House of Representatives
16 March 1967

26th Parliament · 1st Session



Mr SPEAKER (Hon. W. J. Aston) took the chair at 10.30 a.m., and read prayers.

page 729

PETITIONS

Road Safety in Canberra

Mr J. R. FRASER presented a petition from certain residents of Canberra praying that this House will, as a matter of urgency, direct that the appropriate authorities take all necessary action to have pedestrian traffic lights and other safety devices deemed essential installed at the Limestone Avenue, Donaldson Street and Elder Street intersections.

Petition received and read.

Customs House, Circular Quay, Sydney

Mr St JOHN presented a petition from certain citizens of the Commonwealth praying that the Commonwealth Government co-operate with the State Government of New South Wales in sparing the Customs House Building, Circular Quay, from possible demolition and to undertake its conversion into a maritime museum.

Petition received and read.

page 729

QUESTION

TELEPHONES

Mr DUTHIE:
WILMOT, TASMANIA

– I ask the PostmasterGeneral a question that relates to the destruction of telephones during the recent bushfires in Tasmania. Is it a fact that if the owner of a house has had his telephone destroyed as a result of the bushfires and his house was insured, he has to pay for the loss of that telephone and so for a new telephone when his service is eventually restored? Is it true that if there is no insurance cover the Postmaster-General’s Department will pay for the replacement of a telephone that has been destroyed? Further, is it a fact that if a service was cancelled by a subscriber as a result of the fires destroying everything that he had, the subscriber has to pay a reconnection fee of $20 when he wants his telephone service restored? If the service was not cancelled, would a subscriber have to continue to pay rental even though his telephone service will not be reconnected for several months?

Mr HULME:
Postmaster-General · PETRIE, QUEENSLAND · LP

– When telephones are destroyed by bushfires such as those which occurred recently in Tasmania, or by floods, the equipment is replaced at departmental cost unless insurance covered the actual equipment. So far as rentals are concerned, there will be a refund to every subscriber where in fact the home or property of the subscriber was destroyed and, in addition, the telephone equipment. If a person rebuilds in the same locality or on the same piece of land and requires a telephone connection, no reconnection fee will be charged.

May I take the opportunity while mentioning the bushfires in Tasmania to pay a short personal tribute to the officers of my Department for the work that they did in repairing and restoring telephone communications in Tasmania. The cost to the Government of this work was some $700,000. What was done by the officers of the Postmaster-General’s Department has been recognised in quite a number of places. Letters have been received from the Governor of Tasmania and a number of other prominent people in that State in this connection.

page 729

QUESTION

NATIONAL SERVICEMEN

Mr FOX:
HENTY, VICTORIA

– Will the Minister for the Army indicate what the attitude of his Department would be in the circumstances of the present limited war in Vietnam to the call-up of a boy whose brother had been killed or seriously injured in Vietnam?

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

-The honourable member outlined circumstances concerning a limited engagement such as would be involved in Vietnam in which one member of a family had been killed or seriously wounded in the conflict in that country. He then referred to a brother of the person wounded or killed being called up for national service also. In those circumstances, the Department of the Army would take steps to see that the same family would not experience an undue share of the burden in that conflict. No guarantee can be given, of course, that this kind of policy could be pursued in any wider war.

Unfortunately, Army records do not normally reveal this kind of relationship. They do not show whether a soldier has a brother serving or has had a brother serving in the Army. If anyone is in this position in relation to the Army, I think that the best way of seeing that any particular family does not suffer an unequal share of this burden might well be by giving some publicity to the question asked by the honourable member and to the answer that I have given.

page 730

QUESTION

WAR SERVICE LAND SETTLEMENT

Mr BEATON:
BENDIGO, VICTORIA

– I ask the Minister for Primary Industry a question that he refrained from answering during the debate last night on the Loan (War Service Land Settlement) Bill. Does the Government intend to provide war service land settlement opportunities to servicemen returning from Vietnam? If so, when can the House expect such an announcement? If not, why will not Australia’s soldiers engaged in, to use the words of the Government, ‘defending this country’ be entitled to the benefits that were granted willingly to their fathers and grandfathers following the other wars in which Australia was involved? Will the Minister advise the House in which branch of primary industry national servicemen returning from Vietnam could expect to establish themselves with the announced and miserly £3,000 interest bearing loan available for ‘establishment in agriculture*?

Mr ADERMANN:
Minister for Primary Industry · FISHER, QUEENSLAND · CP

– The part of the honourable member’s question which relates to the general rehabilitation of servicemen does not come within the jurisdiction of my Department, and in that regard I refer him to the appropriate Minister. The rest of the question relates to a matter of policy which will be announced by the Government in due course.

page 730

QUESTION

OFFSHORE PETROLEUM

Mr HAWORTH:
ISAACS, VICTORIA

– My question, which 1 direct to the Minister for National Development, relates to the offshore pipeline from the Gippsland coast in Victoria. It has been stated by a Melbourne barrister in the Victorian Parliament that the Bill now before the State Parliament relating to this undertaking will be challenged in the courts for the reason that the agreement on offshore exploration has not been ratified federally before the introduction of State legislation Is this opinion correct? If it is, does the Government propose to take any immediate action to overcome this possible constitutional defect so as to avoid any further delay on this important pipeline?

Mr FAIRBAIRN:
Minister for National Development · FARRER, NEW SOUTH WALES · LP

– The constitutional position of the ownership of the offshore areas is perhaps more a matter for my colleague the Attorney-General and the State Attorneys-General than it is for me, but it was in order to avoid litigation and conflict in the courts that the Commonwealth and the six States came together on this. They wanted to see the offshore areas developed from the point of view of the best national interest. The six State Ministers for Mines and myself have already made joint statements in the seven Parliaments stating the basis of a common code on which legislation will be introduced in due course. In the meantime, the Victorian Government has introduced legislation to ratify the licence given to Esso Exploration Aust. Inc. and the Broken Hill Pty Co. Ltd. Ii is in terms similar to those which will be adopted by the Commonwealth and the States in the general common code when the legislation providing for the code is approved. I do not think I can say anything more about the constitutional position, but the position so far as the common code is concerned is, that virtual agreement has been reached between the Commonwealth and the six States.

page 730

QUESTION

HEALTH

Mr CURTIN:
KINGSFORD-SMITH, NEW SOUTH WALES

– My question is directed to -he Minister for Health, ls it a fact that the Minister has cancelled the free distribution of quinine tablets for pensioners who suffer from cramps in the limbs? Is the Minister aware that pensioners in need of the tablets have now to pay 10c for each tablet used? Does the Minister also know that cortisone has been taken off the free list for pensioners suffering from various blood diseases? Is the Minister aware that these unfortunate sufferers have to pay as much as S2.90 a fortnight out of their pensions in order to keep alive? Will the Minister examine this imposition with a view to fording some relief to pensioners generally?

Dr FORBES:
Minister for Health · BARKER, SOUTH AUSTRALIA · LP

– The information that the honourable gentleman gave the House in elation to quinine is correct, and I would assume, without knowing precisely, that the statement in relation to cortisone is true too. This situation comes about as a result of a recommendation by the Pharmaceutical Benefits Advisory Committee, which is an expert committee set up under the National

Health Act. It comprises some of Australia’s leading physicians and pharmacologists. It advises the Minister for Health on the drugs which should be on the pharmaceutical benefits list and any restrictions which should relate to them. Under the National Health Act I, as Minister, am obliged to accept the recommendations of the Pharmaceutical Benefits Advisory Committee in relation to drugs on the pharmaceutical benefits list and restrictions relating to them. The honourable gentleman has made particular representations in relation to two drugs. I will be glad to refer what he has had to say to the Committee for consideration at its next meeting.

page 731

QUESTION

DECENTRALISATION

Mr HOLTEN:
INDI, VICTORIA

– My question, which 1 address to the Prime Minister, refers to the joint Commonwealth-State Officials Committee on Decentralisation. Who is the convenor of the Committee? How often has it met since it was formed? Is a date set down for the next meeting? If not, will the Prime Minister use his offices to see that the next meeting is held urgently?

Mr HAROLD HOLT:
Prime Minister · HIGGINS, VICTORIA · LP

– The Commonwealth is the convenor of this joint Committee. The main Committee has met twice since it was formed but there have been numerous meetings of a technical working party and Commonwealth and State officials maintain regular and continuous contact-

Mr Charles Jones:
NEWCASTLE, VICTORIA · ALP

– I rise to order. Is the Prime Minister entitled to read a prepared reply to a question without notice?

Mr SPEAKER:

– Order! There is no substance in the point of order. A Minister is entitled to answer a question as he thinks fit.

Mr Charles Jones:
NEWCASTLE, VICTORIA · ALP

– This was a question without notice.

Mr SPEAKER:
Mr HAROLD HOLT:

– I think there is general interest in the House in the policy of decentralisation to which, as I understand it, all parties give their support. At present a technical exercise is proceeding which is designed to establish the facts relevant to the study. This far reaching and complex exercise involves a great many departments and instrumentalities. A further meeting of the Committee will be called when the study has advanced to an appropriate stage. I understand that the Committee might meet again in the second half of the year.

page 731

QUESTION

BROADCASTING

Mr FULTON:
LEICHHARDT, QUEENSLAND

– I ask the PostmasterGeneral a question. The honourable gentleman may recall my many requests for alternative Australian Broadcasting Commission programmes in far north Queensland. The ABC stations at Cairns and Atherton broadcast the same programmes. People of the areas have requested that one of the stations continue its sporting programme beyond 5 p.m. on a Saturday afternoon instead of both stations broadcasting the children’s session at 5 p.m. The sporting population has waited-

Mr SPEAKER:

-Order! The honourable member’s preface is far too long. He should direct his question.

Mr FULTON:

– Mine is not as long as some others have been, Mr Speaker. I ask: Is it possible to have an alternative programme in far north Queensland?

Mr HULME:
LP

– It is my understanding that nearly all Australian Broadcasting Commission stations, including those in north Queensland at Cairns and Atherton continue their sporting programmes on Saturday afternoons until 5.30 p.m. When a public holiday falls on a Monday and a sporting programme is on the air the broadcast finishes at 5 p.m. to enable the children’s programme to come on at the usual time. The only exception to this rule, as I understand it, is when cricket test matches are being broadcast. Then the broadcast is continued until 6 p.m. or the drawing of stumps.

page 731

QUESTION

TOURISM

Miss BROWNBILL:
KINGSTON, SOUTH AUSTRALIA

– I should like to ask a question of the Minister for the Navy in his capacity as Minister in Charge of Tourist Activities. I refer to the undertaking given by the Prime Minister last year in his policy speech to establish an Australian Tourist Commission. Assuming that the establishment of the Commission will necessitate an increased Commonwealth financial commitment abroad in the promotion of tourism in Australia, will the Minister consider extending travel facilities to accredited overseas writers and correspondents who can give Australia most valuable publicity for which we do not have to pay - a very notable consideration? This publicity, we must realise, is terribly important because on it rests to a large extent our capacity to earn tourist revenue.

Mr CHIPP:
Minister for the Navy · HIGINBOTHAM, VICTORIA · LP

– As the honourable member would know, this excellent idea of inviting writers and other people to Australia has been taken up by the Australian National Travel Association in the past. As the Prime Minister has said, the Government hopes to establish an Australian Tourist Commission. It will be relatively small in number but will be composed of men with experience and dynamic ideas who can project abroad an exciting and dramatic picture of Australia’s tourist potential. My colleague the Minister for Trade and Industry, who is the Minister primarily involved, will be responsible for the direction and oversight of policy. Questions of detail will be handled by the Commission. If I may say so, I personally am, and have been for some time, attracted to the idea outlined by the honourable member. I undertake to refer it to the Chairman of the Commission as soon as he is appointed.

page 732

CALLS FROM THE CHAIR

Mr SPEAKER:

– The honourable member for Kalgoorlie.

Mr Barnard:

Mr Speaker-

Mr SPEAKER:

-The Deputy Leader of the Opposition.

Mr Barnard:

– I do not want to reflect on your impartiality in these matters, Mr Speaker, but this is the third occasion on which I have risen to ask a question. The normal practice is to extend the courtesy of the call to the Leader of the Opposition or his Deputy when either of them rises.

Mr SPEAKER:

-Order! The Chair decides how the call shall be given. As to the giving of the call to the Leader of the Opposition and his Deputy as a matter of courtesy, I shall look into the practice followed by my predecessor.

Mr Barnard:

– Have I the call now?

Mr SPEAKER:

– Yes.

page 732

QUESTION

PHARMACEUTICAL CHARGES

Mr BARNARD:

– My question is directed to the Minister for Health. I refer him to a report in this morning’s ‘Financial Review’ that Australian chemists have raised by 25% the dispensing charge for items that do not come under the pharmaceutical benefits scheme. Can the Minister verify that report? If he can, can he outline to the House details of the increase? What prescriptions will be affected by the increase? Will increases apply mainly to items already packaged before they reach the chemists? Did the Federated Pharmaceutical Service Guild of Australia consult the Government before applying the increase? Is the increase designed to impose presssure on the Government for an increase in dispensing charges for items covered by the pharmaceutical benefits scheme?

Dr FORBES:
LP

– I am glad to say that this is still a free country.

Mr SPEAKER:

-Order! There are far too many interjections. The House will come to order.

Mr Curtin:

– When did the Minister wake up to that?

Mr SPEAKER:

-Order! The honourable member for Kingsford-Smith will come to order.

Dr FORBES:

– What the chemists or pharmacists of this country care to do in relation to their dispensing fees or anything other than pharmaceutical benefits surely and obviously is a matter for themselves.

Mr Barnard:

– The Government is not concerned about the increase?

Dr FORBES:

– Because the taxpayers pay for pharmaceutical benefits such benefits are of great concern to the Government. The dispensing fees and the mark-up paid under the pharmaceutical benefits scheme have not been altered for some time. The House is probably aware that the Government and the Federated Pharmaceutical Service Guild of Australia are jointly paying a firm of private consultants to inquire into the costs of pharmacists. The results of this inquiry are to be used in negotiations between the Guild and the Government concerning the appropriate dispensing fee and the mark-up. I repeat that what pharmacists decide to charge for the dispensing of any service not covered by the pharmaceutical benefits scheme is their responsibility and not that of the Government.

page 733

QUESTION

BUILDING RESEARCH

Mr BOSMAN:
ST GEORGE, NEW SOUTH WALES

– My question, which is addressed to the Minister for Works, concerns the need for extensive research into a wide variety of activities and methods in the building and construction industry. I ask the honourable gentleman: will he consider the value of the Commonwealth, through his Department, giving a positive and substantive lead in the establishment of overdue research facilities in the field of building and construction with the objectives, among others, of raising standards, speeding construction, reducing costs and improving industrial relations?

Mr KELLY:
Minister for Works · WAKEFIELD, SOUTH AUSTRALIA · LP

– Before 1 answer the question specifically I would like to recount a small but interesting coincidence. Last evening when the honourable member for St George was sitting in the chair that you, Mr Speaker, now occupy so fittingly his attention was obviously wandering a little. Possibly this was because the honourable member for Scullin was at the time talking most eloquently about his vast experience of farming. When you took the chair again, Sir, the honourable member for St George came to me as I sat on the front bench and told me that he proposed to ask a question about the research problems that he has just posed. The coincidence was that at that very moment I was reading - ‘wading through’, I believe, is the term - a file that dealt with this subject. So I welcome the question.

I realise, firstly, that the industry acknowledges that there are research problems. The building industry, after all, is one of the biggest in the country. Representatives of it have made suggestions about the way in which the problems should be tackled and have even gone so far as to say that members of the industry should levy themselves in order to provide funds for the establishment of a research institute to tackle the problems involved. Speaking for myself and my Department, I would like to say that at this stage we are in the process of defining the problem. To this end I have been asked to arrange a meeting with leaders in the industry who have taken a particular interest and given a lead in taking up these problems. Our present intention is to have a long, cold and, I hope, clear eyed look at the subject so that we may see exactly what the problems are. We hope then to decide how we are to tackle them. So I can assure the honourable member for St George that the matter is receiving active, urgent and sympathetic attention from my Department.

page 733

QUESTION

PENSIONS

Mr COLLARD:
KALGOORLIE, WESTERN AUSTRALIA

– My question is addressed to the Minister for Social Services. Is it correct that a large number of pensioners, owing to their physical inability to offer for employment, cannot obtain any benefit or relief from the proposed increase in the limit of permissible income? If so, will the Minister recommend the introduction of a scale of pension benefits or allowances sufficient to ensure that such pensioners may enjoy a reasonable standard of living rather than merely eke out a miserable existence as so many do at present?

