does not enable control of these important matters. It is obvious that there is little point in ensuring the purity of drugs and medicines if there is no corresponding control over their containers or the articles used in their administration.

That is a sound statement and it is pleasing to note that the legislation seeks to give effect to it. As the Minister said, there is not much point in insisting on the purity of a drug if the container holding it will destroy its purity.

The design of packages has become part and parcel of the methods of selling goods, not only drugs but also other products. As the design of the package adds to the selling value of certain goods, be they ties, shoes or socks, so the design of the package adds to the selling value of drugs. Many large drug companies are selling drugs to people who are influenced to buy them, to some extent, by the style of packaging that is used. One person who has been closely allied with a campaign to ensure that certain standards are observed in packaging is Professor R. H. Thorp of the University of Sydney. A statement he made was reported in the Press on 26th May 1964. A newspaper article headed “ ‘ Skirmishes near ‘ on packing “ had this to say - “’ Skirmishes “ between consumers and manufacturers over goods packaging were inevitable, Professor R. H. Thorp said yesterday.

Professor Thorp was speaking at a seminar organised by the Australian National Packaging Convention.

He is chairman of the Australian Consumers’ Association, as well as Professor of Pharmacology at Sydney University.

Professor Thorp said the market had changed so much in recent years the consumer often could not judge the quantity he was buying or what it would do in actual use.

The consumer appreciated informative packaging.

He required a strong and durable packet, correctly sized for the goods it contained.

The packet should state clearly and in simple terms the quantity and quality of the goods in the packet.

The article also said -

Professor Thorp said instances of faulty packing included:

A toothpaste container which said it contained “Guardol’. lie said: “ I ask the manufacturer whether guardol is, in fact, a chemical entity. “ ls it an official name and, if so, what is the substance? “

Professor Thorp has dealt with the toothpaste which was said to contain a drug or chemical product. Evidently the package was misleading to many. A year or two ago, a committee was set up in Victoria to inquire into packaging. It produced a document running into several hundred pages which gave examples of the false impression that can be created by the packaging of articles. This included drugs and other items. Over the years, numerous articles have been written about deceptive packaging. A journal I obtained from the Library contains an article headed “ Deceptive Packaging. The ‘ Silent Salesman ‘ Before the Magistrate.” Deceptive packaging can help to sell drugs just as it can help to sell clothing and other items. I do not want to refer to any more of the articles about deceptive packaging that I have here. The Minister knows about them and no doubt his Department has checked them. One article is headed “ Trade Law Fraud Change Needed “.

There is a real need for the legislation now before us to provide controls over packaging and I am pleased to see that the

Minister has included provisions in the Bill that will help to prevent the exploitation of people who buy drugs and other articles, especially by packaging that may be misleading. Quite apart from the fact that the packet may interfere with the purity of the drug, it sometimes happens that the packet does not contain the quantity of drugs that it says it does.

I have referred to the favorable aspects of the Bill. The Minister, in his second reading speech, gave a rather extensive outline of the legislation. I do not want to reiterate all that he said, but I want to place some of his remarks on record. 1 believe it is necessary, in view of the importance of the legislation, to say a few words about it. I have already dealt with the repeal of the Therapeutic Substances Act of 1953. I mentioned that there has been no change in principle or in the policy of the Government. We are, of course, pleased to see that this is so. We note that the Bill contains provisions that will prevent the dumping of inferior and dangerous drugs. The Minister dealt with the limitation of constitutional powers, and the Opposition offers some criticism on this point. We have no objection to the authorities that have been made responsible for the implementation of the principles behind the legislation. They are the National Biological Standards Laboratory in Canberra, the Australian Drug Evaluation Committee, the Biological Products Standards Committee and the Therapeutic Substances Standards Committee.

The Minister said that the basic standards for many drugs and medicines will continue to be monographs in the British Pharmacopoeia and British Pharmaceutical Codex. The Bill empowers the Minister to issue orders for specific standards, methods of testing, and requirements with respect to labelling, packaging and containers. As he said, of course, goods imported or subject to interstate trade coming within Commonwealth power will be required to conform to standards as determined by the Minister or as appearing in the British Pharmacopoeia, the British Pharmaceutical Codex or the British Veterinary Codex. They must conform to general standards and comply with packaging and labelling requirements determined by the Minister. The legislation is altered to cater for the advance of science and technology. As I have mentioned, plastics and similar packaging substances will now be subject to the controls imposed by this legislation. The Bill extends to veterinary products and the British Veterinary Codex will be specified as setting the normal standards. The Opposition agrees with this improvement in the legislation.

We do not take exception to the methods in the legislation of ensuring that proper standards are observed in relation to such matters as advertising in medical publications, through industry representatives and medical and scientific committees. Standards will be fixed by ministerial determinations instead of by regulation. In other words, in future they will be in writing and not by regulation as at present. I will deal with this change later. The Opposition wishes to give a word of warning to the Minister on this point, lt is a change that we think should be very carefully watched. Under the legislation the Minister may prohibit the import into Australia of dangerous substances that may cause disease or endanger life. One drug in this category is thalidomide. This control is now exercised by quarantine regulations or customs legislation, but the Bill now before us will provide emergency control. The fact that the legislation has the approval of the pharmaceutical industry, manufacturers and distributors and the fact that there is a general acceptance of the need to exercise control over drugs add to the value of the legislation. The industry, of course, will be represented on the special committee that will be set up. I have mentioned these points because I thought it was important to do so.

In a general sense, we do not disagree with the. proposals in the Bill. However, I want to speak on one or two points that are important. I want to refer especially to the provision that enables the Minister to make ministerial determinations in writing fixing standards. This will replace the present method of fixing standards by regulation. The Minister said -

The reason for this change is a recognition of the fact that the processing of. a large volume of highly technical material by regulations, which is the position under the present Therapeutic Substances Act, is considered unsuitable and has proved impracticable.

The Bill provides for determinations of standards by the Minister to be notified in the Common wealth Gazette and, of course, copies will be available to all interested parties immediately.

There is no doubt that this is a more speedy process. It however does not afford Parliament the opportunity to disallow the regulations and in this way it gives the Minister wider powers than are generally accepted. The order now is to be in writing, but it will not go to Cabinet or the Governor-General. It will not require the approval of the Executive Council and Parliament will not be able to disallow it. In other words, by giving these instructions in writing the Minister will be able to sidestep the Parliament under this provision of the Act.

Without a doubt the process will be convenient and probably more efficient, and there appears to be justice in the Minister’s submission that it is necessary to do this. The fact that the orders will be published in a loose-leaf book, readily available, does not detract from the efficiency of the move but the procedure is a way of sidestepping regulations, and the Opposition is not in general agreement with it. With some reservations the Opposition accepts this change only because it feels that in the matter of health, particularly relating to inferior or dangerous drugs, prompt ministerial action may be necessary. This does not mean that we are in full agreement with the proposal but we accept it for the reasons mentioned - the urgency, the importance and the necessity to safeguard health standards, sometimes very quickly and sometimes immediately.

I mentioned earlier that the provision governing standards for veterinary products by specifying the British Veterinary Codex as the normal standard for veterinary substances is an improvement, providing as it does a basis similar to that applied to substances for human use. I mentioned also that the provision in the Bill giving the Minister power to prohibit the importation into Australia of dangerous substances - that is, substances which may cause disease or endanger life - is a desirable change. The present proposal under the Act making it necessary to invoke quarantine measures in respect of dangerous substances, the restriction on the importation of such substances under Customs legislation with the co-operation of the Minister for Customs and Excise appears to be a rather cumbersome and pedestrian approach to an urgent problem. The direct emergency control power given to the Minister should make for a more efficient control with beneficial results all round. lt will be seen that the Opposition does not differ greatly from the Government except on one or two of the matters that I mentioned earlier in my speech. 1 want now to deal, however, with the importance of maintaining standards and safeguarding the public in respect of standards of drugs by seeing that the public is supplied with only the purest of drugs under this legislation or under any health scheme. 1 think it is worth recording that this is a matter which naturally must concern all Australians in view of the amount of drugs used and the number of prescriptions filled under the free medical scheme. I quote from the Annual Report of the Commonwealth Director-General of Health for 1964-65. Page 78 of the report shows that in 1965 the total cost of prescriptions to the Australian public for pharmaceutical benefits prescribed was £43,667,761. Later the report shows, under figures for the various States, that drugs are now costing £3 19s. 4d. per head of population and that each prescription is costing 18s. 4d. With an amount of £43 million involved and a cost per head of £3 19s. 4d., it will be agreed that there is a necessity, and a demand, not only on the question of life and death, but in all cases, to see that an expenditure of that kind should cover only drugs that come within the scope of an Act that provides safeguards that are essential. There is no doubt also - and I make this in passing reference - that the drug houses of Australia and of the world are doing exceptionally well out of the Government’s scheme. We know that in this Parliament cases have been cited of huge profits being made by drug companies from the supply of pharmaceutical benefits. Sometimes, through no fault of those concerned, but because of the human element, we have had cases such as the drug I mentioned earlier and others that have caused great problems, difficulties and suffering to people.

While dealing with the need to maintain standards I cannot help but quote from an article that appeared in the Brisbane “ Truth “ some time ago written by Senator Doctor Felix Dittmer, a very well known member of the Parliament and also one of the most eminent medical men in the Parliament. As a State colleague of yours, Mr. Deputy Speaker (Mr. Drury), you would know that what he writes would have value, substance and authority and above all would show his great knowledge of the subject.

Mr Haworth:

– He is a member of the Labour Party.


– That makes his article all the more intelligent and impressive. He speaks as a medical man. I have heard a medical man from the honorable member’s side of the House speak and you would think, from what honorable members opposite say, that he was in the category of being beyond reproach when he speaks. So I do not see why Dr. Dittmer should suffer by comparison. Let us see what Dr. Dittmer had to say about the drug trade, lt gets back to the need for legislation of this kind. This is what he said -

The drug trade of Australia should come under the notice of the Federal Government, not only because it is fleecing the public, but also because it represents another white-anting intrusion by overseas companies into local investment and manufacturing, with the Australian people being robbed and the dividends going to overseas corporations.

Today 65 per cent, of the ethical drug houses are owned by overseas interests. We have our old friend Parke Davis of the United States here since 1902.

They have been added to by Smith Kline and French, Lilly, Cyanamid, Pfizer, Merck Sharp and Dohme (offspring of the big German group), Schering, Upjohn, Johnson and Johnson and others.

From the good old Mother Country come Beechams, Burroughs Wellcome, Boots, Glaxo and others to take their pickings from the Eldorado.

Of course, Germany, France and other countries are not going to miss out and from them have ventured forth Hoescht, Boehringer, Schering, Ciba, Geigy, Roussel, Sandoz and a host of others.

It shows that there are huge combines which are certainly making a considerable amount of money out of the Australian taxpayers under the pharmaceutical scheme. I should like to take the matter a step further and quote a few of the profits of these companies in order to show that the methods adopted by the drug companies cannot be dismissed idly. There is a need to ensure that the standards of drugs provided are of the highest possible quality. The drug companies put a lot of their costs down, so we are told, to research. The “ Financial Review “ recently drew attention to the profits made by the drug companies. These companies have been extremely reticent about providing information, but under the new Companies Act many of them have been required to publish financial details. In the year ended November last, Merck, Sharp and Dohme earned a net profit of almost £400,000 on paid ordinary capital of £200,000. While the company undoubtedly employed funds other than its ordinary capital this return is staggering. This was a return of 200 per cent, on capital, but the report indicated that the year’s results were below the level attained in the previous year. As a result company dividends had been cut from 100 per cent, to 75 per cent. Eli Lilly made 66 per cent, on paid capital. Essex Laboratories made 140 per cent, on paid capital. Boots Pure Drug Company (Australia) Pty. Ltd. made 40 per cent, on paid capital.

These are the more spectacular results. Sterling Pharmaceuticals, for example, made 1 1 per cent, on paid capital and Warner Lambert made 28 per cent. The “ Financial Review “ suggested that some of the drug companies were selling products at gross profit margins anywhere between 75 per cent, and 100 per cent. Not a bad rake-off from drug prices. That would not be so bad, but when we check on these matters we find that the report of the Commonwealth Director-General of Health shows that some of these companies were exploiting the Australian public, because they were overcharging for pharmaceutical benefits drugs supplied to the people of Australia. It was not until the honorable member for Hughes (Mr. L. R. Johnson) referred to this question in the Parliament that some of these companies refunded excess moneys they had taken or reduced their prices. On page 15 of his annual report the Director-General of Health said -

Drug prices are continually under review by the Department and considerable attention is devoted to price negotiations with drug manufacturers. Negotiations with manufacturers during 1964-65 resulted in price reductions which would have saved the Commonwealth approximately £2,500,000 in a full financial year if the rate of prescribing of these drugs had remained constant.

Although reductions in price have been effected in respect of most therapeutic groups of drugs, those reductions with the greatest financial effect were in respect of commonly used drugs, such as analgesics, antibiotics, hypnotics and antihistamines.