Mr SINCLAIR:
Minister Assisting the Minister for Trade and Industry · NEW ENGLAND, NEW SOUTH WALES · CP

– I do not quite get the point of the honourable member’s question. If his suggestion is that the higher limit of permissible earnings that is to be authorised by legislation soon to be introduced in this House should not apply to all pensioners, I point out that this is not the proposal at all. The increase in permissible earnings, which was announced by the Prime Minister in his policy speech for the recent general election campaign, is to apply equally to all pensioners. Legislation to implement this will shortly be introduced into this place and the honourable member will have an opportunity to discuss that legislation at that time.

page 733

QUESTION

OFFSHORE PETROLEUM

Mr GRAHAM:
NORTH SYDNEY, NEW SOUTH WALES

– I direct a question to the Treasurer. Has the right honourable gentleman any advice to give to the House on the subject of Government royalties and taxation, referred to generally these days in the Press as Government ‘take’, on oil and gas production from within the Commonwealth, having regard in particular to the speech of the Vice-Chairman of the Australian Petroleum Exploration Association, Mr C. W. Siller, to the 1967 conference of the Association held in Sydney during this week? Would the Minister be prepared to confirm and reassert his willingness to confer with representatives of the Australian

Petroleum Exploration Association at all appropriate times on appropriate matters?

Mr McMAHON:
Treasurer · LOWE, NEW SOUTH WALES · LP

– I did read an alleged statement made by the Vice-Chairman of the Australian Petroleum Exploration Association, and I regret to say, Sir, that this is a repetition of what had previously been said by Mr Hamlin of the Esso exploration organisation. After Mr Hamlin had made his statement, I went to great trouble to find out what the true position was and whether the alleged ‘take’ in Australia was greater than that in any other country. Sir, for various reasons pointed out in the Press statement, we came to the conclusion that no effective and sensible comparison could be made. We pointed out, Sir, that the oil companies had used a very technical method of estimating future returns and dividends in what is called a discounted cash flow’ technique. But they had been at great care to conceal the two essential factors on which a judgment could be made: first of all, the time limit in determining what is called ‘present worth’, and secondly, the interest rate they had used.

I also pointed out, Sir, that they have made no allowance whatsoever for special taxation concessions with regard to depreciation which in this country are probably greater than in most other countries and compare favourably with the best. They took no notice whatsoever of the decisions of the Government, particularly under the jurisdiction of my colleague the Minister for Trade and Industry, to increase the amount allowed for the sale of Australian oil from S3 to $3.50, the S3 having been recommended by the Tariff Board. Nor did they give any due consideration to the royalty payments in Australia; these happen to be, Sir, on any comparison, favourable to the oil operators here. So, Sir, I believe that the statement repeated yesterday carries us no further and gives us no helpful advice. As to the last part of the honourable gentleman’s question, Sir, I can say that I am willing at all times, and I believe that my colleagues would be willing at all times, to consult with the industry. We have done it recently in the case of the Marlin and Barracouta fields. We would be only too happy to do it in the future if we thought we could be of assistance to them.

page 734

QUESTION

VIETNAM

Mr STEWART:
LANG, NEW SOUTH WALES

– I direct a question to the Minister for External Affairs. Has the Australian Government been invited to send a representative to the conference to be held in Guam between the President of the United States and the Prime Minister of South Vietnam? Has the Government been advised of the topics to be discussed? Can they be expected to deal predominantly with the waging .of the war in Vietnam in which Australian troops are involved? Will the decisions taken at the conference be transmitted to the Australian Government and will Australia then be expected to follow blindly any alteration in policy on the Vietnam war? If no discussions on the conference have taken place between Australia and the United States, has this situation been accepted by the Government without protest?

Mr HASLUCK:
Minister for External Affairs · CURTIN, WESTERN AUSTRALIA · LP

– The Australian Government maintains the closest consultation with the United States Government through various channels. It can fairly be said that we are engaged in a continuous dialogue with the United States Government through our Ambassador in Washington, through the United States Ambassador in Canberra, from myself to my opposite number and from the Prime Minister to the President. We have confidence in this close relationship and the opportunity that we have at all times of conveying our views.

We were informed of the Guam conference. It is a conference primarily concerning matters under the control of the United States and I think any announcements to be made regarding the subject matters of the conference could more properly come from the United States. We have been closely in touch and we have an opportunity of conveying our views. We will convey our views on any matters that concern the Australian Government.

There is another point that I might mention to the House. In April, following the conference of the South East Asia Treaty Organisation in Washington, I will have an opportunity on behalf of Australia to take part in a discussion between the Foreign Ministers of the force contributing countries in Vietnam. That will provide another opportunity of ensuring that Australia’s views are constantly known and are clearly expressed.

page 735

QUESTION

HOSPITAL AND MEDICAL BENEFIT FUNDS

Dr MACKAY:
EVANS, NEW SOUTH WALES

– My question is addressed to the Minister for Health. Has his attention been directed to a recent statement by the Leader of the Opposition on the national health services? Did the allegations of the Leader of the Opposition present a fair and accurate statement of the facts? In particular, how accurate is the statement that there are 191 different medical and hospital benefit funds? By what process can the management costs of the funds be related to the collection of Commonwealth taxes? How valid is the comparison of costs in the United Kingdom with those in Australia? How much reliance can be placed on statements comparing costs of contributions six years ago with those today?

Dr FORBES:
LP

– I must confess that I was somewhat surprised at some of the things that the Leader of the Opposition had to say in his first statement on the health scheme since he became Leader of the Opposition.

Mr Beaton:

– Did the Minister read it in a newspaper?

Dr FORBES:

– No, I read it in a copy of the notes used for his speech, which was provided by his office. In answer to the first part of the honourable gentleman’s question, I point out that the Leader of the Opposition referred to the bloated private bureaucracies and duplication of services. He used as evidence of this the fact that there are 191 funds. What he did not say was that the National Health Act requires each medical and hospital fund to be registered separately. Most of the funds carry on both hospital and medical business. Therefore, for effective purposes, the number of 191 can be reduced by about half. What he did not say also was that a large number of small funds are confined to the employees of particular firms and to the people of a district based on the local hospital. Because the administrative costs of these small funds are subsidised by the firm or organisation concerned, very favourable treatment is given by them to their contributors. What he did not say-

Mr Barnard:

– How many are registered?

Dr FORBES:

– I am trying to answer the question that was asked.

Mr SPEAKER:

-Order! The Deputy Leader of the Opposition is continually interjecting. The question has been asked and the Minister is entitled to be heard without interruption.

Dr FORBES:

– What the Leader of the Opposition did not say also was that five funds in Australia cover approximately 72% of the insured people. I believe that this combination - the combination of the factors I have given - presents a very different picture. It gives the opportunity for a wide range of choice combined with reasonable efficiency and lack of waste in administration.

As to the second point raised by the honourable gentleman, the Leader of the Opposition compared the management costs of the funds, as a percentage of contributions paid in, with the administrative costs of the Taxation Branch as a percentage of the amount of tax collected. I believe that this is a completely invalid and unreasonable basis of comparison. I point out that not only is the amount of collections by the Taxation Branch enormously greater than the contributions paid to the funds, but the volume of administrative activity, in terms of assessment of claims and so on, is very much greater in respect of the funds. I think the absurdity of this comparison can be shown if I make the point that if you doubled the contributions paid to the medical and hospital benefits funds on the basis of comparison used by the honourable gentleman you would automatically reduce the percentage of administrative costs by half. If you increase them by ten times you get them below the percentage he has stated for the Taxation Branch. If for some other reason in one year you reduce by half the amount of money collected in taxation you double, by this process, the administrative costs of the Taxation Branch, according to the honourable gentleman’s reasoning. My Department lays down what it believes to be a reasonable percentage of contribution income that should be used in administrative costs by the funds. The funds without exception adhere to this reasonable basis.

As to the third point raised by the honourable gentleman-

Mr Beaton:

– I rise to a point of order, Mr Speaker. I ask, in the first place, whether the question did not invite debate and if so whether it is not, consequently, out of order. Secondly, I suggest that the Minister is now debating the matter.

Mr SPEAKER:

-Order! There is no substance in the point of order. The Minister is entitled to answer the question in his own way.

Dr FORBES:

– I know, Sir, that this exposure of the loose way in which the Leader of the Opposition uses facts rather hurts honourable gentlemen opposite, but the loose use of facts is characteristic of the Leader of the Opposition. He compared the efficiency of the Australian national health scheme unfavourably with that of the British national health scheme. He suggested that per head of population our health costs in Australia were greater. He quoted the Professor of Hospital Administration of the University of New South Wales. What he did not say was that the Professor of Hospital Administration-

Mr Daly:

Mr Speaker, I rise to a point of order.

Mr SPEAKER:

– What is the point of order?

Mr Daly:

Mr Speaker, you are a new appointee to the Speakership. Your predecessor

Mr SPEAKER:

-Order! What is the point of order?

Mr Daly:

– The point of order is that the Minister is deliberately filibustering and defying the general procedures of this House by talking out question time.

Mr SPEAKER:

– Order! There is no substance in the point of order. The Minister is entitled to answer the question as he thinks fit.

Mr Daly:

– I take a further point of order, Mr. Speaker. Does that mean that if the Minister started to speak at 10.30 o’clock he could have kept on answering the question for three-quarters of an hour?

Mr SPEAKER:

-Order! There is no substance in the point of order. I repeat that the Minister is entitled to answer the question as he thinks fit.

Dr FORBES:

– I will. I think this is definitely important. What the Leader of the Opposition did not say is that the Professor-

Mr Hayden:

– I rise to a point of order. I suggest that the Minister is misusing the forms of the House and I suggest that the House ought to consider the matter seriously.

Mr SPEAKER:

-Order! There is no substance in the point of order.

Mr Hayden:

– I move:

Mr SPEAKER:

-Order! No point of order is involved. The honourable member is debating the matter; he will resume his seat.

Mr Hayden:

Mr Speaker, I have proposed a motion.

Mr Barnard:

– The honourable member for Oxley has moved, Mr Speaker, that the Minister be not further heard.

Mr SPEAKER:

-I am afraid I did not hear him with the noise that was going on in the chamber.

Mr Hayden:

– I move this motion with a great deal of reluctance, Mr Speaker-

Mr SPEAKER:

-Order! There is a motion before the Chair and it may not be debated. Is the motion seconded?

Dr Patterson:

– Yes, I second it.

Mr SPEAKER:

– I must have the motion in writing. (The honourable member for Oxley having submitted his motion in writing)

Question put:

That the Minister for Health be not further heard.

The House divided. (Mr Speaker- Hon. W. J. Aston)

AYES: 36

NOES: 74

Majority 38

AYES

NOES

Question so resolved in the negative.

page 738

ANZAC COMMEMORATIVE MEDALLION AND BADGE

Ministerial Statement

Mr HAROLD HOLT:
Prime Minister · Higgins · LP

– by leave - Last March, the Minister for Defence (Mr Fairhall) announced that it had been decided by the Australian Government, in consultation with the New Zealand Government, to issue a medallion and lapel badge to the veterans of the Gallipoli campaign. I am glad to be able to announce that arrangements have now been completed for the production of the medallion and the badge. As soon as possible the Minister for the Army (Mr Malcolm Fraser) will arrange for distribution of the medallions and badges to those wishing to receive them. The Government hopes that production of the medallion and lapel badge will be sufficiently advanced to permit at least some of them to be distributed by Anzac Day.

The medallion, with the name of the recipient inscribed, will be issued to the surviving members of the Australian defence force that served on the Gallipoli Peninsula, or in direct support of the operations from close offshore, at any time during the period from the first Anzac day in April 1915 to the date of final evacuation in January 1916. Next of kin or other entitled persons will be entitled to receive the medallion on behalf of their relatives, if the relative died on active service or has since died. For surviving members, a lapel badge will also be available for wearing. This will be a replica of the obverse, or front, of the medallion and will be about one inch high and two thirds of an inch wide - the same size as the Returned Servicemen’s League badge.

The medallion is the work of Mr Raymond Ewers, the well known Australian artist, based on a suggestion by Mr Eric Garrett, a staff artist with the Department of the Army. It has been endorsed by both the Government of New Zealand and ourselves. It will be approximately three inches high and two inches wide. The obverse o* the medallion depicts Simpson and his donkey carrying a wounded soldier to safety. It will be bordered on the lower half by a laurel wreath above the word ANZAC. The reverse, or back, shows a map in relief of Australia and New Zealand superimposed by the Southern Cross. The lower half will be bordered by New Zealand fern leaves. The medallion will be cast in bronze and the lapel badge will be metal of a bronze colour.

For the information of honourable members I present also a brief statement setting out the conditions of eligibility which will apply to the medallion and badge and the manner in which those desiring to receive them should apply. I present the following paper:

Anzac Commemorative Medallion and Badge - Statement with respect to Conditions of Eligibility and Applications.

page 738

SPECIAL ADJOURNMENT

Motion (by Mr Snedden) agreed to:

That the House, at its rising, adjourn until Tuesday, 4 April, at 2.30 p.m.

page 738

BUREAU OF MINERAL RESOURCES

Discussion of Matter of Public Importance

Mr SPEAKER:

-I have received a letter from the honourable member for Macquarie (Mr Luchetti) proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The exceptional number of resignations from the professional staff of the Bureau of Mineral Resources in recent years, particularly in the last three months, leading to the disruption of be activities of the Bureau and the lowering of its morale.

I call upon those members who approve the proposed discussion to rise in their places. (More than the number of members required by the Standing Orders having risen in their places),

Mr LUCHETTI:
Macquarie

– This Parliament has reason to be seriously concerned at the loss of highly qualified professional officers from the Bureau of Mineral Resources. It is the view of the Opposition that national interests demand that Parliament give consideration to this question. The subject proposed by th-: Opposition is explicit. It deals with the excessive resignations from * the Bureau. It deals with the falling off in morale, and it draws particular attention to those members who have resigned over the last three months. The opposition declares that the Government should take corrective action to remove the cause of the resignations and to strengthen the Bureau.

The Minister for National Development Mr Fairbairn) has said that the value of mineral exports from Australia should reach

SI, 000m by 1975. The Opposition believes that if minerals were to be processed here by expanded manufacturing industries the figure could be considerably greater than that. Whether this estimate of the Minister for National Development is achieved depends to a very great extent on the work of the Bureau of Mineral Resources to which we owe so much for the progress achieved in our mineral exploration to date.

The Parliament has good reason to be proud of the work of the Bureau which was established in 1946 by the then Labor Government. Today, the Parliament has reason to be concerned, and this debate has been initiated in the hope that the Minister will face the realities of the situation and recognise the Bureau for what it is - a vital national organisation inseparably linked with the progress of Australia. A brief examination of the functions of the Bureau clearly tells the story of this valuable organisation’s worth to the nation. With the concurrence of honourable members, I incorporate in Hansard a list of those functions.

BUREAU OF MINERAL RESOURCES GEOLOGY AND GEOPHYSICS

  1. M. Rayner - Director

Functions

The functions of the Bureau are -

To explore for, investigate and encourage the development of mineral deposits.

To survey and assess the mineral resources of the Commonwealth and its Territories and to initiate and investigate proposals for their development.

To interpret the results of completed surveys and recommend ways of remedying or meeting mineral deficiencies that may become apparent, and to advise on all aspects of the mineral economy of Australia, including the best utilisation of mineral resources in the national interest.

To carry out geological and geophysical surveys and investigations, and advise on all aspects of applied geology and geophysics.

To discharge these functions the Bureau is required to -

Make geological surveys and investigations (both regional and detailed) and carry out research relating thereto.

Make geophysical surveys and investigations (including airborne, regional gravity and magnetic surveys) and carry out research related thereto.

Supplement geological and geophysical investigations by drilling or other means.

Make basic investigations of earth magnetism, vulcanology, and seismology and operate observatories for this purpose.

Make technical and technological surveys of the mineral industry, curry out investigations, and undertake research into mining, petroleum technology, and related matters.

Undertake economic investigations into the mineral industry, including production, consumption, prices, and trade trends, and maintain statistics relating thereto.

Provide technical and technological advice to the mineral industry.

Advise the Commonwealth Government on the scientific, technical, and administrative aspects of the mineral industry. administer Commonwealth Government schemes for the assistance of individual mineral industries.

When specifically directed by Cabinet, undertake the mining, treatment, purchase, sale or control of any mineral.

Maintain necessary libraries, equipment, laboratories, museums and workshops.

Prepare and publish reports, maps and plans relating to the above functions.

The Opposition is disturbed not only at the number of resignations and the lowering of the morale of the organisation, but at the indifference of the Minister to the serious issues involved. The apparent lack of ministerial concern is borne out by the Minister’s failure to take positive measures to deal with the causes of the feelings of frustration and dissatisfaction and the eventual resignations of highly qualified officers.