Honorable members opposite can see, even from the annual report of the Department, that the drug companies were exploiting Australian people in respect of drugs which were in common demand. This proves that there is a necessity for legislation of this type. One of the regrettable features of the legislation is that it does not incorporate some clause whereby the price of drugs can be controlled and drug companies brought to book to prevent exploitation of that nature.

I now want to touch on just one or two other points. All honorable members know of the necessity to maintain the standard of drugs and we know the difficulties associated with doing so. I have here a report by Professor F. H. Shaw of the University of Melbourne who, when addressing a gathering of medical people a couple of years ago, said that roughly 600 new drugs appear every year. He said that some of them were completely new in their field and others were refinements of existing drugs, perhaps produced by rival drug manufacturers to meet competition. With 600 different drugs appearing each year - there may be more new drugs now, for all I know - it will be realised that great problems confront people endeavouring to make certain that drugs are of such quality that there cannot’ be the tragedies that have occurred in recent times. Such drugs have been brought info Australia. For example, I have here a report by a doctor who said that most aspirins had failed the test as the acid limit had been exceeded. We find other cases where drugs are under suspicion from time to time by doctors. Honorable members may remember the case not so long ago when effort’s were made to limit the sale of phenacetin because, they stated, its side effects were disadvantageous to people who were taking that commonly used drug. We have found right through that people taking ordinary headache drugs have been constantly worried about whether the drugs prescribed might have had some side effects.

In 1963, Mr. F. J. Boyd, chief pharmacist of the Victorian Mental Hygiene Department - an expert - said that a recent order of 500,000 aspirin tablets supplied to a hospital were of only half the strength they should have been and consequently were inferior and below the standard prescribed. As such they may not have had bad effects, but they were below standard. Honorable members will recall the drug thalidomide which, throughout the world, caused tremendous problems and great suffering and worry and had unfortunate effects on many people.

Undoubtedly some of these sub-standard drugs do get through. It has been said that there is no way of definitely overcoming that situation and that every precaution is being taken. Because efforts are being made in this legislation to prevent a repetition of drugs of the type I have mentioned getting on to the market, having such reactions or side effects that they affect the health of a person or destroy life, it deserves the support and concern of all people. We on this side of the chamber appreciate the problems associated with these drugs.

The Opposition will not oppose the measure. We hope that it will be such as to make watertight any loopholes that may now exist in respect of the use of drugs, their quality and their standard. The general provisions of the Bill are acceptable to us. However, in the Committee stage we may have a word or two to say on certain aspects of the legislation where we think criticism should be levelled. But our general approach is that any legislation that will protect the health of the people of this country and will safeguard their general welfare will have the support of the Opposition. This Bill, which is an advance on the 1953 legislation, gives an indication of the need to review constantly legislation of this kind in order to keep pace with the times. On behalf of the Opposition I issue that word of warning in the hope that it will prevent a repetition of the tragic events that I mentioned earlier, will fulfil the hopes of those who sponsored the legislation and will be a further step forward in maintaining the highest standards of quality of drugs which are so necessary in a successful health scheme in this country.


.- Everyone will agree with one thing that the honorable member for Grayndler (Mr. Daly) said: There is no act which is more important than one which relates to health. Indeed, that remark is most applicable in respect of matters that we are about to discuss in the debate on this Bill. As the honorable member for Grayndler has said, the Therapeutic Goods Bill is important because it provides for standards of drugs which can and do have application to the life of every person in the community at some time during his stay on earth. In spite of this legislation relating to drug safety and health matters, generally speaking discussions of this type in the past have not provoked much interest or excited the community unless something serious has gone wrong and people have died either from an overdose of a potent drug or the lack of some safety measure that should have been taken in research, either before or after the manufacture of a drug. Fortunately in these days these are very rare incidents.

Because we live in an era in which all these safety measures are taken for granted, most of the credit, if not all, is given to the Government. The standards that the Government prescribe are always announced and promulgated, but they arouse very little interest and, probably, very little credit is given to private enterprise, which has much to do with the question of standards relating to dangerous drugs. I propose to say something about that a little later. The Therapeutic Drugs Bill which is now before the House is similar to three other bills which have been introduced into this Parliament. These bills are mentioned in the measure now before us. One was introduced in 1937, one in 1953 and the other in 1959. One of the three earlier hills was never proclaimed and a quick look at the legislation now before us will probably show the reasons why. I think one of the reasons was that it merely distinguished drugs from biological products. It set out the basic requirements and standards adopted at that period of our history and mentioned that they were to be controlled by the authorities, all but one of which still exist and operate today. The exception is the League of Nations. But in the main the power to see that these standards are properly policed remains in the same hands today. The power remains in the hands of State Governments. At that time of our history, comparatively few drugs of any major importance were discovered and it was relatively easy to keep a check on them. But that bill lapsed and was never promulgated.

Immediately after the war, two things happened. New life saving drugs were discovered very rapidly and the Commonwealth Government became the biggest purchaser of medicines through the Pharmaceutical Benefits Act. Consequently, the Commonwealth Government had a responsibility to see not only that it established a framework of standards for therapeutic substances for the whole of Australia but also that the drugs being supplied as pharmaceutical benefits and costing the taxpayers millions of pounds were capable of doing the job that the medical profession believed they would do without any dangerous side effects. It was because of these circumstances that the late Sir Earle Page introduced his 1953 legislation, to which the honorable member for Grayndler referred. The Bill we are now discussing, and which repeals that 1953 legislation, goes very much further. It gives the Minister power to do, by ministerial direction, what he previously was only able to do by regulation. The honorable member for Grayndler drew attention to that difference. This legislation covers not only drugs and medicine but also certain appliances. I point out for the benefit of the House that today some drugs are sold in combination with the appliances by which they are administered. I suppose that is the reason for the specific reference to appliances.

I feel it incumbent upon me to point out that implementation of the provisions of the Bill by ministerial declaration is a new departure. It widens the scope of administration and control of pharmaceutical products. Whilst I am most anxious to see every step taken to protect the people of this community from the possible harmful effects of drugs which do not measure up to required standards, I would like to hear from the Minister, in winding up the debate, what are the reasons for the withdrawal of an important safeguard such as regulations approved by the GovernorGeneralinCouncil. I have discussed this matter at great length with the Minister. I might be a little old fashioned, but I find it hard to appreciate the reasons for abolishing regulations in favour of ministerial orders, particularly when the Bill imposes no obligation on the Government to consult with the industry in connection with standards.

Originally, most of the committees established by regulation under the 1953 Act to recommend standards for drugs and things of that nature included some representatives of the industry. In 1960, without any reference whatsoever to the industry, the industry representatives were removed from all but one of those committees. The only committee on which they remained was the Therapeutic Substances Advisory Committee, which, the industry informs me, has never met, despite protests and requests from the industry. The originator of the Therapeutic Substances Act 1953, the late Sir Earle Page, was a very strong believer in the type of committee which encouraged co-operation between industry and the Government. We find now that the Government has taken a right about turn. In fairness to the present Minister for Health (Dr. Forbes) I must point out that this change of attitude towards encouraging the co-operation of industry took place during the previous Minister’s regime. Consequently, he may not be familiar with the reasons why the industry representatives were removed from these committees. The industry is rather concerned about this change of attitude, and I can understand that. It hoped that the Bill would provide some means of preserving co-operation. It hoped that, in addition to having the Minister’s assurance, some provision for co-operation would be included in the legislation.

At this point, 1 think I should mention some facts relating to the pharmaceutical industry itself and the introduction into the community of new drugs. I think the House must be reminded of these things so that it can appreciate that the pharmaceutical industry plays a very big part in setting up standards for the purity of drugs. Virtually all new therapeutic substances developed over the past 25 years have been discovered and developed by the pharmaceutical industry. For example, 499 out of 544 new substances discovered between 1941 and 1961 were discovered by the industry itself. The others were discovered by institutions and universities. To narrow the field a little further, I offer some interesting figures. Out of the 66 most valuable medicines discovered, only nine have been the result of research work carried out in academic institutions. The other 57 were produced by the pharmaceutical industry. The honorable member for Grayndler should have taken these facts into consideration before making the castigating remarks that he did at the end of his speech.

The only information which the Government has about standards for all the new drugs that have come into use is that which has been given to it by the industry itself. In other words, the Government would not have any information relating to the standards for these new drugs if the industry had not provided it. If the rate of scientific progress in the realm of medicine were left to Government institutions and universities, progress in the field would be very slow indeed, having regard to the figures to which I have just referred. I wish I had time to give some factual information about the paucity of the contribution made to new drugs where the whole of a pharmaceutical industry is under the control of a Stale monopoly. It would make a very interesting story, and if I have the opportunity I shall say something about this at the conclusion of my remarks.

The pharmaceutical industry believes that the power of the Commonwealth Government to make standards is sound in principle as it ensures a degree of international uniformity in an activity with international ramifications. In other words, the industry agrees that it is most important that we set the highest possible standards for drugs. The great percentage of manufacturers engaged in the industry know that there are no tests more exacting than the ones they apply to their own products. Their prestige is far too important for the position to be otherwise. The danger of impure drugs lies amongst manufacturers who have no interests in the drug trade other than mercenary ones. Fortunately, they are very few in number. The industry, in the main, applies the most exacting tests to its own products and welcomes any legislation that will exclude the manufacturer of poor quality drugs. It believes that it can do more to help the Government to maintain high standards by being on a consultative committee than the Government can do without it. That is the particular omission in this Bill to which I refer. There is nothing specific in the Bill to suggest that the Government will consult with the manufac turers of these important drugs. I would like to remind the House of the opinion of the World Health Organisation- and, incidentally, our Director-General of Medical Services is at the World Health Organisation at present. The World Health Organisation in one of its technical reports draws attention to the importance of the pharmaceutical industry in laying down standards for drugs. The Organisation’s opinion is that Government controlled laboratories are unable to examine every batch of every pharmaceutical preparation on the market. It suggests that no inspector would have the exceptional qualifications to inspect manufacturer control procedures in the industry. All this adds up to the fact that the Government is not acting wisely by not including representatives of the industry on consultative committees. In fact, if the Government does not include representatives on these committees it is only bowing to the type of academic snobbery that exists between administrative control and those people who do the research work.

I refer now to medicines that are under State control. Honorable members will recollect that in his second reading speech the Minister said -

Similarly, the Commonwealth will not enter into the general control of family remedies, including the bulk of proprietary lines. These will remain a State interest. The Commonwealth will only intervene if a substance becomes a pharmaceutical benefit or if there arises a necessity to provide standards for any particular item or type of substance which is imported or which is sold interstate, to prevent it having a deleterious effect on the public in general. For example, one type ot preparation in this field for which standards may be laid down is proprietary eye drops, to ensure they are sterile.

I have discussed this matter at length with the Minister and he has assured mc that he has no intention of overlapping State interests in the control of patent medicines. I was particularly pleased to hear him confirm this in that portion of his second reading speech that I have just quoted. State Governments have their own health departments, pharmacy boards, poison laws and pure food acts relating to drugs and it would be duplication, bureaucracy gone mad, to inflict any further legislative action on the manufacturers when the State Governments are already doing a good job in this direction. They are efficient watchdogs for drug safety.

The honorable member for Grayndler criticised the profits made by the drug trade. He was. rather unfair. If he makes these criticisms he should also comment on the fact that it is the pharmaceutical industry that provides most of the new drugs. I point out that in developing one new efficient drug, if only one person were involved, the time occupied represents about 19 working years of a research chemist’s life. A lot of research work is involved in developing new drugs. Recently Professor Chain, the 1945 Nobel Prize winner for his work on penicillin, made a statement well worth repeating. He said -

I cam al conceive of any other system which could replace the pharmaceutical industry in the job it has done so successfully.

He referred to the fact that the Soviet Union, where State monopoly control exists, has produced no pharmaceutical product of note in 50 years. I have been in most of the pharmaceutical laboratories where some of these outstanding drugs have been produced. I have seen laboratories in the United Kingdom, in the United States of America, in Europe and even behind the Iron Curtain. While the laboratories in the Iron Curtain countries where State monopoly control exists are good, their work and the size of their establishments are miniatures compared with those in countries that have a system of private enterprise. Today there is undoubtedly a shift away from universities to industrial laboratories, many of which are larger, better equipped and better organised to control the new drugs that are emerging. If it were left entirely to government institutions and universities little progress would be made with new scientific drug discoveries.

The Government should be commended for strict standards for pharmaceutics but I doubt whether it is wise to delete from this legislation the aspect of government regulations and to substitute ministerial control. This is a unique move and something this House is not used to, and I do not believe it is necessary. I hope the Minister will give some real assurance that he wants the co-operation of the pharmaceutical industry and will be prepared to show this desire by co-opting representatives of the industry to the consultative committees that control therapeutic substances.


.- This Bill is welcomed by the Opposition. We have a strong feeling that there is a great need to ensure that drugs are safe, pure and potent as the Minister for Health (Dr. Forbes) indicated in his second reading speech. Australian agencies and government instrumentalities are engaged on the consideration of this important work and due tribute should be paid to them in this House, even if it has not been paid to them in terms of adequate support by the Government of the day. I refer to the Australian Drug Evaluation Committee, the Biological Products Standards Committee and the Therapeutic Substances Standards Committee, all of which have done a very worthwhile job. But the situation of these Committees is similar in many respects to the position of the man pushing the wheelbarrow down the street. It seems that these Committees still have the job in front of them to a very large degree.

I am delighted with the scope of this Bill. It is proposed that the Minister for Health will issue formal orders about matters. The Minister will be empowered to determine, by issue of formal orders, specific standards for individual products. At present this can be done by regulations under the Act. There is nothing in the way of real progress there. The Minister also will be empowered to determine general standards for all therapeutic goods or for certain classes of goods such as tablets, capsules, injections, etc.; methods of testing for compliance with standards; and requirements with respect to labelling, packaging and containers. The Minister has mentioned a number of other important matters and the obligations and responsibilities that the Government considers it has. Those are the obligations upon which the Government is prepared to act and to do something about.

Before I proceed to look any further at the provisions of the Bill, I wish to make some comments on the observations made by the honorable member for Isaacs (Mr. Haworth), who preceded me in the debate. A great need exists for us to ensure that we are getting value for our money. We are expending an enormous amount of money in this field. The honorable member for Isaacs took to task my colleague, the honorable member for Grayndler (Mr. Daly), who correctly, in my view, drew attention to the high cost of drugs in Australia and also to the fact that sufficient concern has never been demonstrated by the Government not only about standards but also about such things as the ownership of companies engaged in the drug industry.

It is important to realise that the Australian health bill is rising at a phenomenal rate. It is rising at the rate of approximately 8 per cent, per annum. 1 think that last financial year the aggregate cost of all health services in Australia was in the vicinity of £400 million or $800 million. We must consider the various facets of this tremendous service. I refer to such things as hospital, medical and pharmaceutical benefits, the pensioner medical service, allowances paid to tuberculosis sufferers, repatriation medical treatment and the miscellaneous expenditure by the Commonwealth on such things as quarantine services and the like. We must consider also personal expenditure on medical, hospital, pharmaceutical and funeral services. All these facets add up to a total of £400 million per year.

If we make a careful analysis of the position and look at the Australian situation compared with that prevailing in the United Slates of America, the first thing that becomes glaringly apparent is that we are not getting a good return for our money and that a much better job could be done to provide health services for the Australian people with the money available. The cost of these services totals £36 per head. If we look closely at the figures in the United Kingdom we find that the expenditure there per head is £A24. That amount covers a far more comprehensive service. A vital part of that service is the availability and cost of drugs. It is quite useless, pointless and unnecessary for the honorable member for Isaacs to throw up his hands when some point of criticism is levelled at the Australian drug companies. When we make a careful examination of the Australian drug companies, we can see that we are left in doubt or. shall we say, left up in the air no matter how fastidious our inquiry might be because it is almost impossible to look at the structure, the conglomeration and the manner in which the various companies are intertwined with one another and to ascertain the kind of profit that is being made.

I challenge the honorable member for Isaacs or the Minister for Health to indicate what profit is being made out of the Australian national health scheme at the present time. Yet, this indictment on the part of the honorable member for Grayndler is dismissed in an airy-fairy fashion. The justification for this is supposed to be that the drug companies are engaged in research. We’ll, it is true that these companies are engaged in research. We commend those companies that are engaged extensively in research. But it is equally true that there is a high incidence of passengers in the industry in Australia. It is equally true also that because of the extent of overseas ownership of drug companies operating in this country, the research carried out has little application to Austraiian needs and conditions. 1 understand from information given by the Minister for Civil Aviation (Mr. Swartz), when he was Minister for Health, thu: of 144 major drug companies operating in Australia, 66 are completely owned overseas. I am told that not one of the leading 30 companies is substantially owned in Australia. These facts have a great number of ramifications. It is not just a case that things are not developed by the standards that are necessary to this country such as climatic conditions. It is the unfortunate fact that an adverse and unsatisfactory sequel exists as far as our export industries are concerned. Many of these companies operating Australian concerns as subsidiaries and counterparts preserve for themselves the export franchise. A major company operating in Australia and owned by a parent company in the United States of America or the United Kingdom, is denied the right to export drugs to our own area in Asia. I know that it is not proper to develop justification and figures for the contention I have just put. But if the Minister for Health takes the trouble to look at this matter he will recognise the fact that we are being denied the right to develop a very important industry which, in the long run, could have an extremely decisive effect on our balance of payments situation.

The same kind of problem is in evidence so far as research is concerned. We have denied almost completely the opportunity for young Australians skilled in the. various aspects of medicine, science and pharmacy to engage in an indigenous Australian pharmaceutical research industry. Already we have lost many of these young people; they are employed overseas. It is time for us to develop some Australianism and become really conscious of our nationalism in regard to this matter. I have mentioned the cost of our health scheme. It amounts to £400 million annually. I think th: expenditure on drugs is in excess of £50 million now. I must get into the habit of convening these amounts into dollars, lt is important to see the reflection of this in the position of pharmacists and doctors in Australia. Let us take the pharmacist working in a chemist shop. The average chemist shop is receiving under our national health scheme payments for handling drugs. The cost of drugs provided under our national health services are underwritten by the resources of this nation. This is an important point. This is why we have a responsibility to ensure that our standards are high. This is why we have the responsibility to ensure that our prices are right, and that we are not taken for a ride. The cost of these drugs is underwritten by our great resources. We do not want anybody battening on to us unduly, unnecessarily and excessively.

We are able to see a reflection of this in the figures in relation to pharmacists’ shops. The national health scheme alone pays to each pharmacist an average of not less than $6,400 per year. This is an aspect of the business that is readily understood. A great deal of business, however, is done outside the national health scheme. It is done outside the free list for pensioners and the free medical list as it is called even though everything available on this list to the people is not completely free.

A reflection of the great volume of expenditure incurred by the people of this country for the services of doctors is given by the fact that the average practitioner’s income from the National Health Scheme alone, irrespective of what he receives from patients, is 510,460. Since the Commonwealth underwrites a substantial part of the large annual bill of $800 million for medical services, it is important that the Commonwealth should have a greater voice in the manner in which these funds are expended. We do not approve for one moment of the attitude expressed by the Minister not only in regard to the Therapeutic Goods Bill 1966 but also in regard to many other mutters such as the Quarantine Bill which was discussed in this Parliament last week, The Minister’s attitude is that the Commonwealth is engaged only in providing the money and that it is not concerned with differences between standards operating in the various States. We are one nation, one people, and it is important for us to ensure that good standards prevail throughout the nation. We should give the highest priority to the health and well-being of the Australian people. That is why we on this side of the Parliament are not at all impressed with the Government’s willingness io deal only with part of the problem. We still have a very long way to go.

My colleague, Senator Cohen, asked some questions in another place in September of 1964, and I would like to read to the House the replies that he received. They will show that in this year of grace 1966, after this Government has been in office for 17 years, we are only now preparing to do some of the elementary things with regard to therapeutic substances which were done years and years ago in the United States of America and other countries, and which in recent times are being done in those countries with a greater degree of finesse. It is not necessary for me to read out the question asked by Senator Cohen; it merely led to the following answer by the Minister, as recorded at page 476 of “Hansard” for 16th September, J964- lt is not a Commonwealth requirement that the contents of prescribed drugs be shown on the label of the container, and a good deal of consideration of the various medical and pharmaceutical issues involved would have to be undertaken before any such requirement could ba introduced.

That was 15 years after this Government took office. The Minister went on to say - lt may also interest the honorable senator to know that my department is currently taking active measures to ensure that the medical profession is aware of the likely adverse reactions to drug therapy, including the hazards that may be involved in the use of anaesthetic agents. A poisons register is also in the process of being compiled-

I emphasise “ in the process of being compiled “ - by my department to enable prompt advice to be given to the medical profession for the treatment of ill effects resulting from overdoses of drugs or the consumption of poisons.

Mr Curtin:

– How many years was this after the Government took office?


– It was 15 years after. It is true that there has been some concern about this matter and several other matters at the State level, but the differences of standards have continued. The well-being of the people has been neglected. Even if this Government contends and is able to establish that its constitutional powers are limited, it should certainly be able to show some co-ordinating leadership in matters of this kind, and this it has failed to do.

It would be wrong for the Opposition not to express its appreciation of this Bill, because it does represent some kind of improvement. As I have said, we do not oppose the Bill; we support it to the extent to which it moves to regulate a position which has been the subject of neglect and indifference for so many years. The constitutional limitation has been referred to. The measure of this Governments’ lack of enthusiasm is demonstrated by the constitutional constriction which, on the Minister’s own admission, continues to prevail after 17 years. Even now there is no proposal to do anything about this problem, which prevents the Government from tackling the therapeutic difficulties and which retards the Commonwealth’s capacity to safeguard the consumers. After all, that is what this Parliament is here for - to look after the welfare and well-being and uplifting of the people of this country.

The Minister admits the restricted field covered by the Bill. We can legislate about certain things. We can legislate about medicines and articles of medical equipment if they are imported, on the one hand, or if they are exported, on the other hand. We can legislate about them if they are subject to interstate trade or if they come within the category of Commonwealth pharmaceutical benefits. This is all very well and good if one has a sickness which requires him to obtain one of the drugs which are imported or are on the list of Commonwealth benefits. But there are many of these things that are not.

The Minister himself has said that there are 20,000 to 30,000 therapeutic agents available in Australia and that many will not be regulated by the provisions of this Bill. The Minister has made that clear and we want to know why something is not being done to enable this Parliament to bring down a Bill that will cover them all. There are very many that are not covered. Let me mention several categories. Locally manufactured goods are not covered. This is not my assertion; it is what the Minister said. This Bill does not cover locally manufactured goods, lt does not cover goods which are involved in intrastate circulation or supply. The supply and consumption of these goods intrastate are not covered. The Commonwealth will not involve itself with family remedies. This is what the Minister has said. Why cannot an Australian family have the satisfaction of knowing, and the sense of security that arises from knowing, that the family remedies that it gives to one of its children have therapeutic purity? Certain bulk proprietary lines are also not covered.

In other words it is very clear that for the last 17 years the people of Australia have been sold short. How many of these 30,000 therapeutic agents will be covered? Has the Minister caused his Department to do any dissection along these lines? Can he give us any projection so that we can gain for ourselves an appreciation of the progress which this Bill demonstrates? The Minister said in his second reading speech -

The Commonwealth will only intervene if a substance becomes a pharmaceutical benefit or if there arises a necessity to provide standards lor any particular item or type of substance which is imported or which is sold interstate, to prevent it having a deleterious effect on the public in general.

We are not concerned only with things that have a deleterious effect on people. What we want to know is this: Will the drug, medicine or family remedy have any good effect on people? It is not just a question of a possible deleterious effect. The taxpayer is buying these articles. What he should be able to find out is whether a particular commodity is merely a hoax or whether it has been misrepresented in advertising on the label or in the Press or through radio. Can it do what it says it will do? These are the questions that we want answered. Does the Minister deny that the Australian people have a right to be safeguarded in this manner? If he does, let him say so frankly instead of hiding his attitude behind a host of ambiguities. The Australian people will then be well served as a result of this debate. They will know where they stand.

There is a feeling in Australia today th there are people producing medicines, ointments, pills and drugs of various kinds who are battening on the sick and the ailing in the community. We have heard, for instance, about a fellow on the north coast of New South Wales, a cancer quack as he is known, who has been doing business with people who have found themselves in the most unfortunate position possible and who are not being given any protection at all. This Government has failed to demonstrate any interest in’ this matter. There are many people operating in a similar manner. It is the Government to which the people look for protection, and there is much evidence that they are not being sufficiently protected.

This Government, under its own legislative enactments, has condoned various unsatisfactory standards. The list of free medicines available under the pharmaceutical benefits scheme and the pensioner medical service contains many examples of variations in the standards of drugs, pills, capsules, injections, ointments and medicines. Indeed, there are variations not just in standards but also in prices. We can look at a particular item in the schedule made available to chemists and see the same commodity listed under five, six, seven or eight different trade names. We may well ask: Are these the same generic substance? They are for the same purpose and are supposed to be the same generic substance, but they are not designated by their generic name. And there is a tremendous disproportion in the prices of the commodities under the respective trade names. The Australian people have a right to know that the substances being prescribed for them are of top standard. Nothing less will do. The Parliament and the people are entitled to know how long it will be before a thorough overhaul of drug standards is undertaken.

The National Biological Standards Laboratory is testing drugs listed in the schedule of pharmaceutical benefits and also imported substances. We pay a tribute to it for that work. The annual report of the Director-General of Health for 1964-65 indicates some of the problems with which the Laboratory is faced. A particular example is the use of plastic in containers for various drugs. The report states -

Another group of problems which has been tackled, in liaison with manufacturers, is the use of plastics for containers far injections, infusions, solutions and vaccines.

The main problems to be overcome are those of vapour transfer through the walls, interaction between the contents and the pack and *he mechanical properties, especially that of the heat resistance of the packs.