This is not a new problem. The Leader of the Opposition (Mr Whitlam) directed attention to the gravity of the problem of the loss of senior scientific officers during the debate on the Estimates in 1965. The report of what he had to say is to be found on page 2025 of Hansard of that year. He drew attention to it again on 15th September 1966. The report of his speech is to be found on page 948 of Hansard of that date. The Minister has shown himself to be utterly complacent about the resignation pattern. He has been content, in his inert way - I say this with all charity and the utmost kindness towards the Minister - to allow the matter to drift. The resignations of the senior professional staff in 1963-64 and in 1964-65 are causing us much concern. The Minister would make it appear that these were mere tiros, beginners - jackaroos, as he described them. This is not so. In 1963-64 two officers with PhD degrees resigned and in 1964-65 five officers with PhD degrees resigned. These figures are available in the Senate Hansard of 19th October 1965 at page 983. During only one year in the last six have resignations from the Geological, Geophysical and Petroleum Exploration Branches of the Bureau of Mineral Resources fallen below 10% of the establishment. Resignation figures have gone as high as 17i% This compares most unfavourably with the Commonwealth Scientific and Industrial Research Organisation which has a resignation rate of only 2%. Surely the lesson is plain. An answer is to be drawn from this situation in which the CSIRO has resignations of less than 2% and the Bureau of Mineral Resources has resignations averaging 10% but going as high as 17i%. Resignations from the Geological, Geophysical and Petroleum Exploration Branches of the Bureau of Mineral Resources in the last few years have been as follows: in 1961, seventeen; 1961-62, twelve; 1962-63, twenty; 1963-64, twenty-three; and in 1964- 65, thirty-four. Of the 1964-65 resignations five were doctors, seven were masters and fourteen were bachelors with honours, lt is a disturbing and shattering thought that men of such outstanding quality - men required for the work of nation building - should be lost to the central organisation of government so important to the affairs of this nation. These are the people upon whom we depend for our intelligence and information, for surveying and mapping, and for all the valuable information necessary for advising the Minister and the Government on attitudes that should be adopted regarding petroleum search and all other associated matters. Since 1st January twenty geologists and geophysicists have resigned and three more resignations are pending. This emphasises the urgency of this matter. This has happened in the last three months.

The Minister and some members of the Government seem to regard the Bureau of Mineral Resources as a sort of ad hoc agency of private enterprise - of oversea companies here to exploit this country. We regard this organisation as the Australian Labor Party of 1946 regarded it - as an important instrument in the management of this nation. Replying to the Deputy Leader of the Opposition (Mr Barnard) on the 7th of this month, the Minister dismissed the problem lightly when he said that the resignations were not excessive. I leave it to honourable members to judge whether they were excessive. The Minister went on to say:

The Bureau has always been regarded as a place for training young geologists who have completed their university courses. They go to the Bureau and do perhaps two or three years’ work there, just as a person might go out jackerooing on a property.

This, sadly, is the Minister’s evaluation of qualified people in his own Department. It is not good enough. It is not surprising that the professional officers in a signed statement spoke out coldly, clearly and unequivocally on the Minister’s statement. In the course of the professional officers’ statement, signed by Mr L. S. Cunningham, their General Secretary, they had this to say:

The Minister for National Development, in answer to a question by Mr Barnard in the House of Representatives on Tuesday night, made some statements about the Bureau of Mineral Resources. We believe those to be both inaccurate and misleading. The Minister implied that the loss of scientists was mainly among those whom he so felicitiously compared to jackeroos’: new graduates with less than three years’ experience. This is untrue.

Since January 1966 the Bureau has lost 24 geologists, with 200 man-years of experience between them; 12 geophysicists with 120 manyears; and 2 mineral economists and a petroleum technologist, with 31 man-years. Only 7 geologists and 3 geophysicists fall into the jackeroo’ class. In return, 22 geologists with U years experience between them, and 13 geophysicists only one of whom has previous experience, have been recruited; and it is to be noted that a large proportion were recruited from overseas, because Australia is not producing enough geologists of the calibre needed to maintain the quality of scientific work required of the Bureau. The net result is the cancellation of two geological field parties this year, and the allocation of too many inexperienced officers to most of the others.

Nor, is it true, according to our information, that resignations among senior staff have been due only, or even mainly, to the higher salaries offered by industry: lack of career opportunities, inept administration, and the appalling delay in reorganising the structure and classification of the Bureau, are the main contributing factors in most cases.

Complacency in the face of this ‘brain-drain’ Ls surely misplaced: the loss of so much experience will inevitably tend to lower the quality of scientific work, and will vitiate the very function so smugly referred to by the Minister: for who is left to train the new graduates?

Whilst the Professional Officers Association would welcome the strengthening of the Bureau’s staff by the sixty additional officers said by the Minister to have been approved last week, the dearth of fully trained professional officers available for employment would frustrate any attempts of recruitment. The Minister, however, need have no fears - only one additional geologist position is understood to be numbered amongst the sixty mentioned by him. To repeat Mr Barnard’s question: what is the Minister doing about it?

This statement is signed by Mr Cunningham, the General Secretary of the Professional Officers’ Association. We add our words to what the General Secretary has had to say. We ask the Minister: what is he going to do about it? Here is the challenge. Here is his field of responsibility. This is an all important organisation. Surely the Minister should meet his professional officers, see what is wrong and come to terms with them. If giving them a new status or putting them on a new basis under which to work - putting them in a field somewhat similar to the CSIRO - will overcome the difficulties, then this should be done for the officers and for this country. It is little wonder that the Professional Officers Association is indignant with the Minister’s reply in the Parliament. Surely this is evidence in support of the motion 1 am proposing and of the morale in the Bureau being low. When the Association finds it necessary to write in such forceful terms to the Minister the situation is not good. It should not be necessary for the Association to so write. There should be complete understanding and unity - a dialogue - between the Minister and these professional people with their high qualifications and it should not be necessary for the matter to be ventilated in this way in the Parliament. Once a Minister vacates his field and cannot talk to men of the quality involved in a discussion of this kind, surely something is sadly amiss. This is not the viewpoint only of the Association.

In today’s issue of the ‘Financial Review* is a letter by F. K. Wright, Professor of Commerce of the University of Adelaide, drawing attention to the same problem. Further reference is made in the ‘Australian’ of Tuesday, 14th March 1967, as follows:

Director sends off more experts.

This was a view expressed by private enterprise. Sir Ian McLennan was drawing attention to the need for more experts. Yet they have been frustrated by the Government which should be encouraging them.

Mr SPEAKER:

– nations in The honourable member’s time has expired.

Mr FAIRBAIRN:
Minister for National Development · Farrer · LP

– I welcome the opportunity to speak on this matter because some people have said that there have been an excessive number of resignations from the Bureau of Mineral Resources. What is meant by ‘excessive’? Naturally I as Ministerial head of the Bureau do not like to see resignations of any sort, but is the present turnover excessive? There have been twenty-nine resignations in a year from a professional staff of 284. lt is interesting to note that we recruited more people than we lost last year and that in the last six years we have recruited more people for the BMR than we lost. I do not say for one moment that those whom we recruited were as well fitted or had been as long in geology as the ones whom we lost, but I do not think this is an excessive turnover. I have recently been looking at the turnover in geologists and other professional people in three of the major mining companies operating in Australia. One company had a turnover of 7%; another, which was a large company, had a turnover of 12%; and the other had a 10% turnover.

My colleague, the Minister for Labour and National Service (Mr Bury), drew my attention to a report in this morning’s Age’ in which a Dr Douglas W. Bray from the American Telephone and Telegraph Company said that half of the 2,000 university graduates recruited yearly by the company either resigned or were dismissed within ten years. Although the number of resignations from the BMR is perhaps higher than I would like to see, I do not feel that it is excessive, particularly when we consider where these people go. We find that 35% of the people who resigned from the BMR go to some mineral exploration company and become leaders in industry. What can the Commonwealth do better than to see that people whom it recruits and to whom it gives extensive training in geology go to the great mineral companies which are helping to develop the wealth of the nation or, as the honourable member for Macquarie (Mr Luchetti) said, are nation building. I welcome the fact that they do go there. Then 30% of the people who leave the BMR go to the universities, some of them to teach and some of them to take further study courses so as to fit themselves for work later, either with the BMR again or with some of the great mining companies in Australia. Another 10% who leave are people who have been promoted within the Public Service and who, therefore, are fulfilling an excellent job somewhere else in the Public Service. The future of the final 25% is miscellaneous. Some go to schoolteaching. Some might take overseas trips to gain further experience and then come back here and use their experience for the good of the country. Some have come out from England or Europe and have returned home. Some are just plain retirements.

The whole trouble is that the very success of the Bureau of Mineral Resources has led to the present problem. It is the tremendous success which has followed the work of the BMR in so many fields and led to this quite extraordinary development of minerals in Australia which is putting this pressure on the number of geologists. We cannot expect to discover vast quantities of iron ore, bauxite, oil, manganese and phosphates and still get along with the number of geologists that we had before discovering them, lt is the work of the BMR which has brought about this situation. At the end of the last war many people in Australia and elsewhere believed that we could never discover oil in Australia, but through the work of the top BMR scientists who started off plotting the various basins in Australia and performing geological, geophysical and seismic work, it was shown that there were ‘basins worth looking at. Companies came and looked at them and now they have had success. Naturally there is a shortage of geologists.

We were told only recently that slightly less than 50% of the geophysicists who were working in oil in Australia were Australians. However much has been done to extend the output of geologists in Australia, we cannot keep up with the tremendous demand brought about very largely by the work of the BMR which, through its various forms of encouraging and assisting mining, has made Australia one of the great mining countries of the world today. At the moment we are turning out only 100 geologists each year, but I consider that the BMR gets its fair share of that number. We have been able to recruit between 12% and 15% of these geologists. But, as I say, the demand in industry is enormous and at the moment is only about 80% met. We have been stepping up the number of universities and more and more people will be trained, but we cannot suddenly start a pipeline and expect to get out of the other end immediately the number of geologists that we want. I think Sir Ian McLennan hit the nail on the head at the Australian Petroleum Exploration Association conference when he pointed out the need in Australia for the mining industry and the oil search industry to do more to provide the sort of technically and geologically trained people who are required by industry. He said that a great deal had been done in the steel industry by the Broken Hill Pty Co. Ltd. Sir Ian said that in steel the BHP had 4,500 men in training, of whom more than 1,000 were proceeding to tertiary qualifications. He added:

I don’t know where the industry would have been if we hadn’t had a policy like this for well over thirty years.

He went on to say:

The emerging petroleum industry should be adopting policies of somewhat the same sort.

I agree entirely with him. Having heard the speech of the honourable member for Macquarie one could be excused for thinking that the Bureau of Mineral Resources was some sort of ailing organisation with low morale. The terms of the matter of urgency use the words ‘leading to the disruption of the activities’ of the BMR. This is anything but true, of course, as the results of the work that the Bureau is doing at present will show. It has stepped up its work in many fields. It had plans in the present year for eleven major regional geological surveys, but unfortunately it was forced to cancel one. Nevertheless, this is still larger than its plans for previous years. Last year it had ten major surveys, but before that only nine in 1965. In addition it has been able to do several small surveys in place of the one that has been cancelled.

Let us consider the geophysical programme of the BMR. The areas of gravity survey undertaken by the Bureau in 1966 covered about 265,000 square miles. In the coming year it will undertake gravity surveys over 450,000 square miles. On offshore seismic work in 1965 the Bureau covered 3,900 traverse miles; in 1966, because of difficulty with contractors, it did not do any; but this year it intends to undertake 16,000 traverse miles. In aeromagnetic work it covered 74,000 flight miles in 1966 as against 102,000 flight miles planned for this year. The seismic party months have been fairly similar. In 1965 there were thirteen; the number dropped to eleven in 1966; and it has risen to twelve for 1967. So there is no fall off in the quality or the standard of work that is being undertaken by this great organisation. It is a great organisation and one of which I, as the Minister in charge, am very proud. A recent decision made by the Government will undoubtedly lead to a greater output of work by this organisation. The Government intends to increase its strength by about sixty persons.

I repeat that the BMR is getting its fair share of the qualified people who become available. If we doubled the pay rate we would still lose officers. The honourable member for Macquarie suggested that we were losing the very cream in officers. Well, we are losing people whom perhaps we do not like to lose, although we are glad to see them going to the places where they are going. But if honourable members look at the facts they will see that of the twentynine who resigned in the last twelve months only one was from the Second Division and there were only six in Class III and Class IV. So it was in Class I and Class II, the more junior people, that the great turnover occurred. Twenty-two resigned from those two classes - thirteen from Class I and nine from Class II. Undoubtedly the Class II people are qualified and can lead field parties, and we do not like to lose them, but we know that they are going to jobs in which they can play a part in nation building. There is no brain drain, as it has been called, because few of these people go overseas. They go to other positions within Australia.

Mr Beaton:

– How many Class III people resigned?

Mr FAIRBAIRN:

– Two Class III people.

Mr Beaton:

– How many in Class IV?

Mr FAIRBAIRN:

– The honourable member for Bendigo can see me afterwards if he wants a few more of these figures. Salary is not the reason why these people leave. If we doubled the rate of pay we still could not prevent companies, particularly vast mining companies who are anxious to get hold of top quality people, from making bids which would be so attractive that a certain number of officers would leave the Bureau. After all, which is best. Is it better for the geological work for these vast mining companies in Australia to be carried out by Australians or better that we should hang on to officers of the Bureau and prevent them from going? I do not know how we could do this anyway. We would have to place them on bond, or something of that nature, to prevent them from leaving. I feel, quite frankly, that this is not a matter of the pay involved. Is it not better to have Australian scientists and geologists going out into the field and doing the work for these companies than to have that work done by people brought in from overseas?

Mr Luchetti:

– Is that not what the Government is doing?

Mr FAIRBAIRN:

– No. Some men come in from overseas but there are a lot more being produced locally. Incidentally, the honourable member for Macquarie said that we were losing Ph.D’s. He said these were the top men. I point out to the honourable member that this is not necessarily so. Officers with a Ph.D may easily be found in Class I. A man is not necessarily one of the top geologists merely because he has a Ph.D. He could be in Class I. Having that degree would not necessarily mean that he would be in the Second Division or in one of the top categories.

Mr Luchetti:

– Is not one of the complaints that the Government is not letting them advance?

Mr FAIRBAIRN:

– On the contrary, they get an opportunity to advance because of the turnover. They will get an even greater opportunity to advance when the additional men we intend to engage are brought in and the Bureau is reconstructed under the programme involving sixty additional officers. It is quite obvious that the action of the Opposition today is an attempt to denigrate a very great service, one that is doing something outstanding for Australia. Secondly, it is an attempt by the Opposition to use the House to bypass the arbitration machinery of the Public Service Board by bringing up pay rate demands. It would be chaotic if Parliament were to decide that because there was a need for geologists, schoolteachers or some other professional workers their pay rates ought to be doubled or at least increased considerably. All the organisations covering such people have an arbitration system, one which has worked well and favourably for Australia under every government and every political party. To suggest that we should come into this House and in some way override the arbitration system is futile. This has been a rather shabby trick by the Opposition to try to bypass an arbitration system which has worked well. It has given Commonwealth public servants a good standard of living. They have worked well and favourably for a long time under this system.

Mr CONNOR:
Cunningham

– I think that the first thing that the Minister for National Development (Mr Fairbairn) ought to do is to meet some of the professional men who are in the Bureau of Mineral Resources. The last thing that the Opposition seeks to do is to attack the organisation. The sooner the Minister informs himself of what is happening within the Bureau the better it will be for himself and for Australia and our future exports. This is not merely a matter of using this House as an alternative to the arbitration system: it is a matter of seeing that a form of professional expression can be given to men who form probably the most valuable section of the Australian scientific community today. Men are leaving the Bureau not because of salary matters but because of sheer professional frustration. That is the point that the Minister has missed completely.

In 1966 the Australian Labor Party was aware of the obvious limitations, inefficiency and dissatisfaction within the geological and geophysical sections of the Minister’s Department. We suggested that the Bureau should become a separate entity or that it should be associated with the Commonwealth Scientific and Industrial Research Organisation. It is impossible, quite impossible, to have men of professional qualifications of this type under the control of the Public Service Board and faced only with a plodding progression. These men should not be subjected to having to punch bundy clocks and to spend their time filling in forms. They are professional men. They are scientists. Their work, their brain activity, is not regulated according to a forty hour week. I do not cast any reflection whatever on the Public Service Board. The present trouble is the fault of this Government and of no-one else. It is because the Government has no proper science policy that this situation exists today. Unless and until this group of men are given separate status by an act of Parliament or are associated with the CSIRO, where they can undertake projects and continue their professional careers on a true professional basis, there will be trouble and Australia will suffer. As a matter of fact the Minister has not informed the House of the true position. He evaded the question concerning how many men were in Class III at the Bureau. I am informed that Class III is the limit to which geologists, geophysicists and palaeontologists can go with strictly professional work in the Bureau. If they progress to Class IV and Class V they then do administrative work. That is one of the defects of the entire set-up today and where it runs contrary to the original conception of the functions of the Bureau.

Today, in my considered opinion, we face one of the worst brain drains in Austraiian history. There is no industry with a greater export potential than the minerals industry. We have seen evidence, documented evidence, of a complete disruption of the activities of the Bureau. The Government has no clear idea of how to harness the efforts of scientists and technologists in Australia so as to benefit the nation in the long term. I make no reflection here on the professional capacity of the new additions to the Minister’s Department, but apparently he contemplates something in the nature of what might be considered to be a professional kindergarten because of the limited experience of these men. It is true that they need training. I might digress by saying that the Broken Hill Pty Co. Ltd, certainly takes steps in its training to ensure continuity of policy. It makes certain that it keeps these men, as far as is possible, by offering them correct professional incentives and proper monetary incentives.

The salaries being offered to these men by the Commonwealth are a professional affront to them. They are treated almost as juveniles. The salary range for commencing geologists in many mining companies is at least 50% higher - possibly more - than that paid by the Commonwealth, yet according to the functions of the Bureau, as outlined by its Director, they are required literally to prepare a policy for the future development of the Australian mineral industry. In addition the Minister believes that this reservoir of trained geologists is available for unlimited use by private industry. It is true that information should be given to outside industry but above all there should be a pool, an aggregation, of experience. A plan should be devised whereby the services of these men could be retained for the nation, not for private profit. The Minister said that everything was for the best in this best of all possible worlds.

Dr John Dunn, one of the most eminent men today in the field of metals in Australia, once said that the discovery of phosphate rock in satisfactory quantities would be of more advantage to Australia than the discovery of flow oil, yet in the phosphate section of the BMR there is at present one geologist below the rank of Class IV and one of more senior rank.

Mr Fairbairn:

– Did they find it?

Mr CONNOR:

– They may have, in small quantities.

Mr Fairbairn:

– Not in small quantities. They found enough to last for 300 years. The honourable member should pay attention

Mr CONNOR:

– I have paid the closest attention. I have examined specimens in the Minister’s own office and the Minister told me that there was a limitation on the quantities available.

Mr Fairbairn:

– Well, there certainly is not today.

Mr CONNOR:

– Let us take another field. In recent years the BMR has gathered together a group of about fifteen palaeontologists who between them have a detailed and comprehensive knowledge of all types of fossils which may be found in rocks of varying ages in Australia and New Guinea. There is nowhere in the world a group of scientists of comparable knowledge. No Australian university or State geological service has a group of palaeontologists in any way comparable to them. This group of scientists constitutes a source of knowledge of major national significance. The BMR has in fact a training function but that function must be secondary not primary, as the Minister would have us believe.

Within the limited time remaining to me may I quote the words of such authorities as Mr A. J. Keast and Sir Maurice Mawby who said that within the last twenty to fifty yean there has been a greater consumption of minerals in the world than in the whole of prior recorded history, and the forecast has been made - these men are authorities - that within the next generation we will need to at least double world production. There is an urgent need for the discovery of new ore bodies particularly of lead and zinc.

The position in relation to the BMR can be summarised in these terms: the Public Service Board is neither appropriately staffed nor particularly willing to discharge the tasks the Government has laid upon it. The Government already has a model of the type of organisation required if scientific research is to be carried out effectively. That model is the Commonwealth Scientific and Industrial Research Organisation. The whole sorry business is symptomatic of the Government’s failure to develop and implement a policy on science. The Government has no clear idea of how to harness the skills of scientists and technologists in Australia to benefit the nation in the long term. As things stand at the present time the Government, through its complacency, ineptitude and neglect is destroying the effectiveness of an important part of our scientific establishment.

Science and technology are the sinews of our nation. Without those sinews we stand only as a puppet does, supported from without and ready to collapse when that support is withdrawn. The Government is destroying those sinews of our nation. It is insidiously and gradually, but certainly, preparing Australia for a role as little more than a puppet in the years to come, years in which the calls upon our nation and the threats to its security may require us io make a dynamic response as a nation if we are to survive. Incidentally, in contradiction of what the Minister has said, no less an authority than Mr Keast said that by 1970 Australia would be able to export minerals to the value of $ 1,000m a year. Let us contrast that with the miserable, miserly, incompetent and inept attitude of the Government which is prepared to quibble and to introduce such a specious argument, through its Minister, as that this Parliament is being used as an alternative to the arbitration court. This is a matter of national importance.

Mr DEPUTY SPEAKER (Mr Failes:
LAWSON, NEW SOUTH WALES

Order! The honourable member’s time has expired.

Dr MACKAY:
Evans

– The terms in which the subject before the House has been couched and the way in which the honourable member for Macquarie (Mr Luchetti) and the honourable member for Cunningam (Mr. Connor) have addressed themselves to it provide one of the clearest evidences of political cynicism to which I have ever directed my attention. Here is an area in which this country is not only progressing rapidly but is in fact approaching boom conditions, as the honourable member for Cunningham mentioned in the last few minutes of his speech. According to Mr A. J. Keast, the authority he mentioned - incidentally Mr Keast is a personal friend of mine - we expect to be able to export minerals in the 1970’s to the value of Sl,000m a year. I support the Minister for National Development (Mr Fairbairn) who pointed out that this is evidence of the lively, active and painstaking work that has been done not only by this Government but also by private industry, both Australian owned and overseas owned. Under the inspiration and leadership of this Government both interests have been working so well in partnership that the results will be of inestimable value to Australia in the future.

We have heard this morning what I consider to be a lot of ill conceived, ill informed and mischievous statements which can only be directed at undermining confidence not only in the Government and what it is doing in this sphere but also in overseas companies. This is a behind the scenes attack on the policies and activities of overseas interests in this field. It is an attempt to make political capital out of the reactions of the civil servants of this country and to disturb the arbitration system. It is an attempt to use the House to determine wages.

Let me look at one or two fallacies thrown up in the speech of the honourable member for Cunningham. He spoke of Australia facing one of the worst brain drains in its history. Both he and the honourable member for Macquarie referred to the activities of the Bureau of Mineral Resources and particularly the number of resignations from that organisation. I know a little about this subject because for some years now I have been closely interested in minerals and what the BMR has done and is continuing to do in the field of mineral exploration and development. I say without fear of contradiction that not only is there not an undue turnover of staff in the BMR but that compared with many major companies, one of which was cited by the honourable member for Cunningham, the turnover is comparatively small. There is no reason for the alarm indicated in the Opposition’s action in raising this subject as a matter of public importance. I consider its action to be evidence of cynicism.

The honourable member mentioned that the BMR is carrying on a professional kindergarten and losing its men later whereas the Broken Hill Proprietary Co. Ltd would make sure that it kept its men in its employment for as long as possible. As head of a university college training undergraduates for work with BHP, I have had a good deal to do with the company’s policy in this regard. I know the company has a policy of not placing bonds on these men because, as Sir Ian McLennan himself told me, the company believes that they should be free to leave BHP if they wish to enter other areas of activity in the Australian economy and business world where they can make a contribution for the good of the nation as a whole. In expressing those sentiments he indicated that he was a big Australian. From my own experience I would be vastly surprised, and would challenge the honourable member’s implication, if the turnover of staff at any level he likes to mention is not as great in BHP as it is in the BMR.

Here are the facts relating to the turnover and recruiting of staff at the Bureau of Mineral Resources. The vast majority of the resignations which apparently have been the occasion for this attack were amongst staff in the very first grade of scientific officers and young geologists, geophysicists and others in the Bureau. Of the twenty-nine mentioned, thirteen were in Class 1 and nine were in Class 2, so twenty-two of the twenty-nine were in the first bracket. These young men come into the BMR for specific reasons. They come from universities to the vast enterprise of the Bureau of Mineral Resources with its tremendous accretion of knowledge and information. They gain the kudos of having been employees and scientists with the Bureau, which gives them a qualification not dissimilar to that of a young medical graduate who goes to the best hospital he can choose for his training so that he may present to the world thereafter the fact of his training in that hospital.

When these young men go to the Bureau, it knows and expects that they will be in its employ for a limited amount of time and that they will most certainly go from there into the exciting, developing mineral industry of this country. I could not understand the statement made by the honourable member for Cunningham with regard to the phosphate section of the Bureau. Surely the achievement of this section is one of the success stories of the painstaking following through of geological clues. Broken Kill South Ltd is not an overseas company, by and large. It is giving tremendous opportunities to Australia. In a smaller way my own company has been associated with this particular industry. Within Queensland’s borders is not a small deposit of phosphate rock but a vast deposit which will be of tremendous interest to our future.

I maintain, as I said earlier, that the young men who are entering the employ of the Bureau of Mineral Resources are taking up a tremendous range of opportunities that the Bureau presents to them. They are being trained for Australia’s future and not for a purely bureaucratic or restricted occupation. I believe that the Government is moving in exactly the opposite direction to that which the honourable member for Macquarie maintained. He said that on the one hand Sir Ian McLennan called for more experts but that, on the other hand, the same call was being frustrated by this Government. I have yet to see any reasonable presentation of an argument that starts as far back, if you like, as the Government’s entry of the field of tertiary education - of aid to universities - with its underwriting of the development and security of training at university level. From there on, opportunities are provided with the Bureau of Mineral Resources, and by the States through their Mines Departments, for many young men to enter worthwhile careers.

Approximately 100 geologists are turned out each year by Australian universities. Between 12% and 15% of those young men see fit to seek employment with the Bureau. We were told a lot about resignation figures over the last few years but no mention was made of recruitment figures. We were told, for instance, that there were twenty-nine resignations in 1966-67; but the thirty-one recruitments to the group of geologists, geophysicists and other professions were not mentioned. We were told of people who go out at the top level of the BMR - there are precious few of them - into private industry. What is wrong with that? The same thing happens to the universities and private industry. I refer, for example, to Professor Eric Rudd in Adelaide, who is one of our leading geological thinkers. He was trained by the Broken Hill Pty Co Ltd, and he served with that company. I could mention many others who have moved from one company to another with the full understanding and blessing of the companies they have left. I refer to men like Clem Knight of Conzinc Riotinto of Australia Ltd, who was formerly with Mount Isa Mines Ltd; Mr Rogers of Noranda Exploration Co. Ltd; and Basil Lewis of Broken Hill South Ltd. All these people have reached the top of the tree in the exciting minerals field and have served with different companies. They have moved around, learning more about the geology of Australia. This is far from being a brain drain. It is a cross fertilising and an enriching of the whole experience and knowledge of people with regard to our national resources.

I just cannot treat seriously the overt suggestion of the Opposition in raising this matter of public importance. I believe that something rather different is behind it. Perhaps the motive was hinted at by the honourable member for Macquarie and the honourable member for Cunningham when they began to refer to the Commonwealth Scientific and Industrial Research Organisation in a plea for a particular relationship between the scientists of the Bureau and CSIRO, or the establishment of a separate department for them.

I venture to say that on this occasion the Labor Party has laid itself open to a charge of simply being a lobby for a particular tiny section of people who want to see such a relationship develop in contradistinction to the whole field in which scientists are employed in the Commonwealth Public Service. The honourable members referred to these particular scientists as though they are to be distinguished from the highly qualified masters and doctors of the related sciences who are employed by the Department of Supply, the Department of Health - with its biochemists and chemists - the Bureau of Meteorology and many other sections of the Department of National Development. I believe that as we go through the whole spectrum we find that these scientists - many of them highly qualified - represent the substance of our Commonwealth Public Service.

Mr DEPUTY SPEAKER:

-Order! The honourable member’s time has expired.

Mr COLLARD:
Kalgoorlie

– The honourable member for Evans (Dr Mackay) seems to be interested only in the affairs of the Broken Hill Pty Co. Ltd and other big organisations. I would like to point out to him that the boom to which he referred was made possible only by the work of the Bureau of Mineral Resources. Unlike the honourable member for Evans and other Government supporters, we of the Opposition are interested in ensuring that the work of the Bureau can continue to be conducted in a very efficient manner. It has been obvious for some time that a very serious situation has been developing within the Bureau of Mineral Resources. A large number of officers of the Bureau - men with a wide knowledge in the fields of geology and geophysics - have resigned. The seriousness of the situation was proved beyond doubt this morning when the honourable member for Macquarie (Mr Luchetti) read a statement prepared by the Professional Officers Association. That statement not only sets out the seriousness of the situation but also it is very critical of the fact that that situation should be allowed to continue.

An examination shows that from the Geological Branch, the Geophysical Branch and the Petroleum Exploration Branch of the Bureau there were 106 resignations in the period from 1960 to 1965 inclusive. Since then thirty-seven more officers have resigned, and I believe that twenty of them have resigned this year. Practically all the officers who have resigned have had a wide experience in their particular fields. For instance, twenty-four of the geologists who have resigned since January 1966 had between them experience amounting to 200 man years or an average of almost nine years apiece.

Since January 1966 twelve geophysicists, each with an average of ten years experience, have resigned, as have two mineral economists and one petroleum technologist with an average experience of just over ten years each. Certainly, as the Minister for National Development (Mr Fairbairn) has said, it has been possible to recruit some replacements, but those replacements have not the experience of the officers who have resigned. For instance, in return for the loss of geologists with a total of 200 man years experience, twentytwo others with a total of only eleven years experience between them were recruited - if that is the correct word to use. That is not intended to be a reflection on the recruits, but the pity is that while the present situation is allowed to continue those recruits will also be lost as soon as they gain a little further experience

Notwithstanding the seriousness of the position, the Minister and the Government treat it as though it is just something that must be accepted and cannot be corrected. The Minister has told us quite unconcernedly that the Bureau has always been regarded as being a training ground for young geologists and that they are not expected to remain after they have gained two or three years experience with the Bureau. In the summary of activities of the Department of National Development for the years 1963-1965, under the heading Bureau of Mineral Resources, Geology and Geophysics’ is a minute which states:

Increasing demands for geologists and geophysicists by industry have made it difficult to maintain a full staff in the Bureau. However, as it is a condition that is symptomatic of a successful and healthy industry, it is a difficulty that has to be accepted philosophically.

It is clear that the Minister and the Government treat the difficulty as though it were insurmountable and as though it were a situation that the geologists and other officers want. If any heed is taken of the Minister’s implications, the conclusion must be reached that the scientists referred to do not want to remain with the Bureau, and that it is their wish and intention to resign as soon as they have been with the Bureau for two or three years. I do nol accept that outlook as being correct. I believe that many of the geologists and geophysicists would prefer to remain with the Bureau if the real reasons for resignations were overcome. I suggest that the statement prepared by the Professional Officers Association supports that view.

If we simply accept the suggestion that the resignation or loss of officers is the result of a healthy and successful mineral industry, we must face the conclusion also that, in the very near future, we will have in the Bureau only a few geologists and geophysicists with experience in or know ledge of the mineral field. This must be so because there is certain to be a continuing and increasing demand by private enterprise for people with any reasonable experience of mineral discovery and development. The mineral potential of Australia has hardly been touched. There is always something new being discovered, not only with regard to minerals themselves but also with regard to the means and the methods of discovering those minerals. Minerals which were not given any importance and which in fact were hardly known a few years ago now have become very valuable and much sought after. Large areas of country - thousands of square miles that a few years ago were not considered to be important at all from the mineral point of view - have been reserved now for exploration. The exploration of these reserves will be carried out by people such as those who are in the Bureau of Mineral Resources. There will be an increasing demand for these people.

Mr Deputy Speaker, 1 agree that the Commonwealth Government has a very important duty to perform. This stems from the importance and value of mineral discovery, development and output, and the subsequent value of our mineral exports. The Government can perform its duty in a proper manner only through the efficiency of the Bureau of Mineral Resources. Let us have a look at the functions of the Bureau. They are:

  1. To explore for, investigate and encourage the development of, mineral deposits;
  2. To survey and assess the mineral resources of the Commonwealth and its Territories and to initiate and investigate proposals for their development;
  3. To interpret the results of completed surveys and recommend ways of remedying or meeting mineral deficiencies that may become apparent, and to advise on all aspects of the mineral economy of Australia, including the best utilisation of mineral resources in tha national interest; and
  4. To carry out geological and geophysical surveys and investigations and advise on all aspects of applied geology and geophysics.