The report goes on at some length to deal with the problems of estimating the potency of Sabin vaccine. It mentions that all items coming on to the pharmaceutical benefits list are tested. The report continues -

The effects of this specific testing programme and of the random sampling of other products have helped to bring about a generally higher standard of quality control by manufacturers marketing pharmaceutical products in Australia.

The report states also, referring to the pharmaceutical benefits list, that in 1964-65 six items were removed from the list after failing to pass analysis. That is very good. It is interesting to see what kind of problem is being encountered in random sampling. The report does not indicate how many products have not been sampled. It indicates merely how many samples were examined by the National Biological Standards Laboratory in 1964-65. This reveals the manner in which the present Government has been dragging the chain for almost 17 years. Let me give the House not my own figures but official figures taken from the last annual report of the Director-General of Health, which gives a summary of all the samples examined by the Laboratory. Tt reveals that 738 official samples under the Therapeutic Substances Act were examined. Failures totalled 235. or 31.8 per cent. Pharmaceutical benefit samples under the national health scheme numbered 325. Failures were 72, or 22.1 per cent. Samples received from other departments and authorities totalled 219. Failures numbered 54, or 24.7 per cent. Samples under item 28a of the Customs (Prohibited Imports) Regulations and miscellaneous samples numbered 41. Failures totalled 22, or 53.7 per cent. The total number of samples examined was 1,323 and the total number of failures was 383, or 28.9 per cent.

Mr Benson:

– How recent are those figures?


– These are the results of sampling undertaken in 1964-65. These figures alone are cause for consternation and anxiety on the part of the Australian people. It is good to know that items provided under the pharmaceutical benefits scheme are being sampled, but it is distressing to know that otherwise only random sampling takes place. How many substances are yet to be sampled? Is it reasonable to assume that the failure rate in tests of samples of substances not yet sampled because of the lethargic approach of the present Government to this problem after 17 years would be so high as to indicate a threat to the health and wellbeing of the Australian people? The Australian Government’s attitude is half hearted compared to the attitude of governments in other parts of the world. In the United States of America, for example, a forthright and vigorous attitude has been adopted. I have here a report published in an Australian newspaper under the heading “ U.S. warns all drug makers”, which states -

The U.S. Government has issued this warning lo drug manufacturers:

Make them safe and effective or they will be taken off the market.

The edict came from the Food and Drug Administration.

That is the kind of edict that we need here as we have the high failure rate that I have mentioned in respect of tests of drugs. The newspaper report goes on -

The regulations, adopted despite strong objections from drug makers, apply to all drugs used that were cleared for sale from the time the 1938 Food, Drug and Cosmetic Act was passed . . .

I emphasise that those regulations were applied to all drugs cleared for sale from the time the .1938 Act was passed. All drugs are sampled in the United States. Let me read from an official document provided by the United States authorities a brief synopsis of their requirements. This synopsis of the present position in that country states that the key provisions in the relevant legislation -

Required drug manufacturers to register with the Government, operate under quality manufacturing controls and submit to regular factory inspections.

Required “ substantial ev:den;e :’ of a drug’s effectiveness and permitted the Health, Education and Welfare Secretary to “ immediately “ remove a drug from the market if it presented “ an imminent hazard to the public health “.

Greatly increased the time allowed the Government to approve or reject a manufacturer’s application to market a new drug.

Permitted the Government to require reports on use of new drugs and to establish tighter drug testing regulations.

Required drug labels to bear the common as well as trade name of the drug and its active ingredients.

Required that increased information on a drug’s side effects, possible dangerous properties and effectiveness appear in drug advertisements.

Similar requirements could well be set out in this Bill, Sir. I commend to the Minister the suggestion that a great deal more remains to be done, however much we may appreciate what has been done so far. I have with me a number of newspaper clippings containing reports that indicate the concern of many eminent medical men and numerous leading pharmacists about the quality of some of the contemporary drugs that have come among us. Gynaecologists have talked much about the pill. Many people have talked a great deal about the apparent link between certain drugs and dreaded diseases such as leukemia. The task of maintaining the highest possible drug standards can never have too high a priority and can never give rise to too great a sense of urgency. We believe that this Bill represents a step along the road that we should take, but we urge the Minister not to allow this forward step to go to his head and not to be placated. A great deal more must be done if the Australian people are to have protection equivalent to that available to people in other countries.


Mr. Deputy Speaker, I wish to discuss two or three matters only. I congratulate my colleagues on their presentation of the Opposition’s case and on their analysis of this important Bill. Some parts of the second reading speech made by the Minister for Health (Dr. Forbes) are very important, but I have not time to quote them. But I would like to comment on the Commonwealth’s power with respect to control over the dumping of inferior or dangerous drugs on the Australian market. The Commonwealth can handle this matter effectively only at the point of importation of the drugs. Drugs manufactured in Australia ara supposed to be tested by the National Biological Standards Laboratory here in Canberra, but I often wonder whether the Laboratory can carry out its colossal programme of testing all new drugs, because so many are coming on to the market so rapidly. I sometimes wonder whether the job is beyond the capabilities of the Laboratory, although I am sure that the staff of the Laboratory are, individually, quite capable of doing their work.

The honorable member for Hughes (Mr. L. R. Johnson) referred to the growth in the number of drugs available on the Australian market. All of these must be tested and proved before they can be put on sale. The work entailed is colossal. I pay a tribute to the Laboratory staff who are doing their utmost to maintain the high standard of drugs produced in Australia.

The Commonwealth’s powers in the matter of therapeutic goods are not, in my opinion, wide enough. The Commonwealth does not have power over certain drugs. It has power only if a substance becomes a pharmaceutical benefit or if the necessity arises to prescribe standards for any item or substance imported or sold interstate to see that it does not have a bad effect on the general public. The Commonwealth has power to prevent the importation of inferior drugs. It therefore must test every drug imported. The Commonwealth has a responsibility not only in relation to drugs produced in Australia but also in relation to drugs imported from overseas. If the Minister for Health replies 1 would like him to say whether he believes that the Laboratory is big enough to handle adequately the colossal task that has been given to it in the interest of the health of Australians.

I turn now to a matter that has caused some concern. This matter was raised at the Congress of the Australian-New Zealand Association for the Advancement of Science, held in Hobart in August last year, where it was stated that drugs which could be deadly because they did not dissolve sufficiently or quickly enough were being prescribed for the treatment of thrombosis and heart complaints. A newspaper report of the Congress proceedings reads -

A lecturer in pharmacy at the Otago University, New Zealand (Dr. G. B. Engel) said that about one third ot the drugs submitted (or analysis at his laboratory failed to conform with the standards set down by the British Pharmacopoeia. He said that there was a wide range of specifications set down by law which the drugs failed to come up to. The most serious was the slow dissolving rate found in brands of the drugs digoxin, a heart tablet, and phenindione, an anti-coagulant. If they were prescribed, these two drugs “ would be just as fatal as if no treatment at all was given,’’ he said.

Four brands of phenindione - used widely for breaking up blood clots in conditions like strokes - had been tested under laboratory conditions. Three of the pills dissolved in under a minme. The fourth - put out by an oversea manufacturer - took more than three hours to dissolve. “ We did not have the courage to try this brand clinically on very sick people,” he said.

Four patients at the Dunedin Hospital had been under treatment for heart conditions with a brand of the drug digoxin. They had to stop using the drug when the dosage had been pushed up to dangerous levels without showing any result. When this drug was analysed, Dr. Engel said that it was found that the manufacturers had incorporated a substance which made it impossible to find out how fast the drug dissolved.

Asked whether these two brands were the cheapest, Dr. Engel said: “The hospital pharmacists got what they paid for, but the patients did not get what they bargained for.” Asked whether the drugs he had tested could have been old and have lost their efficiency, he said there was no date limiting use on the pill bottles. Whether or not they were old, they could have been prescribed for patients.

Dr. Engel said the brands were on sale in New Zealand, and he thought they were available in Australia. He called for a more active enforcement of drug laws to prevent worthless brands being marketed, and more stringent tests by the Pharmacopoeia to pick up drugs that did not dissolve rapidly enough.

That report refers to another feature of drugs that could have bad effects on patients. 1 would like the Department of Health to look into the matter raised by Dr. Engel in Hobart last year in order to ascertain whether drugs of this kind arc coming into Australia. If necessary the Minister has power to stop drugs entering the country. He made this clear in his speech. He said -

The last provision of the Bill to which 1 wish to make particular reference concerns the sec-king of power for the Minister to prohibit the importation into Australia of dangerous substances, that is, substances which may cause disease or endanger life.

So the Minister has full power to prevent the importation of a drug or to have a drug withdrawn from sale.

The next matter 1 refer to relates to the urgent need to standardise bottles containing poisons. I understand that in the United

Kingdom bottles containing poisons are of a distinctive shape. They are triangular in shape, like the one that I have in my hand. They are adequately marked. All poisons are marketed in bottles of this type. Poisons may not be put into bottles of any other shape. In Australia poisons are marketed in bottles of all shapes and sizes. Nobody would ever know that the bottles contained poisons unless the label so described the contents. But sometimes labels are not sufficiently descriptive. Sometimes they come off the bottles. In the United Kingdom bottles containing poisons, as well as being distinctively shaped, are distinctively coloured. So, in two ways the English people are told that the contents of the bottle are poisonous. This Government should force manufacturers of poisons in this country to use a specially designed bottle for their products. This would condition the people over a period of time to recognise the bottle and to identify it as one containing a poison. The labelling on the bottle should be in distinctive colours and the lettering should be large.

Every year in Australia people die because they select from their medicine cabinets a bottle containing poison, mistakenly thinking it contains a medicine. This is why I stress the need to market poisons in a distinctive bottle. Time and time again we read in the newspapers oi’ deaths caused by this error. The error is understandable if a person who is not well goes to a medicine cabinet for a bottle of medicine. The person may have defective sight or other disabilities. He may even be intoxicated. He selects a bottle which he thinks contains medicine, but it contains poison. I know from the Minister’s second reading speech that the Commonwealth has power to deal with this problem. 1 will refer briefly to the Minister’s speech. He said that the Minister will be empowered to issue formal orders specifying requirements with respect to labelling, packaging and containers. He also said -

I referred earlier to the fact that under the Bill items of medical equipment as well as containers in which drugs and medicines are packed will be required to meet minimum requirements of purity, sterility, etc.

It would seem that he has the power to ensure that bottles containing poison are easily recognised and I make the urgent suggestion to him now that he examine the possibility of standardising the shape and colour of poison bottles throughout Australia. I believe that this would save many lives and prevent many deaths.

I want to say a brief word about the cost of diabetic foods. Although strictly this may not come within the provisions of the Bill, I should like to mention that diabetics in Tasmania and Victoria have been in touch with me and have complained of the excessive cost of diabetic foods. I appeal to the Minister, as my colleague, the honorable member for Hughes (Mr. L. R. Johnson) appealed to him, to have a look at the excessive cost of drugs to the Australian people. Diabetics must live with their disease for probably a lifetime. They must take insulin every day or they must take certain tablets every day. They must also have special foods. They must watch their diets and this means that food plays an important part in setting the standard of health of diabetics. If they must pay high prices for the food they need, they are being hit harder than anybody else in the community is. We may be hit by the high costs of drugs, but this does not effect our food bills. Diabetics, who must pay for special foods, should not be exploited.

We agree with most of the provisions of the Bill. We are glad that the Government has decided to tighten up the provisions relating to the purity of drugs. We wish the Department every success in implementing the Bill.

Minister for Health · Barker · LP

– in reply - In winding up the second reading debate on the Bill, I should like to say how much the Government welcomes the support that the Opposition has given to the Bill and indeed the positive enthusiasm the Opposition has for it. It is very nice to know that we have a united House on this subject. I should like to deal with one or two points that were made in the debate, both by Opposition members and by my friend, the honorable member for Isaacs (Mr. Haworth). Opposition members made considerable play of a part of my second reading speech in which I intimated that there was a limitation on the Commonwealth’s constitutional powers in this matter. I said that the Commonwealth’s powers extended to imports and exports, interstate trade, goods supplied as a pharmaceutical benefit and goods supplied to the Commonwealth or its instrumentalities. Honorable members opposite tried to suggest that this was an admission by me of some weakness in the legislation. I say quite categorically that it is not the view of the Government that this in any way represents a weakness in the legislation. The Bill gives us power to control, should we wish to do so, most substances of importance in this field. After all, there must be very few drugs that are purely a matter of intrastate trade and, of course, these are the only drugs excluded from the legislation. In relation to those drugs that do not come within the Commonwealth’s constitutional powers, we have every confidence from our examination of the State acts, from our contacts with the State administrations and from our experience of working with the States over the years in the administration of the Therapeutic Substances Act that the standards will be properly prescribed and administered by the States.

I take up now a point that was raised, I think, by the honorable member for Hughes (Mr. L. R. Johnson), lt is not the intention of the Commonwealth, to any great extent, to enter into the field of family remedies and proprietary medicines. This is not only because there is very little danger to the health of the community from a failure to apply standards in this field but also because, as I said in my second reading speech, this field clearly comes within the purview of the States. I repeat here the remark I made when dealing with the limitation of constitutional powers. We have every confidence in the legislative and administrative competence of the States to assist, in a co-operative effort, in ensuring the general standards of these drugs.

Several honorable members referred to the proposal in the Bill to prescribe standards by ministerial determination rather than by regulations. I think the honorable member for Grayndler (Mr. Daly) said that Opposition members had their doubts about this but were prepared to accept that it was necessary in the interests of the health of the Australian people. My honorable friend from Isaccs questioned the change in the procedure and expressed the wish that, if I replied to the debate, I indicate quite clearly why the Government thought it necessary. I did indicate this in my second reading speech, but I will reiterate a few of the points. First, ministerial orders are speedier than regulation. I think most honorable members, looking at the nutter objectively, will agree that there are occasions on which speedy determinations and speedy action are necessary in this field.

Secondly, the standards are of a highly technical nature. If any honorable gentleman has any doubt about this I will be glad to provide him with some examples of the type of determinations that are made. Some of them run to dozens of foolscap pages, are full of formulae and equations and things which are completely meaningless to me, and I suppose, to most honorable members who will see them. I think honorable members will agree when they look at these things that it would not be appropriate to place them in regulation form. The third point is that the number of orders will reach considerable proportions. The honorable member for Kingsford-Smith (Mr. Curtin), who is attempting to interject, does not seem to be interested in anything affecting my Department. He was bleating away this afternoon when the House was listening with rapt attention to my account of what we intended to do with garbage disposal at ports. He prevented honorable gentlemen from hearing what I had to say, and now he is trying to do the same thing in relation to this matter affecting the health of the nation. The third point that I wish to emphasise in explaining why the Government believes it is necessary to have orders or determinations rather than regulations is that the number of orders will reach considerable proportions. In fact, a loose-leaf official publication is being planned - so numerous are these orders likely to bein order to facilitate reference to the standards.

Fourthly, the content of the orders, being technical, it is considered better that they be drawn up by scientific experts rather than by the parliamentary draftsmen. Fifthly, a precedent for this has been accepted by the House in the National Health Act in respect of pharmaceutical benefits. The listing of pharmaceutical benefits under the Health Act is fixed by exactly the same means :is is proposed in relation to the determination of standards under this Act. Those are the principle reasons why it is necessary to provide these standards by determination or ministerial order rather than by regulation.

Some play was made by the honorable member for Grayndler and the honorable member for Hughes on the relation between prices and standards as if to suggest there were some connection between the two. The fact that the drug companies were making profits seemed to suggest to them that there was a necessity to fix standards under this legislation. It is not my intention tonight - because it does not come under this Bill - to discuss the profits of the drug companies or the prices charged by the drug companies, but I would make the point, which was made also by the honorable member for Isaacs, that quality control in drug manufacture, if it is undertaken conscientiously, well and efficiently is a very expensive process indeed. It is likely, therefore, that if the industry does play its part in ensuring safe standards, potent preparations and so on, that will add to the price. We find, for instance, that in the Commonwealth Serum Laboratories, which is a Commonwealth instrumentality, this principle applies. The quality control necessary to ensure high standards - which are a hallmark of CSX. products - is a complex and expensive process. Nevertheless we believe it to be necessary. I make that point to demonstrate that there is a connection between the price charged for drugs and the standards of those drugs, but in the opposite sense to that suggested by honorable gentlemen opposite.

There are one or two other matters on which I should like to comment. The honorable member for Isaacs spoke about industry co-operation. He said that he would have liked to see a reference in the Bill itself to consultation with the industry. All I can say is that in my second reading speech I described the process which is used for arriving at a determination of a standard under the Act. What I said made it clear that consultation with the industry, or that part of the industry concerned, is an integral part of the very earliest stages of the process which ultimately emerges in a determination. I said also in my second reading speech that it was the intention of the Government, under the regulations which provide a head of power in this matter, to set up an industry advisory committee to bring before the Government matters which appropriately come within the ambit of this Act and to advise the Go vernment on anything referred to it by the Minister. In addition I have given the industry an assurance that not only will that regulation be speedily made but that I will be only too glad to consider any representations that the industry may make as to what form this committee should take, its powers, composition and so on. I think that that must meet the point raised by the honorable member for Isaacs.

I just add that because of the complex nature of particular processes it would be quite impossible to arrive at an appropriate determination of a standard without consultation with the industry that manufactures the drug. The honorable member for Isaacs asked also why the original proposal to put industry representatives on the expert committee established under the Act was dropped. I understand that this was done a number of years ago because it just did not work; it was found to be impracticable. First, nobody can represent the whole industry in this expert process. Secondly, this is a highly competitive industry and information placed before these expert committees necessarily involves the revelation of information in respect of the processing and the constituents of drugs. This information might become known to competitors. For these reasons these committees did not meet at that stage, and it was only when it was decided to change their nature and not have industry representatives but independent experts in their own right as members of the committees that they began to work, and work most effectively. This is what will continue to happen under the present Act.

The honorable member for Hughes talked about random sampling and referred to the report of the Director-General of Health. He attempted to suggest that insufficient was being done in this respect. Maybe there is not enough being done. We would like to do more and we will do more as time goes on. However, the picture is not quite as bad as he suggested by the examples he gave when quoting from the report. For instance, the rate of rejection or failure rate quoted by him does not in any way represent what is likely to be found in a random sampling over the whole range of products. Necessarily, when we cannot examine everything, our attention is directed to those products where we are most likely to find some deficiency. In addition, the figures he cited might have suggested that the deficiencies represented something really dangerous. I am informed that this applied to a very small proportion only; the others tended to be minor matters. They were not the correct colour, for instance, or things of that sort. I just want to put in perspective the matter raised by the honorable gentleman because it could be taken to mean that a very high proportion of the products put on the Australian market were dangerous.

The honorable member for Wilmot (Mr. Duthie) talked about the capacity of the laboratory to handle imports. The point is that in respect of imports we do not rely only on the laboratory. We have very good information provided by the United States Food and Drug Administration, the Canadians and authorities in the United Kingdom. Information on which we can rely is speedily made available to us in the same way as we can, if necessary, make information available to them. There is a worldwide co-operative system in this respect. We do not necessarily have to test every product in our own -laboratories to ensure that we know something about it. Mr. Speaker, I believe that I have now dealt with most of the points raised by honorable members during the debate.

Question resolved in the affirmative.

Bill read a second time and committed pro forma; progress reported.

page 1487


Overseas Ownership of Australian Companies - Murray Valley Development - Coal Mining - Aircraft Noise Nuisance - “ Stay-Fresh “ Milk - Overseas Investment in Australia.

Motion (by Mr. Fairbairn) proposed -

That the House do now adjourn.


.- Mr. Speaker, here is the story of the takeover of a relatively small Australian company by an overseas firm. The Australian firm is Dowell Industries (Aust.) Pty. Ltd., a firm manufacturing in Preston, Victoria, aluminium window and other fittings for the building trade. While there are some big shareholders in this company, there are also many shareholders with very few shares. All the shareholders received an offer by Alcoa

Pty. Ltd. to take over their shares, which were bought at 50c and the present market value of which is 75c, at 79c a share. Alcoa is an overseas firm. The offer was accompanied by a recommendation from a big shareholder in Dowell Ltd. to the effect that the offer by Alcoa should be accepted.

A small shareholder, reluctant to be a party to the takeover by overseas investors, expressed his unwillingness to sell. He then received this letter from his broker -

Dear Mr. . . .

Apologies for delay in writing but have been waiting on some indication from the company as to the percentage of acceptance of the offer by the Dowell shareholders.

It would appear from reports in the paper this morning that Alcoa has the required 90 per cent, acceptance.

If this is so, and my Melbourne principals feel this is the case, then under the Companies Act all dissenting shareholders can be forced to sell out at the agreed price.

Unfortunately it appears that your only course is to fill in the acceptance form which I am returning thereby accepting the offer.

Yours sincerely,

S. W. Mockridge on behalf of John Coyle.

This Alcoa company receives taxation concessions as it is an American company. It also receives from the Victorian Government huge rebates in electricity charges. These rebates are estimated at about $6 million a year. The taxation concessions and electricity charge rebates help this company swallow up Australian companies by paying more than the market value for shares. It can, of course, take over all industries operating in aluminium in this country until it has a monopoly of all Australian industry trading in this metal. The letter to which I have referred states -

It would appear from a report in the paper this morning that Alcoa has the required 90 per cent, acceptance … all dissenting shareholders can be forced to sell out at the agreed price.

The report in the paper might or might not have been true, but such alleged report is used to get reluctant shareholders to sell their shares.

I suggest that there should be action by our Government to prevent overseas companies securing control of Australian industries with or without the assistance of Australian investors. The Governments of Australia are assisting in this case and in similar cases in promoting the foreign control and ownership of Australian industries. I contend that there should be some kind of action taken by the Government to ensure that even if only 10 per cent, of the shareholders choose to dissent and wish to preserve their ownership of the shares that they have bought in Australian companies to prevent them from going into the hands of foreign organisations, they should be enabled to do so.


.- I should like to refer tonight to the concept of an overall authority to control the Murray Valley and to replace the River Murray Commission as it now exists. I realise that this proposal will present great difficulties constitutionally and great difficulties practically. In the United States the Tennessee Valley Authority represented, perhaps, the first attempt to develop in unity the resources of a river valley. It is an idea which could work in hundreds of valleys throughout the world. It is an idea which is as old as nature. By this scheme the Authority perpetually marshals its forces to work together and to utilise the resources of water, light, power and soil which can change the whole valley’s face and its whole life. As I have said, the situation that applies in the Tennessee Valley could not be applied here because of certain factors, but I do suggest that the dissociation of the water in the river from is ultimate use leads in many cases to very wasteful methods.

The situation is highlighted this year by the fact that the use of water for irrigation purposes in the Murray Valley has been seriously curtailed. If the present dry season continues, there will be a tremendous further curtailment of water for this purpose next year. I therefore urge that the parties interested in this matter - the Governments of South Australia, Victoria and New South Wales, together with the Commonwealth Government, survey the position at the earliest possible date to sec whether some method of controlling things other than through the distribution of water in the Valley can be put into operatiton.

I repeat that while the use of water in the Valley for irrigation purposes has been curtailed, no survey has been made of possible dam sites further up the Murray. A preliminary investigation made at Devil’s

Grip, some 20 miles above the junction of the Murray River and the Swampy River, showed that a concrete and earth dam 230 feet high would impound 200,000 acre feet and that probably a much higher dam, with a storage in the region of 1,000,000 acre feet, could be built. This would add considerably to the regularity of flow of the Murray River. Additional water from the Snowy Mountains works will give some 800,000 acre feet to the Murray River and about 1,120,000 acre feet to the Murrumbidgee River. As a result, Victoria will receive an additional 400,000 acre feet and New South Wales 1,500,000 acre feet. The construction of smaller dams above the site I have referred to is also possible. If this were carried to fulfilment, it would avoid to a great extent any possibility of a recurrence of the present situation.

We have heard much in this House and elsewhere about northern development. I support northern development, but I do not think we should put it out of perspective. There is such a thing as balanced development. Tn my considered opinion, it would be a very great misake to leave half completed something that we could complete and uproot everything to go elsewhere. I need hardly reiterate the advantages that accrue from irrigation. One-eighth of Australia’s total pastoral and agricultural production and one-quarter of our gross agricultural product comes from irrigated land. Of this, 50 per cent, comes from Victoria, 30 per cent, from New South Wales and 20 per cent, from Queensland. The Murrumbidgee Irrigation Area produces each week the equivalent of two days’ foodstuffs for Sydney, or 11,000 tons. These facts emphasise the need to examine all ways of making the best possible use of water - absolute use - in those areas which are already proven and which are already producing.

It is one thing to talk about damming the water in a river, but a great many other things must be done after that. The construction of the dam is only the first step. It is necessary also to consider means of distributing the water, the effect that the dam will have on soil erosion and a multitude of other things. I feel that the time is opportune to survey the possibilities of the scheme I have suggested, although I fully realise the practical difficulties involved. For instance, one practical difficulty that comes to mind immediately when considering the setting up of a Murray Valley Authority similar to the Tennessee Valley Authority is that the Tennessee Valley Authority has control of all subsidiary streams, whereas most of the subsidiary streams that feed the Murray River flow from Victoria and are already harnessed by the Victorian Government. Therefore, there would have to be some modification of the concept that has been put into operation in the Tennessee Valley. However, I feel that nothing but good could accrue from an examination of the situation with a view to the establishment of greater co-operation on what is done with water. At present, in a great many cases water is wasted and misused. I urge the Minister for National Development to see whether it would be- possible to give effect to the concept of a Murray River Authority rather than that of a River Murray Commission.


.- I rise to draw the attention of the House to the writing of another chapter in the bloody history of the coalmining industry of New South Wales. In November last, at Bulli Colliery, owned by Australian Iron and Steel Ltd., a major steel producing firm, four men were killed. They died as the result of a fire, due to the combustion of certain gas exuded from the coal deposits. A statutory inquiry under the terms of the State Coal Mines Regulation Act was held by Judge Goran, a District Court Judge, at the instance of the State Minister for Mines and the Joint Coal Board.