Anyone with any knowledge of minerals would quickly realise what was required to discharge these functions and certainly would not suggest as the Minister for National Development has done that they can be efficiently carried out by a team of what he was pleased to call ‘j acker 00S

I agree that the value of future mineral output makes it important that the Government ensure that experienced geologists and others should be readily available to the mineral industry generally. But the functions of the Bureau are equally important for the very same reasons and to carry out those functions it is very necessary that the Bureau have at its disposal at all times a complete staff of qualified and experienced officers. Why should the Bureau be the training ground and the milch cow for private enterprise and overseas companies if this has an adverse effect upon the efficiency of the Bureau? Why cannot requirements of private enterprise be provided from elsewhere - schools of mines for instance? The School of Mines in Kalgoorlie has a record second to none. Any person who holds a certificate or diploma from that School is not only acceptable but also is in wide demand not only in Australia but also all over the world. It may be possible - I do not know; but I certainly think it is worth examination - that if the Commonwealth and private enterprise, such as those companies interested in oil, were prepared to assist the School of Mines to extend its activities, it could provide the necessary experience and training to a sufficient number of people to satisfy the demands of industry or at least to prevent the drain on the Bureau of Mineral Resources. Incidentally, the Chamber of Mines in Kalgoorlie now makes quite a substantial donation of assistance to the School of Mines in that regard.

While such a move might solve outside demands, it would not solve, unfortunately, the problem within the Bureau itself. As I said earlier, I firmly believe that a large number of the staff of the Bureau would prefer to remain with the Bureau. The main reason they do not do so is that there is no room for advancement or promotion. There are other reasons also. But once a person reaches the position of Geologist Class 3 he is at about his limit. I believe that there are only ten positions in the Bureau above that classification. Even if a member of the staff of the Bureau should be lucky enough to advance higher he must cease doing original scientific work. Naturally enough, this would not appeal to many because it is the active scientific work that is most attractive. Also, the salary range is far below what is available elsewhere, although this is not the main reason for the dissatisfaction of the staff of the Bureau. The salary of a Geologist Class 3 is approximately $6,000 to $6,600 per annum. This is not a very attractive amount for people who have the ability and qualifications to demand half as much again elsewhere.

I understand also that in the Commonwealth Scientific and Industrial Research Organisation men doing similar work, and with experience and qualifications similar to those of the staff of the Bureau of Mineral Resources, not only receive higher salaries but also enjoy opportunities for further advancement. In addition, these men may still remain in active scientific capacities and not simply become bogged down on the administration side. This is a completely different situation to that in the Bureau of Mineral Resources, but one that would be much more satisfactory to the Bureau’s officers who at this moment are obviously disenchanted, dissatisfied and discontented with present conditions.

Mr DEPUTY SPEAKER:

-Order! The honourable member’s time has expired.

Mr WENTWORTH:
Mackellar

Mr Deputy Speaker, I must confess that I am puzzled. I do not know quite what the Opposition is complaining about in this discussion. Is it complaining that Australia’s mineral resources are not being developed? Why, the Opposition itself only a few moments ago said what an extraordinary development had taken place regarding our mineral resources. Is the Opposition complaining that the Bureau of Mineral Resources has not contributed to this development? The record stands quite to the contrary. The Bureau of Mineral Resources has played a tremendous, creditable and distinguished part in promoting this development whose start we are seeing now and whose future perhaps we can dimly perceive.

Is the Opposition complaining that the Government has not co-operated with and given support to the Bureau of Mineral Resources? It is perfectly true that the nucleus of this organisation was formed back in 1946. But the whole of the development of the organisation has taken place under the present Administration. This Government has been in power since 1949 and this is the history of the Bureau. Indeed, it is not perhaps out of place to remark that Sir Harold Raggatt, who was the head of the Bureau of Mineral Resources, subsequently became the head of the Department of National Development. Is the Opposition complaining that Sir Harold Raggatt was not conscious of the problems of the Bureau? This would be ridiculous.

What is the Opposition complaining of? Frankly, I do not know. It says that there has been an excessive turnover of officers in the Bureau. But the figures do not support this argument. The figures show that the turnover of staff in the Bureau is, if anything, a little less than the turnover in private industry and in other outside bodies that are in a similar field. The figures do not support the contention of the Opposition that an excessive turnover of staff has taken place. Surely the Minister for National Development (Mr Fairbairn) was right when he put to the House that a certain degree of staff turnover was a good thing.

The Bureau of Mineral Resources is an organisation that exists to make effective the knowledge that it has. Apart from the information that it receives on a confidential basis from private industry and which therefore it must keep on a confidential basis within limits, the Bureau has no secrets. Its business is not to accumulate secret knowledge but to accumulate as much knowledge as possible with a view to its dissemination. Is not one of the best ways of disseminating this knowledge to put out into industry and among the companies that will use this knowledge the people who have the knowledge? This is a way of disseminating the information which the Bureau has accumulated. This is a way of making effective the purposes which were read out by the honourable member for Kalgoorlie (Mr Collard) a few moments ago and for which the Bureau was founded. It is not just an academic body. It is a body to make a survey of Australia’s mineral resources, to extend our knowledge of those resources, and to apply that knowledge for the production of extra minerals in Australia. This is what the Bureau is doing. One of the ways in which it can do this is to exchange with industry people who have knowledge. This is not confidential knowledge. It is knowledge which is available to any inquirer at the Bureau. It is available on the open files of the Bureau for people who want to go and consult those files. But it is also most effective when it is made directly by contact with the people who are producing minerals.

Is not the great objective of the Bureau to increase as much as possible the production of minerals from our Australian fields? What is the Opposition complaining of? I have shown that it has no complaint concerning excessive turnover of personnel. A moment ago the honourable member for Kalgoorlie was extolling the possibility of some kind of contact between the Bureau and other outside organisations, and rightly so, but if he does this, why does he complain? Frankly, I am puzzled. I cannot see what all this pother is about. Surely members of the Opposition should be getting up and congratulating the Government on what it has done, congratulating the Bureau on the great success which it has achieved and congratulating Australia on the amount of increase in our mineral production. We were told by the honourable member for Macquarie (Mr Luchetti) that it was not a case of salaries primarily. I think that the words of the honourable member for Macquarie were belied a little, perhaps, by the contention put forward by the honourable member for Cunningham (Mr Connor) and the honourable member for Kalgoorlie, but I suppose it is no novelty in this House to find spokesmen for the Opposition contradicting themselves.

Let me take the viewpoint of the honourable member for Macquarie who after all was the proponent of this urgency proposal. I suppose I should accept his official view of what it is about. He says that this is not primarily a matter of salaries. The main thing is the ineptitude of the administration. I think that was the phrase he used. He took it, I believe, from a statement by (he Professional Officers’ .Association, but he adopted it. One of the things which he may perhaps in charity realise is that in a position of great expansion such as we have at the moment, when industry is expanding and when the Bureau, in accordance with the figures which the Minister has given, is expanding its activities, there must be some kind of disorganisation. These are growing pains.

Perhaps the honourable member was a little out of date because it is true thai eighteen months ago the Bureau moved its headquarters, very properly, from Melbourne to Canberra. I think I am right in saying that at that time, in its administrative division, nearly half the people concerned left the Bureau because they did not want to give up their Melbourne residence and take up residence in Canberra. I think it is true to say that at that time there was some kind of disorganisation consequent upon the movement of the Bureau’s headquarters. This no doubt caused disorganisation through the whole of the apparatus. But this is inseparable from the kind of forward move which the Government was making. This is one of the penalties of growth. Does the honourable member for Macquarie think that the organisation’s headquarters should not have been moved from Melbourne to Canberra? Does he think that this could have been done without some kind of disorganisation and disruption? I do not think that he is so simple as to think that.

The honourable member for Kalgoorlie complained that there were no opportunities for advancement in the organisation, and at the same time he complained thai people are resigning. Obviously, when people resign the opportunity for promotion arises. His argument cuts back on itself. I do no! intend to labour these points. I think it is clear enough to the House-

Mr DEPUTY SPEAKER:

-Order! The honourable member’s time has expired. This discussion is now concluded.

Sitting suspended from 12.46 to 2.15 p.m.

page 752

SUSPENSION OF STANDING ORDERS

Motion (by Mr Snedden) - by leave - agreed to:

That so much of the Standing Orders be suspended as would prevent Notice No. 1, General Business, being called on forthwith and consideration of the Notice being continued until 3.15 p.m.

page 752

QUESTION

PUBLIC SERVICE

Sir Wilfrid Kent Hughes:
CHISHOLM, VICTORIA · LP

– I move:

That this House approves of the principle of equal pay for equal work for men and women officers of the Public Service and requests the Government to amend accordingly Regulations 104, 105, and 106 under section 30 of the Public Service Act.

Mr Speaker, I thank the Government and the Opposition for suspending Standing Orders and thus permitting this subject to be discussed. This is the first time in my recollection since coming into this House in 1949 that such a compliment has been paid to a private member. I appreciate this, not so much for myself as for the fact that it underlines and emphasises the importance of the motion. Regulations 104, 105 and 106 fix the basic pay for men and women officers in the Public Service.

When we were young and full of enthusiasm most of us at one time or another wanted to reform the world in twenty-four hours. I think we rather worked in those days on the basis of Omar Khayyam’s philosophy:

Ah Love! could thou and 1 with Him conspire To grasp this Sorry Scheme of Things entire, Would not we shatter it to bits - and then Re-mould it nearer to the Heart’s Desire!

However, as one grows older one realises that many of the reforms on which we are keen take a little longer to achieve, and sometimes a great deal longer. The matter of equal pay for women doing work of equal value to that done by men is one of those reforms which have taken a great deal longer to come into operation.

Way back in the early 1930s I started, for varying reasons, to advocate the adoption of the principal of equal pay for equal work. I had been the Minister for Sustenance in the Victorian Government - Minister for Susso I was called - and had been administering the payment of unemployment relief during the big depression. It was a very saddening and sobering yet educational experience. 1 am glad that today the problem is more one of overfull employment than under employment, but the fact remains that in the trials and tribulations of the 1930s one learned a great deal. I hope that we in this country will continue to be able to put into practice policies that lead to a condition of practically full employment.

Arising out of my experiences I became convinced that a policy of equal pay for equal work should be adopted and should have been adopted earlier. There was nothing original in my attitude even at that time. Agitation for such a policy started back in 1916 - certainly in the early 1920s - so I do not claim any originality. But in those bygone days 1 kept some statistics dealing with unemployment as it affected both men and women, the industries in which the unemployment arose and the ages of those who were unemployed. The first thing that startled me happened in 1931-32 when, notwithstanding the already far too high incidence of unemployment, 12,000 more men lost their jobs in Victoria in that year but 6,000 more women were able to find employment. I came to the conclusion that’ one of the troubles was that women were paid less than men and that where a job could be done by a woman as efficiently as by a man, the principle of competition on unequal rates of pay entered into the scheme of things. Often a young man would be walking the streets unable to get work while his fiancee had a job, only because she was paid less than a man.

Lest anybody claim that I am now try ing to obtain publicity by bringing up this matter, I point out that 1 wrote two articles for the Melbourne ‘Herald’ which were published on 3rd and 4th April 1934. One paragraph of one of the articles has relevance to the motion I have moved, lt read:

The question is not whether a woman’s place is in the home, but whether many women are employed in preference to men because they arc more efficient or because they .ire paid less If they do a man’s work why should they receive less?

The result of my article was rather astounding. I was pulled to pieces by the employers. Perhaps the Opposition will say that is not surprising. But I was pulled to pieces also by the leaders of the Trades Hall, which to me was surprising. I was criticised severely by Professor Herbert Burton, who is well known to many honourable members and who was then, I think, Professor of Economics at Melbourne University. I was pulled to pieces by the leaders of the Australian Labor Party. The fact that the Opposition now supports the motion and even tried to forestall anything I might have said on the subject by getting the leader of the Labor Party in the Victorian Legislative Council to move yesterday a similar motion seems to me quite significant. However, the fact that members of the Opposition have been converted over the years so far as this subject is concerned leads me to hope that some day I may be able to convert them to my way of thinking as to what should be done for security and regional co-operation and development in South East Asia.

Mr Beazley:

– The Labor Party moved a similar motion in 1901.

Sir Wilfrid Kent Hughes:
CHISHOLM, VICTORIA · LP

– It may have, but it went bad afterwards. Why did these people criticise me in 1934? Apparently the Labor Party was going backwards instead of forwards. Perhaps I helped it to see the error of its ways.

However, 1 had a few supporters in those days. One letter of support came from a woman who signed herself ‘Home First, Career Next’. I will not read everything she said, but she wrote in part:

Men have only themselves to blame - the remedy lies in their own hands. Women do not control the Wages Board. Equal pay for equal work would soon solve the problem of women in industry.

Come on - you men. It is up to you to arouse yourselves. Women like real men but they wipe their feet on doormats.

I was very grateful for the support I received at that time. It came mainly from what would be termed lightweights, not from the other four sections of critics - the professors, the Trades Hall leaders, Labor Party leaders and employers.

I have with me a massive amount of documents dealing with this matter and dating from 1934 to the present day. I will try to summarise their contents as briefly as possible, referring only to the main features. During the Second World War, owing largely to the scarcity of men for employment, there was a movement to bring women into employment and pay them the male rate for the jobs they were doing. But that situation did not last very long after the war. In 1949 the Government introduced legislation to give the Commonwealth Court of Conciliation and Arbitration power to fix a basic wage for women. The Court then held a general inquiry into the basic wage for both sexes. It is interesting to note that in March 1950 the then Minister for Social Services, Senator Spooner, said that it was a mistake to suppose that the basic wage was calculated on a needs basis, although some account was taken of needs. The Minister went on to say that the Court’s object was to ascertain the highest basic wage that industry could bear. At that time the Court decided against equal basic wages, the arguments having been largely related to needs, and awarded 75% of the male basic wage to women, mainly because that was the prevailing rate. It is interesting to read Mr Justice Foster’s comments. He pointed out that the women’s case was not very well presented to the Court and said that the unions should have claimed a unit wage instead of a social wage based on needs, but as this might have resulted in a lower male basic wage the unions’ failure was easily understood. He added that such an approach would need the aid of Parliament and was beyond the power of the Court.

The next important event was in 1951, when the International Labour Organisation adopted a recommendation for equal remuneration for the sexes. So far as I know, this has not yet been ratified by the Australian Parliament. In October 1953 the then Minister for Labor and National Service, now the Prime Minister (Mr Harold Holt), explaining the failure to ratify, said that the Commonwealth Government did not oppose the principle of equal remuneration but considered that it would be undesirable and unsound to propose legislation for the adoption of this principle in advance of a determination to like effect by the Commonwealth Court of Conciliation and Arbitration. The Commonwealth is the nation’s biggest employer, and I feel that it should set an example by giving equal pay to its own male and female employees in the Public Service. In 1955, the then Prime Minister, Mr Menzies, in answer to representations made to him, more or less repeated what had been said by the Minister for Labor and National Service in 1953. In 1956, Mr Allan Fraser, the then member for Eden-Monaro, asked in the Parliament:

In view of the action of the United Kingdom Government in introducing equal pay for men and women employees in the Public Service, does the Australian Government intend to carry out the recommendations of the International Labour Organisations and introduce equal pay among ils own employees?

To this question, the Treasurer, Mr Fadden, replied in much the same terms as the then Prime Minister had replied. He said it was a matter for the Commonwealth Arbitration Court. We see the sort of buck passing that has been going on for about twenty years now. The Government says that equal pay is a matter for the Arbitration Court and the

Arbitration Court, to a certain extent, says that it is a matter for the Government. I am of the opinion that if there were a free vote in this House today not a single member would vote against the principle of equal pay. Is there anyone who would vote against it? I do not propose to push this matter to a vote because I did not introduce the motion to annoy the Government or to try and defeat the Government. I know that members of the Opposition would like to do so, and possibly that is the only reason why they support the motion. My purpose is to bring to the attention of the Government the contention that now is the time to take action in respect of the Public Service. The present Prime Minister, when he was Minister for Labor and National Service in 1953, said that the Government agreed with the principle. I ask the Government to take this action now with respect to its own employees in the Public Service. As I said earlier, I am nol out just to annoy the Government. I am after the objective, not publicity for the member for Chisholm.

The principle of equal pay was put into effect during the last war but immediately that war had ended we went back to the old principle that women should be paid a basic wage less than that of men. With regard to marginal increases, women are now receiving largely the same treatment as men, but they still receive only a percentage - of the male basic wage. As a result, in industry and in the Commonwealth Public Service a woman who is doing the same work as a man is penalised to the extent of S400 to $420 a year. Women receive the same wages as men in professions such as the medical profession and, I presume, the legal and other professions.