The coal miner daily goes into the bowels of the earth at the peril of his life so that the rest of the Australian community can live in comfort and enjoy heat, fuel and power. Today, the men at 23 collieries within my constituency - which is a major coal producing centre of Australia, producing some 8,000,000 tons a year - chose their traditional method of protesting and of drawing the attention of both the State and Federal Governments to their grievances. In addition to the 23 collieries, four cokeworks also ceased work for a period of 24 hours. This was in accordance with a unanimous resolution of the District Board of Management. This is a matter that concerns me very gravely because, in the course of the protest meeting held in Wol longong today and the demonstration which followed, certain resolutions were passed, with which I fully agree, but which could have the result of impairing the production of coal and causing further trouble within the industry.

The history of the coal mining industry is a turbulent one. The Coal Industry Act was passed by the Chifley Government for the purpose of securing Commonwealth co-operation. I am indebted to the Minister for National Development (Mr. Fairbairn) for being present tonight to hear my complaint, and I ask him for his utmost assistance. Judge Goran conducted an inquiry which lasted for six weeks. It was a most exhaustive inquiry and the terms of his findings were particularly scathing. For example, he referred to the cavalier attitude of the mine management and certain of its officers towards the enforcement of certain safety regulations.

Some 80 years ago, the Bulli Colliery was the scene of a catastrophe in which, as the result of an explosion of gas, 80 men lost their lives. Also within my constituency, at Mount Kembla colliery, 90 men lost their lives in 1901. Whole cemeteries have been filled with fathers and sons who have paid the supreme penalty so that other people might enjoy the coal they have produced.

Today with mechanised methods of production new elements of danger are entering the coal industry. We have a need for coal. The terms of the legislation give to the Minister for National Development, through the Joint Coal Board, certain powers to control safe working. These controls are exercised, it is true, subject to New South Wales legislation- the Coal Mines Regulation Act. With modern methods of coal extraction - the use of coal cutting machines in particular - and with the general speed up in production new danger factors have been introduced. The terms of the inquiry were very wide and the evidence disclosed a most tragic set of circumstances that brought tears to the eyes of every person in the industry, because the men who died died under particularly heroic circumstances which enlisted the heartfelt sympathy of every person within my area.

It is necessary that a new approach should be made to the problems of gas in coal mines. With coal cutting machines sparks occur. It is true that water is sprayed on the coal face and that this minimises the risk. With new methods of production it is necessary for electric traction to be introduced and for electric power to be used on a scale not previously contemplated. The normal safeguards that the traditional pick miner had have gone into the discard. His eyes, and above all his ears, were very important. He could listen to the creaking of the roof and he knew almost by instinct what the dangers were, but today, with the roar and thunder of the coal cutting machine, that has gone into the discard. He relies strictly on the efficiency of the machine and, above all, on the stringency of the administration of safe working regulations by the management.

In the particular case I am discussing the management was recreant to its trust and resolutions have been passed requiring that a prosecution be instituted by the State Minister for Mines. This is a matter, of course, for the State Minister but by the same token specific recommendations were made. I will not burden the House with them at present, but they will be available on record for the Minister for National Development and I ask that they be fully implemented, because today we need coal production more than ever. Coal is still a vital part of our economic life and I do not want to see any interruption of supply. The problems do not rest merely with the old Bulli colliery. There is also the Kemeira colliery and the Corrimal colliery. Australian Iron and Steel Pty. Ltd. owns approximately two thirds of the coal output within my constituency. A few weeks ago there were two further deaths at the Corrimal colliery due to a fall of stone from the roof. The Management Board of the Southern Miners Federation has passed a resolution that unless the north western sector of that colliery can be properly controlled with regard to its roof and the dangers that are there, it will be forced to take certain action that could result in the closing of that section. In fact the resolution is so adamant in its terms as passed today that the Board is prepared to go to any lengths to ensure that the safety of the men is fully safeguarded.

At the Kemeira colliery where we have certain sections being worked by what are called the long wall methods of production there is further trouble and the men are complaining again of the dust hazards and consequent fire and explosion hazards associated with it. There is a very real need for intervention on the part of the Minister for National Development - not officious intervention but intervention in the best interests and the safety of the men concerned and of coal production for the Australian community. From my own experience - and I worked for many years in the office of the solicitors for the Miners Federation - I would say that no men pay a greater price in terms of occupational hazards and in terms of health than the coal miners. I can recall that 30 years ago one third of the coal miners employed within the Illawarra district were disabled by some form of industrial accident. There are at least 700 men in that district today who are suffering from pneumoconiosis, which is a special form of dust in the lungs associated with the coal industry.

Coal miners, by tradition, work together and they hit together. They are determined that they will secure the introduction of the most complete methods of safety and safe working regulations. They are entitled to no less, because there is no greater asset to the average worker than his health and his security and there is no miner today who says goodbye to his family in the morning who can be sure that he will return home at night. This is the tragedy of the coal mining industry, and the very least that we can expect from the most powerful organisation in Australia is that it will co-operate in seeing that the safe working regulations already in existence are fully observed and that such additional precautions as may be required are introduced.

St. George

– I draw attention to a particular aspect of civil aviation - the noise emanating from aircraft and its effect on the citizens living in areas surrounding the major airports, particularly those citizens whose homes are located directly under or in the vicinty of the flight paths. I was hoping that the Minister for Civil Aviation (Mr. Swartz) would be in the House tonight because I am appealing to him to form a committee of inquiry on this subject, so concerned am I at the trends in this particular curse. At the very least he might make a statement to the House outlining what has been done in Australia by way of research on this problem. What, for instance, has his Department in mind to help abate this nuisance? The interruption to telephone conversations and personal conversations, television programmes and so forth are minor compared to the shattering impact of screaming jets on the nerves of the young and old, on the concentration of school students and on the worship of all people.

The vibration transmitted to homes and buildings by low flying aircraft in the vicinity of major airports has created the problem of damage to homes - cracks to windows and ceilings, and damage to roofs, lights and other minor but valuable accessories and fittings. By virtue of its present position in the civil aviation network as Australia’s major national and international airport, Sydney (Kingsford-Smith) Airport is the worst affected. But honorable members associated with Melbourne, Brisbane, Perth and other capital cities would do well to take heed of this noise menace as their airports expand and take a larger volume of traffic with consequent larger and noisier aircraft. This problem is not confined to Sydney, of course. Many large cities throughout the world suffer similar inconvenience. With this thought in mind I am prompted to ask: What steps are in progress by aircraft manufacturers, airline operators and governments throughout the world to alleviate the noise problem? Is any extensive research work in process, particularly in those countries where a large volume of aircraft is produced - and I mention the United Kingdom, the United States of America, Russia, France and Italy - and also in Australia? Are we doing any actual research work here?

I advert to the problem at its worst, as we see it in the Australian context, that is, at the Kingsford-Smith Airport. There are two runways with four approach or takeoff directions - north, south, east and west. The western and northern approaches are over heavily populated residential areas, the eastern approach over a somewhat less thickly populated area and the southern approach over Botany Bay, the parklands of Kurnell Peninsula and the Pacific Ocean. With this geographical and developmental layout it is logical that the maximum number of departing and arriving aircraft should be despatched or received per medium of the southern runway over Botany Bay, Airline economics, saving of mileage, inconvenience of any sort and expense of any nature should have no say in varying such a flight plan. Safety only should be the overriding factor, if this appears to be impeded by such a plan.

A petition is to come before the Parliament shortly that has been signed by thousands of people in the St. George area alone, demanding that the Government act, and pleading with the Government to act, through the Department of Civil Aviation to lessen the impact of this curse of modern transportation. It is common practice for members and disinterested persons to dismiss the problem as one of the necessary burdens of progress. Sir, this is not necessarily so. European courts of law have rejected this submission and have held the airlines and the governments concerned responsible for the compensation of residents who have been affected seriously by aircraft noise.

The magic of aircraft development and the intoxicating expenditure involved capture headlines continuously. But we hear little of what is being spent or done on the question of noise suppression. I believe that the time has come to call a halt to the airline companies on this noise problem in the same manner as they were warned to confine their configurations of new massive aircraft to the limit of existing runway lengths and oilier airport facilities. If the situation deteriorates much further, one might visualise governments finding it necessary to purchase expensive rights of way in the same manner as highways and railways. At all events, we must be dangerously close to the position where the Government should consider the payment of subsidies to citizens to enable them to soundproof their homes and also subsidies for loss of value and rate rebates as is done in the United Kingdom and some other parts of the world.

It is not proposed that the noise can be eliminated completely. The Sydney (KingsfordSmith) Airport is located where it is, and planes must come from all directions when safety and weather conditions rule that there is no alternative. But why should the people be forced to absorb unnecessary punishment when it is patently obvious that it could be avoided to some degree? To give an example, I ask: Why must the lighter aircraft, such as Friendships, Viscounts and Electras, be permitted to drag their noise for unnecessary miles over rooftops on the regular flight paths in good weather? lt occurs to me to be eminently practicable to establish a herringbone system of beacons located in between the cardinal points of the compass upon which the flight paths are now located to enable aircraft to join the main flight path nearer the airport boundary, thus eliminating a measure of the noise from the outlying and intermediate areas.

For some years the idea has been propounded that the best part of the noise problem of Rockdale-Bexley would disappear into Botany Bay when the runway extension was completed at Sydney (Kingsford-Smith) Airport. The sincerity behind these pronouncements has long been subject to a large degree of scepticism. 1 believe that the views of the sceptics gained substantial support with the announcement recently by the Minister for Civil Aviation that his Department is in the process of constructing, not proposing, a major mountain top radio navigation aid at Bindook in the Blue Mountains 55 miles west of Sydney. The Minister has stated that, in addition to providing track guidance, this installation will act as a marshalling point for all aircraft operating the southern and western air routes into Sydney.

Sir, one can only deduce that it is the intention of the Department of Civil Aviation to continue to drag all and sundry aircraft over the western and southern suburbs of Sydney not only now but also in the long term future. I submit that the public can be excused if it gains the impression that the Department is not very sincere in its protestations regarding the accusations of the limited use proposed for the new runway extension into Botany Bay. In support of the sceptics, and in addition to the Bindook argument, it appears obvious that whilst the major flight path beacons from Melbourne to Sydney and from Brisbane to Sydney remain in their present locations, very little encouragement is afforded to pilots and ground staff to use the Botany Bay ingress and egress. A relocation of beacon systems on these main routes or regulations to insist on greater use of the routes over the open bushlands and coastlines such as Melbourne, Canberra, Wollongong, Kurnell and then into Kingsford-Smith is urgently required. Some cost is involved undoubtedly, but this cost is easily comparable with the benefits to citizens who do not use air travel but who are forced to carry this burden of the air traveller. The cost is comparable also with that involved and incurred in Perth and Melbourne where this noise problem was not excluded from consideration when the airports were relocated.

Some cost to the airline companies is involved also. These proposals would involve greater mileage for the aircraft. It is realised that even four miles or five miles extra per flight, multiplied by the number of flights per year, adds up to a sizable fuel account when associated with the rate of fuel consumption of the large jets oi’ today. Some indication of these costs may be gained from this information. If the planned new terminal for Sydney (Kingsford-Smith) Airport were to be located in the south east corner of the airfield instead of the north west corner as is planned, the extra fuel cost to the domestic airlines for taxiing requirements would have been of the order of Si million per annum. However, an airline company is in a position to pass these costs on to the air traveller. There is no reason why the local residents should carry this unnecessary burden when the charge of an extra few shillings on each aircraft ticket could afford substantial relief.

Mr. Speaker, time does not allow me to develop my argument fully. It was my intention to comment on a number of other points such as policing international aircraft, the use of noise suppressors and the research work that is or is not going on in this country which, added to my earlier observation, support the argument that urgent consideration should be given by the Government to establish a more sophisticated flight plan for the airport on the herringbone principle, relocating the main beacon systems from other Stares, more rigid policing of international aircraft and expeditious and widening research into the noise problem. Finally, I ask the Minister again for the appointment of a committee of inquiry on these points. At the very least, I ask the Minister to make a statement in the House in order that the problem may be ventilated and action determined.


– Order! The honorable member’s time has expired.

Minister for Civil Aviation · Darling Downs · LP

– I wish to make a brief comment in relation to this matter. In view of the importance of the subject, I intend to ask the House next week for leave to make a statement. There will be the opportunity at a later date, I hope, to debate the statement if necessary. I wish to indicate exactly what is being done at the present time to overcome these problems and to show the interest that is really being taken in them.


.- If the Minister for Civil Aviation (Mr. Swartz) can give an assurance that there will be a debate on his statement, I will not speak now. I will wait for his statement.

Mr Swartz:

– I understand that 1 will move that the House take note of the paper. 1 would not guarantee that the debate will be held during this session, but it will be at a later stage.


– In that case, I will say a word or two on this matter now. I agree with all the points raised by the honorable member for St. George (Mr. Bosman). We have had this trouble for many, many years. I have attended meetings even as far distant as Rockdale which, 1 think, is in the electorate of the honorable member for St. George, and every council in the area has protested to me about this noise. In addition to the loss of property value, the noise level must be very nerve wracking to people who are living within a few hundred yards of the take-off area on the Mascot and St. Peters sides particularly. As a matter of fact, I know of many of my former constituents who, to get away from the noise, have sold their homes and have had to accept less than the market value of their homes in order to get away from the area. I suppose most honorable members have heard the engines of the big jets revving on tarmacs when they are ready to take off. How would honorable members like to listen to that noise all day? Would honorable members like to listen to it all day? This is what the people living in the Mascot, St. Peter’s and no doubt the St. George areas have to listen to all their lives. 1 do not blame them for complaining.

There is one other matter on which I must lodge a complaint. I live about four miles from the Sydney airport. If the wind happens to be blowing in a southerly direction and the engines of jet aircraft are being tuned, no doubt for maintenance purposes, the noise can be heard on a Sunday morning, for instance, four miles away. Just imagine what the people living within half a mile of the airport must have to put up with. I know that if the honorable member for Mallee (Mr. Turnbull) had such a big airport in his electorate, he would be the first one to get up on behalf of his constituents and scream about the noise. The honorable member never stops screaming about his constituents. But if any other honorable member brings up a matter concerning his constituents, the honorable member for Mallee thinks that that honorable member just does not have a case. I have one of the sweetest mothers-in-law in Australia, and from where she lives at Mascot she can see the pilot of an aircraft, the crew and all the passengers immediately after take-off. She has to put up with this noise for the rest of her life. She cannot get out of the place she is living in because she cannot get the value of it even if she was in a position to sell it.

It is all very well for honorable members opposite to laugh. This may be a laughing matter to them but it certainly is not to the people who are affected by this noise. They have to put up with it all the year round, and I believe the more protests they make about this noise the better off they will be, because somebody in the long run will have to take some notice. Admittedly we cannot halt progress but surely, as the honorable member for St. George (Mr Bosman) has said, something could be done to insulate homes against this noise nuisance.

I sometimes go to the St. Peters Town Hall, as does the honorable member for Grayndler (Mr. Daly), to address branch meetings or other gatherings, and when aircraft are taking off or approaching the airport everyone has to stop talking. People who attend dances in that hall cannot hear the music when aircraft are overhead. I am giving honorable members the facts. If the honorable member for Kooyong (Mr. Peacock) thinks I am exaggerating I will take him out to this area and he can find out for himself. How many jets do you have approaching the Melbourne airport at Essendon. Just come over to the KingsfordSmith Airport and listen to the noise coming from there all the year round.

I support the attitude of the honorable member for St. George. Those other poor old fellows from Gunn’s Gully would see an aeroplane only once every twelve months. If they lived in my area or in the St. George electorate they would be among the first to squeak about this matter every night of the week.


.- I want to develop a theme I raised this morning with the Minister for Trade and Industry (Mr. EcEwen). I refer to “StayFresh” milk. 1 know the Parliament will be very interested in this subject at this time of night. This is a milk which is subjected to an ultra-high temperature process to bring about long-term pasteurisation. The effect of this is to sterilise the milk to such a degree that it can stay fresh for three and a half months. I suggest to all those honorable members who are interjecting that a drink of this milk would do them the world of good. 1 can tell the honorable member for St. George (Mr. Bosman), for instance, that I am having three pints flown out from England on a Qantas jet and that he can be the first to taste the new milk.

The process has been developed by the Express Dairy Company in England. In Australia the Queensland United Foods company is going in for this kind of milk and a company in Tasmania has also announced its intention to do so. It will have far-reaching consequences for the dairying industry in both the short term and the long term. The Australian dairying industry is a very large industry. About 133,000 farms have milking cows on them and they produce 1,471 million gallons a year. The trouble with the dairying industry in the past has been its reliance on the butter market. The annual production of butter has been 205,000 tons, of which 110,000 tons has been sold on the domestic market and 91,000 tons overseas. Of the 4 million gallons of milk produced daily only 927,000 gallons are sold on the domestic Australian market.

Imagine the change that this new milk will bring for the milkie who comes to the house of the honorable member for Denison (Mr. Gibson) in Tasmania at half past four every morning, waking the honorable member from his sleep with the rattle of milk bottles. What will happen in the future? The milkman will call only once every couple of months, and he will call at his leisure in the afternoon. He will not need to come at all hours of the night. There will be changes in deliveries. The beauty of this “Stay-Fresh” milk is that it does not require refrigeration. If Mum leaves the milk out on the sideboard all night, when Adrian gets up in the morning the milk will still be fresh when he wants his cup of tea. This milk will make changes in the New South Wales industry in particular. The highly protected area of the milk zone around Sydney will have a few sudden shocks coming to it when “ Stay-Fresh “ milk comes on the market. Even the dairy farmers will be better off because the cows will be able to go back to their normal seasonal routine. They will not have to come in and calve out of season. It will be possible to keep the milk right through the winter.

Let me come to a point of some substance: As we know, there are great areas of land with hundreds of millions of people who are starving. The best thing that we could do to produce bonny babies there would be to supply some of this “ StayFresh” milk to those people. India has about 450 million people. Pakistan has about 100 million people. Indonesia has about 1 1 0 million people. I give those three examples. What a boon a nice pint of “ StayFresh “ milk every morning would be to the people in the poverty stricken areas of those countries. In the past a part has been played in this field by reconstituted milk. Casein and skim milk powders have been used wilh butter oil. Let me turn to one particular example - Japan. The average consumption of milk in that country is 2 oz. per capita per annum, compared with 26 gallons per capita per annum in Australia and 40-odd gallons per capita per annum in New Zealand. If we could get a means of conveying milk, unrefrigerated but fully sterilised, in bulk tankers to places such as Japan, which has a rising standard of living, I am quite sure that we would be able to put millions of gallons of fresh milk on to the Japanese market and sell it at a reasonable price.

What I am doing in raising this matter is asking the Government to consider encouraging the Australian Dairy Produce Board and the Commonwealth Scientific and Industrial Research Organisation to investigate the possibilities of using bulk tankers to transport this milk. The whole point about this milk is that it must remain completely sterilised. One of the matters that would have to be investigated is how to transport this milk in bulk tankers to a country such as Japan. I suggest that a polythene bag might be placed inside an oil tanker, and then it could be filled up with milk and go to Japan. The cost of transportation at the rate of $4,000 a day for a 40,000 gallon tanker works out at about 1 cent a gallon. So the freight cost is very moderate. At the other end I envisage using bulk tanks on the shore in the same way as the Esso and Shell companies use bulk fuel tanks. The milk could be pumped straight into those tanks and then into milk delivery wagons for domestic deliveries.

I believe that this would divert a tremendous amount of butter fat from being made into butter. I believe that it would give a very great lift to the dairy industry. All that I want to see is the Government and the National Parliament taking note of what is happening in this “ Stay-Fresh “ milk field and giving some form of encouragement to the Australian Dairy Produce Board and the C.S.I.R.O. to investigate something which I. believe will give a great lift to the dairy industry.


Mr. Speaker, I suppose that it is a little too early yet to be certain of the effects of the recent United Kingdom Budget on Australia, but it is not too early to consider the position that may arise. Certainly, the British Budget underlines our unhealthy dependence on overseas investment. If honorable members look at the figures, they will see that in the last five years our deficit on current account has totalled a little more than $2,000 million. This is the amount that we have overspent. During the same period we have had foreign investment totalling about £2,400 million. So our overseas balances, instead of going down, have risen by some $400 million and now stand at about $1,300 million. The striking fact that we have to face is that as our trade is run ning at present we are very dependent on foreign investment, and this dependence is continuing. If honorable members look at the figures for the first nine months of the current financial year, they will see that in that period we have had a deficit of $700 million, which has been partly balanced by private capital inflow of $558 million and official capital inflow of £74 million. The balancing item of $68 million represents monetary movements in our net overseas balances. So we are still very dependent on overseas investment. If anything happens in Great Britain to interrupt or sensibly diminish this flow of investment, considerable embarrassment will be caused in Australia.

I make the reservation, Sir, that it is perhaps too early yet to know exactly what the impact of the British Budget will be. The recorded inflow of capital from Britain in the last five years has totalled approximately $1,000 million. The real inflow is probably rather more - perhaps another $250 million. We are receiving something over $200 million a year from Great Britain. That may not be the exact figure, but the flow is of that order. We shall be embarrassed by any reduction in this flow. What is to happen? We can think of several courses of action. The first and most sensible is to get our trade more into balance so that we shall no longer be dependent on this capital inflow. This means, I am certain, some kind of quick reduction in imports. This is now overdue. It should have been brought about before because of the way in which we have been over-running our earnings on current account. This first course of action means also that we must step up, not slow down, our internal activity and our internal development. As things stand, it is no longer enough to have full employment. In order to get the production necessary to maintain our living standards, we must look for a good deal of overtime in addition to full employment. A policy that does not provide for this does not measure up to our requirements.

I know that at present there is some tendency to look for other capital from abroad to come in in place of British capital if the inflow from the United Kingdom is cut back. This is a natural palliative, but I suggest that we ought not to rely on it, because capital from sources other than Great Britain looks for a return somewhat higher than British investors have been accustomed to. I understand that the Socialist Chancellor of the Exchequer in the United Kingdom suggested last night that British capital invested in Australia ought to earn 33 per cent. This is a good Labour sort of view. But I am not certain that it is a practicable one. However, it is certain that capital coming from countries other than Great Britain tends to prefer key positions in the economy. We do not want our time of national need for foreign investment to be used as an opportunity for carpet bagging. I hope that the Government also will keep its eye on this. With $1,300 million of dollar funds, and our second line reserves in addition, we have a good deal of room to manoeuvre and we shall not be in distress if these balances decline considerably while we are re-adjusting and substituting local production for imports.

Particularly in the mineral field, the oil field and the base and ferrous metal fields we are expanding our production to improve our balance of trade. But we have still to look at our position vis-a-vis Great Britain. If honorable members will look at the figures which have been compiled they will see that in the last five years our balance on current account with Great Britain was adverse to the extent of approximately $1,500 million, which is considerably more than the capital inflow. But if it is necessary because of what is done in Great Britain - it is their right to do what they want with their own capital - for us to think of cutting down our total imports, it will be necessary to look particularly to redressing the balance on current account with Great Britain. It may not be palatable to reduce the present extent of British tariff preference or to do other things of that character. We would not take such action lightly or wantonly. But if, by reason of this cutting down of the investment flow from Great Britain we are put in temporary stringency and it is necessary to reduce our imports, then there can be little doubt that the major impact will have to fall on our imports from Great Britain.

I think it might be represented - I have no doubt that the Government is currently representing - to the British Chancellor of the Exchequer that if the flow of investment is cut down and if our total balance with Great Britain on capital and import accounts together becomes even more adverse than it has been in the past five years, we will have to make certain trade adjustments which will keep Australia’s accounts in a somewhat better position. Of course we do not in any way deny Great Britain’s rights to do what it likes with its own internal economy, but Australia must, for her own advantage and in the same way, claim the same right. If we have t’o make readjustments consequent upon what Great Britain has done I am afraid that the impact may have to fall very largely on British trade. I think these things are better said at the present moment, while the situation is still a little fluid, and when we do not quite know how far the British Chancellor of the Exchequer means to go in implementing the policy he has announced.

Mr. BEATON (Bendigo) [11.581.- Mr. Speaker-

Motion (by Mr. Fairbairn) agreed to -

That the question be now put.

Original question resolved in the affirmative.

House adjourned at 11.59 p.m.

page 1497


The following answers to questions upon notice were circulated -

Newspaper Correspondents in Asia. (Question No. 1669.)

Mr Hayden:

n asked the Minister for External Affairs, upon notice -

  1. Has his Department any information as to which Australian newspapers maintain full-time correspondents in Asia?
  2. If so, can he state where these correspondents are stationed, how many are stationed at each locality, and whether they are able with any degree of fluency to speak, read or write any Asia languages?
  3. If it is felt that there is a paucity of full-time Australian correspondents in Asia, and in order that the Australian public may be provided with news reports prepared primarily, and not incidentally, for Australian consumption, will the Government consider subsidising, without conditions imposed, the setting up of many more offices in Asian countries for full-time Australian correspondents?
Mr Hasluck:

– The answers to the honorable member’s questions are as follows -

  1. and 2. These are not matters on which the Government has comprehensive information.
  2. The location of representatives of newspapers overseas, including posts in Asia, is a matter for the managements of the newspapers concerned.

Shipping. (Question No. 1707.)

Mr Webb:

b asked the Minister for

Shipping and Transport, upon notice -

  1. Because of the limitation of power over shipping in the Australian Constitution, is there the possibility of orders being made under the Imperial Merchant Shipping Act 1894, applying shipping regulations to Australian States?
  2. If so, does this emphasise the need for an amendment of the Constitution giving the Commonwealth Parliament more extensive power over shipping?
  3. Would more extensive powers place the Commonwealth in a better position to implement shipping conventions, treaties and agreements?
  4. If so, will the Government initiate the necessary legislation for the purpose of amending the Constitution?
Mr Freeth:
Minister for Shipping and Transport · FORREST, WESTERN AUSTRALIA · LP

– The answers to the honorable member’s questions are as follows -

  1. It is impossible to answer this question without expression of opinion on questions of law. 2., 3. and 4. The Government does not contemplate seeking any amendment of the Constitution in relation to matters referred to in these questions.