In 1955 Great Britain adopted the principle of equal pay for equal work by men and women employees in the Civil Service, the teaching profession and similar professions. I understand that the United States of America also has adopted the principle and is putting it into practice. In Australia, New South Wales has put the principle into practice with regard to teachers and some, if not all, of the State public servants. I think I am right in saying that in Queensland the principle was put into practice in 1916, although the industrial arbitrator seemed to have some doubt about what should be regarded as equal work. In Tasmania, the Lower House passed a resolution adopting the principle, but the resolution was defeated in the upper House. The principle of equal pay for equal work has eeen adopted partially within Australia, and that is another reason why I feel that the Commonwealth Government should set an example by adopting the principle in the Commonwealth Public Service.

I hope we will not go on with this game of battledore and shuttlecock, with the Government saying that it will not do anything until the Commonwealth Arbitration Commission acts on this principle, and with the Commission saying, if it still agrees with Mr Justice Foster, that it is a matter for legislation in the first place. It reminds me of a humourous verse written on the invasion of the Lowlands by Britain about the end of the 17th century:

Lord Chatham, with his sword drawn

Stood waiting for the Earl of Strachan;

Sir Richard, longing to be at ‘em,

Stood waiting for the Earl of Chatham.

Those lines seem to describe exactly the attitude that has been adopted on this matter by this side of the House and also by the other side of the House. Honourable members opposite have not been pressing the question. So let us not start criticising each other on this. Let us decide whether we are in favour of putting this principle into operation in the Commonwealth sphere in the same way as it has been put into operation in Great Britain, America and some of our own States. Let us decide whether we are in favour of ratifying the International Labor Organisation Convention of 1951. The Government believes in the principle. The present Prime Minister said so in 1953. Therefore, at this stage I think we should give a lead by applying equal pay to our own employees. I suggest that we follow the example of Great Britain and apply the principle gradually. Great Britain brought in equal pay for equal work over a period of about six years, but perhaps six years would be too long. The principle could be applied gradually so that at the end of five years it would be in full operation, with little or no dislocation of the economy. I do not think it is necessary to give the House a lot of figures, because I think most of us know the position that exists today. I will leave time for others to talk. I will not go any further into the matter, but I remind the House once again of the words of Home First, Career Next’ who wrote:

Come on - you men! It is up to you to arouse yourselves. Women like real men but they wipe their feet on doormats.

Mr SPEAKER (Hon. W. J. Aston)Order! Is the motion seconded?

Mr Killen:

– I second the motion moved by the honourable member for Chisholm and reserve my right to speak in the debate.

Mr HAYDEN:
Oxley

– We on this side of the House support the motion moved by the honourable member for Chisholm (Sir Wilfrid Kent Hughes). For the information of the House, and of the honourable member in particular, I say that we will co-operate to the maximum to facilitate a vote on this very important issue. Unfortunately, the honourable member for Chisholm has made it fairly clear that although he is prepared to pay lip service to this important principle he is not prepared to back that up with practical support of any action that we might take. I was interested to note his claim that in his time in this House - that is, since 1949 - this is the first occasion on which a private member has had an opportunity to introduce a motion on equal pay for the sexes.

Sir Wilfrid Kent Hughes:
CHISHOLM, VICTORIA · LP

– I said that this is the first time a private member’s motion has been debated outside the time laid down for private members’ business.

Mr HAYDEN:

– I did not quite hear that interjection. The point is that this matter has been debated on numerous occasions at the instigation or initiative of the Labor Party. I cannot help wondering how sincere or purposeful the honourable member is in putting this motion before the House, firstly, because he says that he would not be keen to see it go to a vote and, secondly, because of his record in this House. He has been here since 1949. He has had plenty of opportunities to do something about this matter before.

Or Gibbs - So has the honourable member for Oxley.

Mr HAYDEN:

– In fact I have done something about it. The honourable member for Bowman probably missed that, although I have spoken on the subject of women’s rights several times in this chamber. Despite the fact that the honourable member for Chisholm has been here since 1949 and the fact that the subject of equal pay for the sexes has been debated here not once but probably a dozen times, he has never taken the opportunity to speak in support of the motions that have come forward, and when a vote has been taken in connection with those motions he has never taken the opportunity to align himself wilh the Ayes.

For the information of the honourable member for Bowman (Dr Gibbs) and anyone else who is interested, I point out that in 1965 I moved a private member’s motion on the need to eliminate discriminatory practices against women on the basis of marital status. In the course of the debate, in an endeavour to have a vote taken on the original motion, a motion was moved that the question be put and the honourable member for Chisholm voted against that motion on a matter which was not seriously in conflict with what he is now pressing. He is now saying that he stands for equal pay for the sexes for equal work and that this principle has always been near and dear to his heart. In October 1966, in the Committee stage of the debate on a Public Service Bill the present Leader of the Opposition (Mr Whitlam), who was then the Deputy Leader of the Opposition, proposed an amendment that equal pay be given for equal work in the Public Service. That amendment was defeated in a vote. And who voted against that amendment? None other than the honourable member for Chisholm, the man who now claims himself to be a staunch defender of this principle. I repeat that he has had plenty of opportunities to speak in support of this principle before, but he has never done so. He has had plenty of opportunities to engage in debates on this subject, but he has never done so. On the occasions when there has been a vote on this subject he has voted against the principle.

Mr Griffiths:

– Now he does not want to put it to a vote.

Mr HAYDEN:

– That is right. But he is no worse than other members of the Liberal Party who say that as a matter of policy they are not opposed to equal pay for the sexes but who in practice do everything they can to hinder the progress of any action that is taken in this chamber lo have this principle implemented.

In the Senate last year the then Leader of the Opposition there moved an amendment to the Public Service Bill. That amendment provided for equal pay for the sexes in the Commonwealth Public Service. All Government senators who were present voted against it. Of course, they included all the Liberal Party senators, who in turn include the women senators - Senators Dame Annabelle Rankin, Breen and Wedgwood. Just how sincere are these people?

Mr Beazley:

– They have equal pay themselves.

Mr HAYDEN:

– Of course they have. That is probably enough emancipation. May I be excused for suggesting that the honourable member for Chisholm is an admittedly scruffy but nevertheless real paper tiger in this House on these important social issues. He has an opportunity to do something effective on this issue, but he not only has made it clear that he will not-

Mr Snedden:

Mr Speaker, I raise a point of order. The reference made by the honourable gentleman to the honourable and gallant member for Chisholm is offensive to him and to the forms of the House. I ask that it be withdrawn.

Mr SPEAKER:

-Order! The honourable member for Oxley will withdraw his remarks about the honourable member for Chisholm.

Mr HAYDEN:

– Which remark? ‘Scruffy’? You do not like ‘scruffy’, Mr Speaker?

Mr SPEAKER:

-The words ‘scruffy’ and paper tiger’.

Mr HAYDEN:

– I am willing to withdraw the words ‘scruffy* and ‘paper tiger’. The refusal of the Government to act on this proposition is in complete derogation of its commitment to the Universal Declaration of Human Rights.

Mr Irwin:

– Ha, hat

Mr HAYDEN:

– What is funny about that? The Minister for Territories (Mr Barnes) almost went into a paroxysm.

Mr Beazley:

– It was the honourable member for Mitchell.

Mr HAYDEN:

– I withdraw my comment about the Minister for Territories; it was the honourable member for Mitchell. The Universal Declaration of Human Rights stipulates that everyone, without any discrimination, has the right to equal pay for equal work. The eleventh session of the General Assembly of the United Nations in 1957 adopted article 7 of the draft international covenant on economic, social and cultural rights, which recognises the right of everyone to enjoyment of just and favourable conditions of work including fair wages and equal remuneration for work of equal value without distinction of any kind, in particular of women being guaranteed equal pay for equal work. These are international statutes. But Australia refuses to act on them. We go into the theatre of the world and say that we stand behind the United Nations and its charter; but when we get home and have the opportunity to take some practical action to fulfil the obligations that we undertook under the international charters we do nothing about them.

The International Labour Organisation constitution of 1919 proclaimed the extreme importance of equal remuneration for work of equal value. The preamble to the constitution as amended in 1948 reiterated that. But still we see no action from the Government. Convention 100 of the International Labour Organisation of 1 95 1 clearly commits the Government to the use of the facilities that are available to it to introduce equal pay for equal work. The second paragraph of article 2 of that Convention states:

This principle may be applied by means of -

national laws or regulations;

legally established or recognised machinery for wage determination;

collective agreements between employers and workers; or

a combination of these various means.

Mr Beazley:

– If the Government ratified that it would have to pay equal pay for work of equal value.

Mr HAYDEN:

– That is so. That article shows that this is not solely a matter for arbitration, as the Government frequently claims. It maintains that that is the reason why it cannot act. Other ways are available to the Government, and in fact it should use the ways that are available to it. Under

Recommendation 90 of the International Labour Organisation the Government has the following obligations:

To ensure the application of the principle of equal remuneration for men and women workers for work of equal value to all employees of central government departments or agencies;

The Government has never taken any action in that regard -

To encourage the application of the principle to employees of State, provincial or local government departments or agencies, where these have jurisdiction over rates of remuneration.

The Recommendation also calls on the Government to consult on:

  1. . rates of remuneration . . . subject to statutory regulation or public control, particularly as regards-

    1. the establishment of minimum or other wage rates in industries and services where such rates are determined under public authority;
    2. industries and undertakings operated under public ownership or control; and
    3. where appropriate, work executed under the terms of public contracts.

All of these avenues are available to the Government in implementing the concept of equal pay for the sexes. The Government refuses to accept anything. It refuses to ratify the Conventions. In October 1966 fifty-four countries had ratified Convention No. 100. Not included in their number was Australia. In fact the only progress made in this country in the introduction of equal pay for equal work regardless of sex has been made by State governments - by the Labor Government in New South Wales in 1958 and in 1965 by the Labor Government in South Australia which has now progressed well in establishing the acceptance of this concept.

As I have mentioned, the present Commonwealth Government maintains that one of the objections to its introducing equal pay is that the arbitration tribunals are the proper place for this sort of issue to be decided. In fact, however, the Government has plenty of scope for action and has used this scope before to ensure that changes of working conditions were effected by amendments of the Public Service Act and the Public Service Regulations. Perhaps I may refer the House to a statement made by the present Leader of the Opposition in 1964 when he was

Deputy Leader of the Opposition. On this subject of equal pay for equal work he said:

Turning to the Public Service, the Commonwealth can undoubtedly, if it wishes, determine the conditions of the Public Service. Until about ten years ago the Commonwealth had a legislative provision whereby quarterly cost of living adjustments were automatically applied to the Public Service. That legislation was repealed. The Commonwealth Parliament has passed laws which provide for annual leave, long service leave and workers compensation for its employees. It has passed laws for people within its authority, such as interstate seamen. It has set up tribunals for various projects and industries which come within the Commonwealth’s constitutional competence. But the Commonwealth refuses to set up specific bodies, or to pass specific laws or to take specific administrative action which will enable it to apply and promote equal pay within its jurisdiction. It is true that since the convention and the recommendation in 19S1 the Australian Council of Trade Unions, and the ACSPA, since it has been in operation, and the High Council have not sought equal pay through arbitration procedures. Those bodies all agree that the Government should take legislative, administrative and Federal responsibilities in this matter. The Government has not done so.

To this I could add that the Government has been prepared to acf and to introduce fairly radical reforms in the matter of the employment of married women and their rights in the Commonwealth Public Service, and in the provision of maternity leave for them. It did this without going to the arbitration tribunals. It merely altered the Public Service Act and the Public Service Regulations. It could do the same thing on this occasion for the purpose of introducing equal pay for equal work, the subject about which we are so concerned now.

I have noticed that Ministers, opposing this proposal in the past, have said that the States are against any implementation of equal pay for equal work. Ft seems that the Government is now using this as an excuse for avoiding its responsibilities. Again I mention the fact that the States are in fact initiating this sort of change. Additionally, Recommendation 90 and Convention No. 100 of the International Labour Organisation specifically mention other ways that are available to the Government for the implementation of this sort of proposal. What is the Government’s real attitude. When the Labor Government in New South Wales introduced equal pay for equal work in 1958 the Liberal-Australian

Country Party Federal Government, through its spokesman, the present Prime Minister (Mr Harold Holt), who was then Minister for Labour and National Service, indicated that it was quite distressed. On that occasion the right honourable gentleman said:

It would in our view be doubly unfortunate if one State should act on its own in this matter, first because . . . Commonwealth governments, irrespective of party, have followed the course of leaving such issues to be determined by the industrial tribunals … my second reason for saying so is that undesirable economic and industrial repercussions must inevitably result . . Employment generally in that State would be prejudiced and employment opportunities for its women, in particular, would undoubtedly be reduced.

Mr Willis, a Liberal Minister in the present New South Wales Government, and at that time in opposition in the State Parliament, made some observations that reflected the true philosophy of the Liberals on this issue. He said that this sort of proposal was wrong and that it should not be adopted by the Labor Government in NJ South Wales. He declared that equal pay for women represented a bribe to women electors; that it was designed to protect men’s jobs; that it would create unemployment for women; and that if it did not cause unemployment it would have a serious impact on marriage and birth rates and penalise married men and their wives. None of these things have happened in any place where equal pay for women has been adopted. In about 1942, the Labor Government in the Commonwealth sphere tried to establish an Australian women’s employment board. Its move was twice defeated by the forerunner of the present Liberal Party of Australia, which at that time had a majority in the Senate. Sir Robert Menzies, the previous Prime Minister, has conceded that women have an unanswerable case and are entitled to expect equality and the rejection of discrimination. On one occasion he said:

  1. . The women of Australia have established an unanswerable claim to economic, legal, industrial and political equality.

Unfortunately he became a little mixed up in these semantics. He used the word unanswerable’ to mean ‘not desired to be answered’. So this Government has done nothing about introducing legislation to provide for equal pay for women. One can only wonder whether the Liberals who sit opposite are the liberals that they claim to be. Are they not more truly the great reactionaries of the present day?

On previous occasions I have heard an argument that the introduction of equal pay would cost a lot of money. There would be problems of course. No-one expects equal pay to be introduced overnight. But these problems about which the Government talks are not insuperable. The ‘International Labour Review’, in issue No. 2 of 1960, stated that experience to that date in countries, industries and firms in which the equal pay principle had been applied suggested that the problems that arose could be mct without undue difficulty. It added that on the positive side equal pay was no doubt good for the morale and productivity of women and by relieving men of the fear of being undercut by women might make for greater job satisfaction all round. The present Treasurer (Mr McMahon), who is a former Minister for Labour and National Service, is unimpressed by this view, however. In 1964 he said that the introduction of equal pay would cost £200m a year. I believe that he was exaggerating in a most gross and extravagant way purely for propaganda purposes.

One of the reasons why we must see that equal pay is introduced is that it provides an incentive for women to move out of the less skilled jobs to which they are confined at present. It is undeniable that unequal pay discriminates against women, because it discourages them as a class from undertaking longer education and vocational training. We have a responsibility in this matter. Concomitant with our responsibility for the introduction of equal pay for women for work of equal value we have to see that reforms of this kind are undertaken if we are really to be able to claim that discrimination is being eliminated from the Australian community. It has sometimes been argued that the employment of women involves higher costs than the employment of men because the turnover of labour is higher; women are less efficient; they are subject to more absenteeism; they are less versatile; they are physically weaker; and so on. Honourable members may be interested to know that a survey undertaken in England not long ago revealed that most absenteeism of women workers was due to the illness of dependants and that in most instances fatigue came from housekeeping undertaken after a hard day’s work. Obviously, higher pay would allow, first of all, for the hire of help in the home. It would also perhaps allow for the purchase of labour saving devices the use of which would help to reduce fatigue. Blandy, writing in the ‘Journal of Industrial Relations’ in 1963-64, suggested, however, that women have a rate of absenteeism from work of only 1% to 2% higher than that for men.

On the issue of the alleged lower efficiency of women, a considerable amount has been written. It clearly indicates that, given proper encouragement and incentive, with due regard for the kind of work that women can undertake, their working efficiency compares favourably with that of men and that arguments of this kind are based much more on bigotry and traditional bias than on facts. The year 1968 will be Human Rights Year. The Government will then have an opportunity to display its sincerity in having endorsed various United Nations charters, including the Universal Declaration of Human Rights, by introducing legislation that will provide for equal pay for equal work for the women of the Commonwealth of Australia. The most appropriate initial move would be for the Government to implement this principle in the Public Service.