Vietnam. (Question No. 1723.)

Mr Hayden:

n asked the Minister for External Affairs, upon notice -

  1. Did he state, when addressing a Moral Rearmament Conference at Canberra on 24th January 1966, that we have to try consistently to maintain our original faith and scrupulously follow the principles and procedures to which we have subscribed in the United Nations Charter?
  2. If so, why has the Government not sought to (a) refer the Vietnam war to the Security Council of the United Nations for action by that body in accordance with the obligations of the United Nations Charter, (b) have the primacy of this Charter recognized by S.E.A.T.O. signatories in accordance with the provisions of the S.E.A.T.O. Treaty if the Government still maintains that we are involved in Vietnam under this Treaty, and (c) arrange United Nations participation in Vietnam with the aim of terminating the war?
Mr Hasluck:

– The answers to the honorable member’s questions are as follows -

  1. Yes. 2. (a) and (c) The Security Council is seised of the Vietnam problem following an initiative by the United States in February 1966, to place the question on the Council’s Agenda. On this occasion, and on earlier occasions when attempts were made by the Secretary-General of the United Nations and by the United Slates Government to involve the United Nations in the problem, North Vietnam and Communist China declared that the United Nations has no competence in this matter.

    1. The Manila Treaty is consistent with, and reaffirms, the purposes and principles of the United Nations Charter. Military assistance given to the Government of the Republic of Vietnam is for the purpose of assisting it to exercise effectively its right of self-defence, a right which is entirely consistent with the purposes of the United Nations.

Rural Finance.

Mr McMahon:

n. - On 31st March, the honorable member for Bass (Mr. Barnard) asked me a question without notice about the Commonwealth Development Bank’s lending terms and conditions.

The Managing Director of the Commonwealth Banking Corporation, which controls the Commonwealth Development Bank, has assured me that the terms and conditions of Development Bank loans are neither harsh nor unreasonable. It is thepractice of the Bank to seek repayments on a scale that can be met by the borrower without strain, based on the Bank’s analysis of his net income and overall financial obligations. When a loan is made to finance a developmental programme that will not add to income immediately, the Bank is quite ready, if the circumstances of the borrower so require, to allow the loan to stand free of repayments of principal for a suitable period of years. The Bank makes any loans with repayment arrangements extending over more than 20 years.

The Managing Director has also assured me that, in accordance with the provisions of section 73 (1) of the Commonwealth Banks Act 1959-1965, the Commonwealth Development Bank, in deciding whether or not to approve a loan application, has regard primarily to the applicant’s prospects of success. The judgment of prospects of success is always made by the Bank without regard to the security offered. If it is decided that prospects of success are acceptable, the security aspect of the proposition is then examined on the basis that, though important, it is a secondary consideration. The Bank, of course, aims to secure the best security available in the circumstances of the particular case, but not to the point of seeking security unnecessarily. The Bank does not have fixed lending margins against land or other property, and in many instances it relies on security that would not be accepted by ot:’er lenders as primary cover for term loans.

I am assured by the Managing Director that the Development Bank always adopts a most sympathetic attitude towards an applicant’s requirements and, if they cannot be met, endeavours to formulate a basis on which a worthwhile measure of assistance can be provided. When a proposal is declined, it is almost invariably the Bank’s conclusion that the applicant does not have reasonable prospects of servicing his debts over an acceptable period.

Rural Finance.

Mr McMahon:

n. - On 10th March, the honorable member for Herbert (Mr. Harding) asked me a question without notice about loans by the trading banks to north Queensland cane growers for carryon purposes.

As promised, 1 duly asked the Reserve Bank to make inquiries into the matter. The Bank has advised that there is no information to support a suggestion that the trading banks are discriminating against cane farmers in north Queensland by refusing to provide essential carry-on finance. The Government’s policy of according preferred treatment in lending to rural and other export producers is well understood by the trading banks, and the banks have assured the Reserve Bank that they are giving effect to that policy.

With regard to the position of droughtaffected cane growers and other primary producers who are unable to meet the banks’ security requirements, the Queensland Government is operating a scheme of concessional loans for essential carry-on purposes, and expenditure by the State under that scheme is included in the arrangements between the Commonwealth and the State for the provision of Commonwealth financial assistance to the State in respect of the cost of drought relief measures.

The information I gave the House on 27th April in reply to a question by the honorable member for Moreton (Mr. Killen) is also relevant to the matter raised by the honorable member for Herbert.

Overseas Investment in Australia.

Mr McMahon:

– On 10th March, the honorable member for Lyne (Mr. Lucock) asked me a question without notice about the extent to which overseas-controlled enterprises operating in this country have financed their capital requirements by borrowing from Australian banks.

I am advised that the statistical information available is not such as to enable a specific answer to be provided to the question.

By way of general background, I invite attention to a statement made in the House on 13th May 1965, in which the then Treasurer dealt at some length with the question of overseas-controlled enterprises wishing to raise money in Australia to finance their activities here and indicated the Government’s general attitude on loans to such enterprises. (See “Hansard” of 13th May 1965, pp. 1,525 and 1,526).

As was indicated in that statement, the Government has, at various times, made it plain that it welcomes arrangements which provide for Australian equity participation in undertakings that would otherwise be financed wholly by overseas capital. Local borrowings by overseas-controlled enterprises, however, are different, in certain respects, from snare issues by such bodies. Although it is not possible to lay down detailed criteria as to what financing arrangements the Government would regard as acceptable in each case, the statement provides broad guidance in the matter.

Within these guidelines, Australian banks are free to lend to overseas-controlled organisations in Australia, subject to general credit policy considerations, where the criteria of acceptability indicated by the Government are met. Most such operations involve no change from past practice and continue banking relationships which, in many cases, have existed for many years. Banking arrangements of this type cover a large range of overseas companies operating in diverse industries in Australia. The banks are not required to report or specially classify such loans.

Where, however, interests concerned have any doubt as to whether particular borrowing arrangements they have in view would be conformable with the Government viewpoint, they should consult generally with the Reserve Bank. There has been a number of such consultations with the Reserve Bank. These consultations have been conducted in confidence and details of the industries concerned, therefore, cannot be disclosed.

Decimal Currency.

Mr McMahon:

n. - On 24th March the honorable member for Riverina, (Mr. Armstrong) asked me a question without notice about the designs of the $10 and $2 notes. 1 have referred the honorable member’s comments to the Reserve Bank, which is responsible for the note issue. The Reserve Bank has pointed out that, despite a similarity in the lower sections of portraits on the fronts of the $10 and $2 notes, the overall designs are completely different. The Reserve Bank expects that, particularly as the public becomes increasingly familiar with the distinctive features of the notes, there will not in practice be difficulty in distinguishing between them, provided the normal care is exercised in handling the notes.

Loans. (Question No. 1646.)

Dr Patterson:

n asked the Treasurer, upon notice -

  1. What is the total amount of loans made by the Development Bank to areas north of the 26th parallel in Queensland, and what is the broad geographical location of these loans?
  2. What is the total amount of loans made to sugar farmers north of the 26th parallel to finance expansionary programmes?
  3. How many brigalow farmers in the “ Brigalow Scheme “ have been supported by the Bank, and how many have had requests for assistance refused?
  4. What are the reasons for the Bank’s refusal to assist brigalow farmers in this development scheme?
Mr McMahon:

– The Commonwealth Banking Corporation has provided the following answers to the honorable member’s questions -

  1. The Commonwealth Development Bank does not maintain statistics that accurately reflect parallels of latitude. It he; estimated, however, that loans approved in Queensland in areas north of the 26th parallel would total approximately $17 million. The loans are well spread geographically and no particular area predominates.
  2. The total amount of loans made by the Development Bank to sugar farmers north of the 26th parallel to finance developmental programmes is assessed at more than $3 million.
  3. In August 1965, the Department of Lands in Queensland published a resume of the Fitzroy Basin Brigalow Land Development Scheme. This indicated that at that time a total of 115 leases were current and 18 blocks had been sold at auction purchase freehold. Hie number of settlers who have approached the Development Bank for finance is 26. Loans for nine of these have been approved and seventeen have been declined.
  4. In determining whether or not it shall provide financial assistance, the Development Bank has regard primarily to the prospects of the applicant’s operations becoming or continuing to be successful. There are many factors which have a bearing on prospects of success in farming, including the experience of the farmer, his industry and management qualities, and the intended enterprise pattern. In the economic sense, the equity of the applicant and the relationship it bears to the total investment in the enterprise is naturally of great importance. In relation to settlers in the Brigalow Scheme, any one or a combination of these factors could have led to a particular proposal being declined.

Minting of Australian Coins in India. (Question No. 1641.)

Mr Webb:

b asked the Treasurer, upon notice -

  1. Was India given the contract to mint 1942 and 1943 Australian pennies and half-pennies?
  2. If so, were the dies cast returned to Australia when the contract expired; if not, why not?
  3. Has his attention been drawn to a report that the Indian Government has continued to mint these coins to order for sale to coin collectors?
  4. If this is the position, can he say whether India is making a profit from the minting of these coins?
  5. If so, what action is being taken to correct this situation?
Mr McMahon:

– The answer to the honorable member’s questions are as follows -

  1. Contracts were placed with the Bombay Mint for the supply of 9,000,000 1942 pennies and 6,000,000 1942 half-pennies, and similar quantities of 1943 pennies and half-pennies. Supplies of these coins were also ordered from the Melbourne and Perth Mints.
  2. The original master dies and punches for the order placed with the Bombay Mint were supplied by the Melbourne Mint. From these tools the Bombay Mint would have made large numbers of working dies for the actual striking of the coins, lt has not been the Treasury’s practice when ordering coins overseas to ask for the return of all dies and punches after the completion of the order. It had been assumed that all overseas mints producing coins for Australia would either destroy the dies after completion of the contract, or otherwise ensure that they were not used for subsequent production of coins additional to the original orders placed.
  3. Yes.
  4. It is understood that the Bombay Mint has been prepared since 1960 to sell 1942 and 1943 Australian pennies and halfpennies to bona fide collectors at a price appreciably higher than their face value.
  5. Representations were recently made to the Indian authorities through the Australian High Commission in New Delhi. The Minister of State in the Indian Ministry of Finance has now stated that, in deference to the wishes of the Australian Government, the Government of India has decided to stop further supply of the coins.

Farm Development Loan Fund. (Question No. 1657.)

Dr Patterson:

n asked the Treasurer, upon notice -

  1. What is the general rate of interest for each broad classification of development expenditure to be financed within the provisions of the proposed long term Government Farm Loans Scheme for which preferential bank overdraft rates are applicable?
  2. What is the approximate percentage weighting, based on the last five years, of the volume of funds loaned for each broad classification of development expenditure made by way of preferential bank overdrafts to primary producers?
Mr McMahon:

– The answers to the honorable member’s questions are as follows -

  1. I should first point out that the Farm Development Loan Fund constitutes accounts of the Trading Banks and that, subject to general monetary policy, the administration of the Fund is a matter for the banks themselves. With regard to interest rates, the Reserve Bank sets a maximum rate of interest which banks may charge on advances, but does not specify rates for particular classes of borrowers. As I pointed out in my statement to the House on 31st March, however, the trading banks have assured the Government that loans from the Farm Development Loan Fund will be made within the range of preferential overdraft rates normally applicable to rural customers, with the majority of loans being towards the lower end of this range.
  2. Statistics are not available to show, in respect of bank overdraft loans to primary producers, a classification of the types of developmental and other purposes to which the loans have been applied. In practice, it is likely that in many cases an overdraft loan made by a bank to an individual primary producer would be applied to a number of such purposes.

Civil Aviation. (Question No. 17S6.)

Mr Drury:

y asked the Minister for Civil Aviation, upon notice -

  1. Has the expert committee been appointed yet to inquire into parallel timetables of the two major domestic airlines and associated matters?
  2. If so, will he indicate the names and qualifications of the members of the committee?
  3. When will the committee commence its inquiries?
Mr Swartz:

– The answers to the honorable member’s questions are as follows -

  1. Yes.
  2. The members of the Committee are the following senior officers of my Department of Civil Aviation -

Mr. R. W. S. Gross, D.F.C., Senior Assistant Director-General (Airways Operations), of the Operations Division, who will be chairman.

Mr. D. W. O’Brien, B.Comm., Dip. P.A., Director of Aviation Policy and Research Services, of the Policy Division. Mr. K. R. Smith, D.F.C., M.I.D., A.A.S.A., Manager of Melbourne Airport, for the Ground Facilities Division. In addition, the Committee will have as technical adviser -

Mr. D. S. Graham, M.V.O., M.B.E., Assistant Director-General (Air Safety Investigation).

  1. I expect the Committee to commence work within the next few weeks.

Cite as: Australia, House of Representatives, Debates, 4 May 1966, viewed 22 October 2017, <>.