Mr SNEDDEN:
Minister for Immigration · Bruce · LP

– The honourable member for Oxley (Mr Hayden) chose to make remarks about the honourable member for Chisholm (Sir Wilfrid Kent Hughes) which were quite unseemly and which ill befit him. He said that he doubted the sincerity of the honourable member for Chisholm.

Mr Hayden:

– I did not say that.

Mr SNEDDEN:

– Yes, the honourable member did. The honourable gentleman from Chisholm has served this nation in State and Commonwealth politics for a great number of years.

Mr Hayden:

– What has that to do with his sincerity now?

Mr SPEAKER:

-Order! The honourable member for Oxley has already spoken in this debate.

Mr SNEDDEN:

– The honourable member for Chisholm played a most significant role in the Olympic Games organisation in Melbourne in 1956.

Mr Hayden:

– What has that to do with it?

Mr SNEDDEN:

– If my recollection serves me correctly, a knighthood flowed from his work at that time and from his public service. The honourable gentleman, who has cast aspersions on the honourable member for Chisholm, ought to reflect on the service of this man to his country and to consider whether there is any possibility of his emulating that service. If he emulates it, he will not do so by making attacks of this type.

Mr Hayden:

– When did he ever support this principle?

Mr SPEAKER:

-Order! I warn the honourable member for Oxley.

Mr SNEDDEN:

– This issue is one which is eminently suitable for introduction as an item of General Business. It has been so introduced. It gives an opportunity for the expression of views which are held by members of the House. Those views must bc listened to. Indeed, quite a number of members have been sitting in the House to hear such views put. There is something which ought not to be lost sight of in relation to this subject of equal pay. I refer to the dilemma in which organised Labor finds itself. On the one hand are those who in loose terminology might be described is white collar workers and whom one usually thinks of as being brought together under the general umbrella of the Australian Council of Salaried and Professional Associations. On the other hand there are those unions that are brought together under the umbrella of the Australian Council of Trade Unions. At various times moves have been made by people in the ACTU to achieve an amalgamation of the white collar unions with the ACTU. There is no doubt whatever in my mind that when the ACTU speaks in support of the proposition of equal pay for women in the work force it does so, at least partly and perhaps principally, to try to establish to the white collar workers, amongst whom there is a greater proportion of women, that their interests would be looked after in the ACTU.

Mr Curtin:

– Much better.

Mr SNEDDEN:

– The honourable gentleman says that they would be looked after much better in the ACTU. But this is the thing that the ACSPA organisers must bear in mind: these white collar workers in organised unions are a growing force in the community, in terms of members and of influence. Because the craft unions in the ACTU recognise this, they are very eager to absorb into the ACTU these unions of white collar workers. The reason why they want to absorb them is the dilemma that the interests of the craft unions cannot be reconciled with the interests of the white collar unions. Their interests are quite different and separate, and any effort that is made to bring about an amalgamation of the two separate groups is an effort to serve the party political purposes of the Australian Labor Party. So the honourable gentleman opposite says: ‘Oh yes, we have proposed motions on this matter from the Labor side of the House’. Every one of these motions had as its definite purpose the political aim of seeking to gain support for the Australian Labor Party in its relationship with the white collar unions. The honourable member for Werriwa (Mr Whitlam), upon becoming the Leader of the Opposition, made a number of public statements. One of them was exposed for all its fault this morning by the Minister for Health (Dr Forbes). Another one, which does not contain as many inaccuracies but nevertheless needs exposure, is the statement that what he was eager to do as Leader of the Labor Party was to get more people from the unions of white collar workers to support the Labor Party. This is what he is aiming at. The reason why he is aiming at it is that he knows that the Labor Party was brought virtually to its knees at the last election, because it was out of phase with its traditional support in the craft unions and he is not confident that he can re-establish himself in the eyes of the craft unions.

Mr Irwin:

– There is no chance of that.

Mr SPEAKER:

-Order! The honourable member for Mitchell will cease interjecting.

Mr SNEDDEN:

– He is seeking to throw out a net of attraction to the white collar unions. No doubt the Leader of the Opposition and those who support him in this chamber would like to see an amalgamation of the white collar worker unions with the craft unions in the ACTU. That would be unfortunate, because it would not serve the purposes of the white collar unions. The interests of the two sets of unions are quite different. It would not serve the interests of either of them if they were brought together in an amalgamation.

Mr Cope:

– When is the Minister going to start talking about equal pay?

Mr SPEAKER:

-Order! The honourable member for Watson will cease interjecting.

Mr Hayden:

– I take a point of order, Mr Speaker. I ask you to remind the Minister that the discussion is about equal pay for women.

Mr SPEAKER:

-Order! This is a matter within the province of the Chair. I hope that the honourable member is not reflecting on the Chair.

Mr Hayden:

– Not at all.

Mr SNEDDEN:

– lt is most extraordinary how, when anything is said which has the effect of disclosing a measure of misrepresentation in a statement, or when there is any expose of a political motive in the manner in which something has been put before the House, it brings forward objections from the other side of the House. The motion proposed by the honourable member for Chisholm states:

That this House approves of the principle of equal pay for equal work for men and women officers of the Public Service and requests the Government to amend accordingly Regulations 104, 10S and 106 under section 30 of the Public Service Act.

It will be clearly seen that there are three elements in the motion. The first element is that the House approves of the principle of equal pay. The second element identifies the area, that is, the Commonwealth Public Service. The third element is a request that action be taken to amend the relevant regulations. As the honourable gentleman himself has pointed out, the Government accepted the principle of equal pay for equal work as far back as 1953. A very full statement was made on it at that time. An excellent statement was made by the Treasurer (Mr McMahon), who was then the Minister for Labour and [National Service, in the Estimates debate in 1962. That statement would well repay the honourable member for Oxley if he read it. That is the first element.

I part company from the honourable member for Chisholm when he refers to the Public Service. He says that the

Commonwealth is the biggest employer and therefore should set an example. The example that he wants to see set is- the making of appropriate alterations to the regulations. This is a reasonable proposition to put, but it is one which 1 would rebut. The example which must be given by the Commonwealth because it is the biggest employer in Australia is to make sure that the wage fixing processes of this country prevail in this issue.

We come now to the particular matter under discussion. Regulations 104, 105 and 106 under section 30 of the Public Service Act prescribe the salaries payable to officers in the Second, Third and Fourth Divisions of the Commonwealth Public Service. They prescribe for females salaries lower than those for males in corresponding classifications. For adult officers, the female rate under these regulations is $402 per annum less than the male rate. This difference derives, of course, from the basic wage element. The Commonwealth Government does not oppose the principle of equal pay for men and women workers for work of equal value. It was, as I have said, affirmed as far back as 1953. However, it must be made clear that there is an absence of agreement on what constitutes the implementation of the principle, it has been argued that in the Australian context, where the concept of needs is not entirely absent from the basic wage, the payment of the same margin for skill regardless of whether the position is occupied by a male or female worker is all that is required. On this view we already have equal pay in the Commonwealth Public Service - that is, if we look only at the margin. Indeed, female officers in the Public Service occupying positions open to males and females are more favourably situated than are the majority of women outside the Public Service. Many industrial awards provide for lower margins as well as a fraction of the basic wage. An example of this is that the clothing trades employees union has recently had a claim before the Commonwealth Conciliation and Arbitration Commission. 1 think it’ was only last Friday that the hearing finished and the decision was reserved. The application was for an equal margin for women in the industry.

In the Commonwealth Public Service the present position is that equal margins are prescribed for men and women employed in the same classification. Three States have acted to apply the principle of equal pay, but I query whether in fact they have applied it. In New South Wales, where the principle also extends to industry generally, and in Tasmania, the application does not require equal payments to women engaged on work essentially or usually performed by females but upon which males may also be employed. The Tasmanian legislation provides for an increase of the female basic wage by annual increments of 5% commencing from a date not earlier than 1st January 1968. The South Australian legislation adopts the principle that was applied in New South Wales. I. think if is fair to say that in these two latter States to date teachers are the only employees affected.

Another interpretation of equal pay for work of equal value is that it not only means equal payments in respect of positions that can be occupied by males or females but also requires at least the substitution of the male rate for present female rates. Nobody has yet been able to identify precisely what is meant by equal pay. But even that does not go the full distance, because it may be asserted that, relatively, margins for females in what are generally regarded as female areas of employment may not always accord with the margins received in general male areas of employment. Besides its overall economic responsibility, the Commonwealth, as the largest employer in Australia, cannot be oblivious of the consequences for industry and commerce at large in considering any action that may be taken in respect of its own employees. The line that successive Commonwealth Governments have taken to date has been that the complex and far reaching issues involved should be thoroughly canvassed and the proper body to undertake it is, at’ the Federal level, the Commonwealth Conciliation and Arbitration Commission.

It is necessary to remember that persons employed under the Public Service Act have, through their unions, the right to have their terms and conditions of employment determined by the Public Service Arbitrator.

It is open to unions to submit claims to the Arbitrator seeking for their female members the male basic wage, and that is what this motion is actually directed towards. It is equally important to remember that there are reference and appeal provisions contained in the Public Service Arbitration Act. This means that claims and appeals against determinations by the Arbitrator can be dealt with by the Commonwealth Conciliation and Arbitration Commission. It is therefore open to unions to file claims with the Public Service Arbitrator seeking what this motion is intended to do, but the unions have not done this. The Arbitrator is not bound by the decisions of the Commission relating to matters outside the Public Service, but equally it is reasonable to assume that the Arbitrator would give due weight to the views of the Commission on such an important issue.

Sir Wilfrid Kent Hughes:
CHISHOLM, VICTORIA · LP

– It has been done in Great Britain and America.

Mr SNEDDEN:

– The United Kingdom has not adhered to the Convention and many countries that have adhered to it in fact do not have equal pay. This was made clear by a report of the Status of Women Commission only recently. Although the trade union movement has consistently advocated the granting of equal pay, it has not seen fit to make a claim for an equal basic wage for women to the Commission or its predecessor, the Court, and the female basic wage has not been an issue in any basic wage inquiry before the Commonwealth tribunal since the 1952-53 inquiry. What is more, the trade unions have not very vigorously pursued the course of securing equal margins. I mentioned a case that was heard only the other day. The reason for this, of course, has been the apprehension that if more goes to the female less will be available for the males.

That the trade union movement has not in fact given a high priority to claims for equal pay, by comparison, for instance, with claims for increases in the basic wage, margins or annual leave, is a pointer to some of the implications of the implementation of equal pay. Without prejudice to the Commonwealth’s general attitude that this is a matter for the arbitral authorities, attention needs to be drawn to some of the inescapable consequences of the introduction of equal pay which must be weighed against the general desirability of the broad principle. Equal pay cannot be achieved without an undercutting of men’s wages in real terms. In practice, this would be unlikely to take the form of an absolute reduction in male rates; it would be rather a halting or a slowing down of the increases in real male wages over a sustained period. This is because the amount of real product available for distribution among income groups at any time is limited. This is the point I made about the difference between the craft unions and the white collar unions. Each group is seeking a greater proportion of the total amount available for distribution; each group of workers wants to be favoured. Another factor is that the wage earners’ share in real terms will in the main be governed by influences other than nominal rates of pay, so that an increase in the share going to women will be largely at the expense of the male’s share.

Equal pay is, of course, only one of a number of factors relevant to the employment of women in the Public Service. The recent action of the Government to remove the prohibition on the permanent employment of married women in the Public Service is indicative of the Government’s desire to encourage the employment of women and to enable women to make in the Public Service, and indeed elsewhere, the contribution that they are eminently suited to make. Unfortunately they have not as yet made as great a contribution as they no doubt will in the future. The International Labour Organisation instruments relating to equal pay have been mentioned. The Convention says that members of the Organisation shall, by means appropriate to the methods in operation for determining rates of remuneration, promote and, so far as is consistent with such methods, ensure the application to all members of the principles of equal remuneration for men and women workers for work of equal value. The Convention goes on to say that the principle may be applied by means of national laws or regulations, legally established or recognised machinery for wage determination or collective agreements.

There appears to be confusion in some circles about the Australian Government’s obligations in respect of these instruments. It is the practice of the Commonwealth

Government, and properly so, not to ratify a convention or accept a recommendation unless the law and practice in ail the States and Territories of the Commonwealth conform with the instruments in question and unless the States agree, if they are involved. The instruments have been put to the States but only New South Wales and Victoria have indicated their agreement to ratification or acceptance. However the law in practice in these States does not fully conform to the requirements.

Mr SPEAKER:

-Order! The time allotted for the consideration-

Mr Daly:

– I should like to move that the question be now put.

Mr SPEAKER:

– Order! The honourable member for Grayndler would be out of order. The time allowed for the consideration of notices has expired. The Minister for Immigration will have leave to continue his remarks when the debate is resumed. The resumption of the debate will be made an order of the day for the next day of sitting.

page 763

DIPLOMATIC PRIVILEGES AND IMMUNITIES BILL 1967

page 763

INCOME TAX ASSESSMENT BILL 1967

Second Readings

Debate resumed from 9 March (vide page 510), on motion by Mr Hasluck:

That the Bills be now read a second time.

Mr CONNOR:
Cunningham

– The Opposition does not oppose this Bill. Nevertheless, it has certain comments to make upon it, and certain suggestions which would we think materially improve it. Initially we make the comment in particular that in a bill of this nature which has been designed to give effect to the Vienna Convention on Diplomatic Privileges and Immunities and to repeal the existing legislation, we think that the Government is deserving of censure for having been so tardy in becoming a party to the Convention and ratifying it in the terms of its articles. We consider that, as already fiftyseven countries have ratified or acceded to the Convention, Australia, whose delegates took a very active part in the Vienna conference in 1961 which drew up the Convention, and greatly influencing its final text, ought to have become a party to it long ago.

We believe that many cases of hardship have resulted from the operation of the old measure - cases of hardship inflicted upon Australian citizens in respect of their proprietary rights and their civil rights and we consider that the Government has been very lax indeed in presenting this legislation for the approval of Parliament. There have been certainly some significant changes in the legislation itself. There have been very great changes in the scope of the privileges and immunities of the diplomatic community in general and of the administrative and technical staffs and the Service staff in particular. We welcome those changes as being an amelioration at least of some of the problems which have presented themselves to the people of Canberra in particular and of Australia in general in relation to the activities in the normal discharge of their duties of the various missions and their staffs. We do note in particular that full immunity for diplomatic staffs from civil and criminal jurisdiction only is a very notable improvement. It is not generally appreciated, I think, by some of those who are critical of diplomatic privileges and immunities that the law operates, but there is immunity only from the jurisdiction of the civil and criminal courts. That immunity can be waived under article 32 of the Convention.

We note also with approval that the administrative and technical staffs of the various missions have been given full immunity in respect of official acts. We note equally with approval that immunity no longer exists in civil jurisdiction in respect of non-official acts by administrative and technical staffs. We are equally pleased that in the case of the Service staffs immunity is to be granted only in respect of official acts. The Minister for External Affairs (Mr Hasluck) of course made reference to this in his second reading speech. A resolution was passed by the various nations at Vienna in 1961 suggesting that so far as was practicable and so far as it would not impede the performance of their functions waiver of immunity should be made by all of the various diplomatic missions of the various member states. The Minister has stated that in respect of certain countries such waivers have already been received. We suggest that this is a field of activity that could be very considerably expanded and we should like to see more reciprocity in this regard.

It is notable that the Government has been generous in exempting from customs and excise duty the heads of missions and diplomatic staff. It has gone in that respect beyond the text of the relevant article of the Convention. The Opposition notes also with approval that so far as administrative and technical staffs are concerned the exemption from customs duty is limited to such goods as they bring in when they first enter the country at the time when they first take up their duties.

So much for the general principles of the legislation. We live in a modern age and many diplomatic immunities and privileges are delineal descendants of the traditions of sovereign monarchs in a former age when they were untrammelled by considerations of parliamentary government. Centuries ago it was the custom in the exchange of courtesies and of emissaries as between the absolute monarchs of various states to accord to one another very great privileges indeed. Conversely, when there was a need to stir up trouble and perhaps to provide good cause for aggression and war envoys could be treated most contumeliously, and with consequences that were well calculated in advance. But today we live in a period when, with the temper of a democratic community we must necessarily expect the continual whittling away of diplomatic privileges. The abuse of diplomatic privilege has been a matter of adverse comment within the Australian Capital Territory, and I have no doubt that my colleague, the honourable member for the Australian Capital Territory (Mr J. R. Fraser) will have plenty to say in that regard when he makes his contribution to the debate. This abuse of diplomatic privilege does exist, of course, and there are numerous and well authenticated cases of it. Nevertheless I think it may be fairly said, by and large, in relation to the diplomatic community in Canberra, and their staffs and employees, that there has not been any substantial abuse. There are some notable exceptions of course but the general batting average, so to speak, has not been an unreasonable one.

In this modern age it is notorious that at least 75% of the litigation in the civil courts is associated with claims for damages, either to person or to property, arising from neglect in the use of motor vehicles. The trend towards greater pre-occupation of our courts with such litigation is notable within this area. At the present time - and I understand the practice is of fairly long standing - diplomatic number plates for registration purposes are issued only after production of a third party insurance policy. This is good so far as it goes, but it does not confer on an aggrieved person any special privilege or right of action against a bead of mission or his diplomatic staff. We consider there is a case - and this has been raised in former years by the present Leader of the Opposition (Mr Whitlam) and a former leader, the late Right Honourable Dr H. V. Evatt - for introducing the practice of suing a nominal defendant. We believe that where there is obviously a poo] of finance available under the terms of an ordinary contract of insurance no question should arise of a waiver of diplomatic privilege in cases of this kind; the legislation should provide for an automatic waiver. In the case of worker’s compensation the obvious limitations are well known and J need not repeat them to the House. But a similar alteration could be made to provide for a nominal defendant to be sued in appropriate cases, and the necessary insurance policy could be provided.

In this connection I shall refer briefly to a comment which was made on a former occasion by the Leader of the Opposition. So far the Government has completely failed to give proper relief. This matter was raised by Dr Evatt in, I think, 1958 or thereabouts, and by the present Leader of the Opposition in 1960. Most constructive suggestions were offered as to the manner in which provision could be made for a nominal defendant to be sued both in motor car accident cases and in worker’s compensation claims.

There are some other aspects of this legislation on which I will have further comments in Committee. We believe that the Bill could have been drafted with more care, particularly in its definitions and in respect of the operation of particular clauses. But I do want to make the general comment that Canberra is a unique city; we are indeed proud of it and we are proud of the fact that in this city so many of the major nations of the world have set up embassies, legations and other kinds of establishments, and we look forward to Canberra being not merely a cultural centre but also a diplomatic centre of the southern hemisphere.

Australia is reaching maturity as a sovereign nation operating in its own right. The number of diplomatic personnel stationed here has grown to the point at which these people represent a considerable sector of the community. They have been given great privileges such as immunity from civil and criminal actions in the cases of heads of missions and diplomatic staff. They are given other privileges such as inviolability of premises and the right to the use of their national flags. There is also the very great privilege, and one that has been granted world wide acceptance, of the use of diplomatic bags and diplomatic couriers. They are given special respect with regard to their status and they are also provided with safe conduct in war. The Government has been notably generous in relation to Customs and Excise exemptions. Further exemptions are provided in the bracket of Bills associated with this Bill, in the fields of income tax, pay-roll tax and sales tax. But we believe that the Government has been tardy in its approach to this matter. It might well have introduced this legislation at a much earlier date and in that way have averted many cases of hardship. We believe also that there is a case of special attention to be given to the introduction of the practice of suing nominal defendants in motor accident cases and worker’s compensation claims.

Mr KILLEN:
Moreton

– It is a pity that the honourable member for Cunningham (Mr Connor) was so austere in his recognition of the efforts of the Government in legislating in this sphere. With very great respect to my friend, I do not think it would have hurt him in the least if he had been a little more forthcoming in conceding that the Government in introducing legislation concerning diplomatic immunity is making a very genuine and worthwhile contribution in a field that has hitherto been neglected. But the honourable member simply took the view that the Government had been tardy.

Let me put this to the honourable member: this legislation should, I think, be assessed against the fact that it is not thirty years since this Parliament had no power to legislate with respect to a Geneva convention on the amelioration of the condition of sick and wounded of armies in the field. In 1937 the British Parliament legislated to alter the Australian Constitution because in that year the Geneva convention relating to the matter I have mentioned was agreed to by all the countries represented at Geneva. On that occasion the United Kingdom altered the Australian Constitution. This is an historical oddity, I suppose, but I think it is indicative at last of the fact that within one generation this Parliament has passed from the position of having no power to legislate with respect to international conventions to the position of having complete power to do so.

It may be perfectly true, as the honourable member has said, that the convention was agreed to by the requisite number of countries sitting at Vienna in 1961, but time moves slowly when it comes to persuading countries to agree to ratify international conventions. If one looks at the host of international conventions that have been agreed to over the years one finds considerable lags between the initial agreements by the convention bodies and the bringing into force of the conventions. So I put it to my friend that he was a little less than generous. He has a very warm heart and a very generous make-up which he strives to conceal, but I am sorry that he was so eminently successful this afternoon.

There is no obligation, of course, on Australia to agree to this convention, but recognising the comity of nations and recognising also that this is a very practical sort of world, the Government has readily agreed to legislate in this field. It is true also that this legislation purports to affect very few people. It is only now and again that an incident occurs that results in the invoking in some way or another of diplomatic immunity. But when it does involve a per son in some issue it is in the nature of a cause celebre and there is a tremendous amount of public interest centred upon the particular issue.

It may be trite to say so, but nevertheless one should acknowledge that the concept of diplomatic immunity is traceable back to approximately the thirteenth century. Today in its modern form it involves a recognition of the ancient concept of the sanctity of an envoy going abroad and also the notion of the dignity of the monarch or the head of slate. In its modern context, of course, it plainly recognises the practical nature of the international community. In his second reading speech the Minister for External Affairs (Mr Hasluck) observed that immunity from jurisdiction should not be confused with immunity from liability. Many people who are critical of the nature of diplomatic immunity fail to recognise the great difference between an immunity from jurisdiction and an immunity from liability. I refer the House to the case of Rex against A.B. reported in 1941 King’s Bench Division, in which the Court of Criminal Appeal put the position very succinctly in these words:

The privilege is the privilege of the ambassador and not of the individual, and therefore, from the moment of waiver by the ambassador and a fortiori by this Government, the privilege ceases. The cloak of the ambassador no longer covers the individual and the individual then becomes liable to any process of law to which ordinary people are subject.

Of course, that is spelt out very plainly in article 32 of the Vienna Convention which reads:

Immunity from jurisdiction of diplomatic agents and persons enjoying immunity under Article 37 may be waived by the sending state.

It goes on to provide that the waiver must always be expressed. Again, it may be helpful to look at the comments by Lord Hewart in Dickinson against Del Solar when, giving judgment in 1930, he said:

Diplomatic agents are not in virtue of their privileges as such immune from legal liability for any wrongful act. The accurate statement is that they are not liable to be sued in the English courts unless they submit to the jurisdiction. Diplomatic privilege does not import immunity from legal liability but only exemption from local jurisdiction.

The same, of course, applies in the criminal sphere, and article 31 of the Convention gives an immunity to diplomats, their staffs, and what have you, in the field of criminal jurisdiction. I know that some people may have very strong views on this and wonder why there should be diplomatic immunity from criminal jurisdiction; but the immunity as such in its conventional sense is supposed to include a recognition by those who enjoy it that they must obey the municipal law of the country, and of course it in no way excepts them from the law or jurisdiction of the sending state.

It is true that immunity as it has been observed up to date gives to the diplomat immunity even in respect of a coronial inquiry. In 1916 in London the First Secretary of the Italian Embassy shot himself and the Italian Ambassador successfully asserted the claim that there should be no inquest into the incident. We find a further example of the nature of the immunity in article 31 which provides that a diplomatic agent is not obliged to give evidence as a witness. As a matter of practical politics a diplomat has been known to give evidence where the action has not been opposed to the interests of the sending state. For example, the Venezuelan envoy to the United States of America in 1881 gave evidence regarding the assassination of President Garfield. That could be contrasted with the action of the Dutch envoy in 1956, a Mr Dubois, who declined to give evidence at the trial of a person charged with murder although he had himself in fact seen the murder committed.

These are matters of practical consideration and it is quite impossible to lay down in any stark form what convention should be observed from time to time; but I want to refer, if I may, to three particular fields that seem to me to be affected by the concept of diplomatic immunity. The first is with respect to those diplomats who carry out espionage in the countries concerned. This is a very practical world and it would seem to me to be folly of the first order to imagine that some diplomats do not seek, under the cloak or guise of diplomatic cover, to carry out activities which are opposed to the interests of the receiving state. I refer the House to the Canadian case of Rose against the King reported in 1947 Dominion Law Reports. Rose was at one time a member of the Canadian House of Commons. When Gouzenko defected from the Soviet Embassy he took with him a great number of diplomatic papers which he gave to the Canadian authorities. The Canadian authorities subsequently used those documents in the prosecution of various people, and it was claimed at the time that it was improper for the Canadian authorities to act in this way. Here is the headnote to the case of Rose against the King:

The privilege of diplomatic immunity given to an Ambassador by international law extends to himself, his personnel, dwelling, documents, archives and correspondence, and can be renounced only by his own State. But where acts committed by the diplomatic corps tend to put the safety of the State to which the corps is accredited in peril, then the immunity fails before that higher interest.

I repeat the last line: the immunity fails before that higher interest.

It would seem to me that this would be authority for the proposition that where a diplomat behaved in such a way as to rouse in the receiving state the view that he was carrying out espionage - and one should not be timid about this - the receiving state could declare him persona non grata. But it would also seem to me to represent authority to provide that in crucial circumstances - and one can ponder in one’s mind circumstances that could reasonably be described as crucial - a diplomat would cease to have this cloak of immunity. Admittedly this would be an extreme case. But the Canadian court said - and the words are, I think, quite plainly put:

  1. . the immunity fails before that higher interest.

The second aspect I want to refer to is the number of government missions that go abroad. Today, with the emphasis upon trade and economic and commercial co-operation and activity throughout the world, a great number of government and semi-governmental bodies send representatives abroad on missions. I would respectfully put to the Minister for External Affairs and his Department that possibly the position of some of these bodies is a little vague. I do not know whether all of them would be clothed with diplomatic immunity. Take the case of a trade mission sent to this country from another state. I might be made up of representatives of private business and also persons from various government departments. Is the whole mission clothed with diplomatic immunity? Has it, to use an analogy, the shield of the Crown?

Does this apply? Under our own municipal law many semi-government departments have this sort of shield of the Crown. The Crown cannot be sued unless there are facilities for doing so. I do not think that our Commonwealth legislation makes provision for proceedings against the Crown. I think New South Wales has provision for making claims against the Crown and so has Victoria. In Queensland, the Crown cannot be sued. There the proceedings must be by way of declaration or petition, and these are cumbersome forms. By analogy, is this protection given to those bodies that come here? I know that on one occasion France refused to concede diplomatic immunity to a trade mission, but I submit that there is some area of doubt here. Precisely how real the doubt may be, I do not profess to judge, but I submit to the Minister that there does appear to be some measure of doubt.

Take the case of the Tass Agency. This is a practical case in point. In 1949 there was reported the case of Krajina versus the Tass Agency and Another. If the House will bear with me, I shall recite the head note which is as follows:

On June 2 1948 the plaintiff issued a writ claiming damages for an alleged libel in an article in a weekly newspaper published by the first defendants-

That is the Tass Agency:

After entering a conditional appearance the first defendants applied to the court to set aside the writ on the ground that they were a department of the Soviet State and as such immune from suit. In those proceedings it was shown that in June 1938 particulars were filed under the Registration of Business Names Act 1916 by the second defendant, an English subject. The business was described as a telegraphic newsagency, and in the particulars appended to the application it was stated ‘the business name and address of the foreign firm as agent for whom the business is carried on: Tass Agency, Moscow, U.S.S.R.’ On July 2 1948, a month after the issue of the writ, further particulars under the Act were filed which showed that the second defendant had ceased to carry on the agency in August 1946, and gave the name of another person, B. In these second particulars it was not stated that the agency was being carried on as agent for a Russian firm. By clause IS of the Russian statute establishing the Tass Agency it was provided that the agency should enjoy all the rights of a juridical person and the Soviet Ambassador in Great Britain certified that the agency constituted a department of the Soviet State ‘exercising the rights of a legal entity’. The master ordered the writ against the first defendants to be set aside and his decision was affirmed by Birkett, J.

The matter was taken to appeal, and the appeal court held:

Having regard to the certificate of the Ambassador that the Tass Agency was a department of the Soviet Slate, the burden of disproving that the agency constituted such a department was on the plaintiff; the question must be decided by Russian law; and the contents of the particulars under the Registration of Business Names Act 1916 did not establish that the agency was an independent corporation liable to suit in the English courts.

It was also held:

Although the Soviet statute provided that the agency should enjoy all the rights of a juridical person and the Soviet Ambassador had certified that the agency had the rights of a legal entity, no evidence was before the court to show what were the essential requisites of a separate juridical existence under Soviet law.

It was held finally:

Even if the agency was a State department having a separate entity, it did not follow that the Soviet Government, by procuring its incorporation, had deprived it of the right to assert the immunity normally attaching to a department of a foreign State under international law, and, accordingly, the appeal must be dismissed.

The proposition I put to the Minister and his officers is this: there is in this country, I understand, a representative of the Tass Agency. I do not know who the gentleman is. We are not on social terms. That may be a deficiency on my part.

Mr J R Fraser:
ALP

– The honourable members talks to him every week.

Mr KILLEN:

– If that is so, the honourable member is far better informed than 1 vaguely expected him to be. Certainly, on the authority of Krajina’s case, this gentleman would have immunity, but 1 ask the Minister: what is the position of the great plethora of representatives of government and semi-government departments that come to Australia from other countries as members of trade missions and the like? Are these people covered? Take the case of a person who is injured by a car which one of these people is driving. I submit it could well be a car other than a diplomatic car. A gentleman might hire a car at the airport and go off on a frolic on his own. He might drive somewhere and injure a person. What are the circumstances in that event? The Minister no doubt would use his good offices with the embassy concerned to try to ensure that there would be some form of compensation of the person concerned.

The last matter that 1 describe as being tacked on to this area of doubt is the doubt attaching to the inviolability of a residence. The Vienna Convention provides in Article 22 that the premises of the mission shall be inviolate. This is always held to be the case, although there was the celebrated case of Sun Yat-sen in 1896. Sun Yat-sen was tricked by a ruse into going into the Chinese Legation in London and the Chinese there sought to send him back to the sending state, even though he was a political refugee living in England. On that occasion the British Government used its good offices to prevail on the sending state, through the Chinese Legation in London, to release Sun Yat-sen, and that was done. But what of the inviolability of premises attaching to a person who is not a diplomat qua diplomat, but a person working as a member of a trade or economic mission to Australia?

The last point I want to make concerns a matter which I regard, with great respect, as something of a gap in our proposed legislation on this subject. Amongst other things, the Minister said this in his second reading speech:

It is argued that diplomatic immunity often involves hardship for an individual who has a right of action against a member of a diplomatic mission which would otherwise be adjudicated in court.

He went on to say: . . it cannot be denied that such a consequence may, and sometimes does, arise but 1 would ask honourable members to realise that there are other considerations to be borne in mind.

Then the right honourable gentleman went on to trace the doctrine of waiver, whereby the embassy concerned can waive its immunity. This is perfectly true, and I have no quarrel there, but I submit to the right honourable gentleman that there are possibilities. A person could be most grievously affected by the action of a person attached to the embassy yet have absolutely no redress whatsoever if the embassy declined to waive immunity, lt is also perfectly true, as the right honourable gentleman has said in the explanatory memorandum dealing with the current law and practice on third party insurance of vehicles owned by diplomatic missions and staff, that the Minister or his Department would seek to secure, on behalf of the injured person, waiver by the embassy concerned. The Minister has drawn our attention to a reso lution of the Vienna Convention on Diplomatic Privileges and Immunities. I shall not recite the resolution, but the Minister said that the sending state can waive the immunity of members of its diplomatic mission in respect of civil claims when this can be done without impeding the performance of the functions of the mission, and that when immunity is not waived the sending state should use its best endeavours to bring about a just settlement of the claim.

May I put this to the Government: it is not hard, as I have argued, for circumstances to arise in which a person is grievously injured physically or his property is damaged severely. If the embassy or the ambassador concerned fails to waive the immunity, the next line of attack that is open to the injured person is to work through the Minister for External Affairs and his Department to try to prevail upon the embassy or the ambassador to have second thoughts about the matter. If that fails, the injured person has no right of redress whatsoever. I submit that this is a gap in the existing order of things. I do not think it would be too much to arrange for some means whereby in these extreme circumstances the individual would have access to compensation. Let us consider the case of an ordinary running down where a man may be injured and may emerge as a quadriplegic, completely unable to move. He may be a breadwinner with half a dozen children. He may have been a person of great skill at his profession or trade and he may have had high hopes of educating his family through the university. But all that would emerge before him would be a shattered ideal if he were in the position where he was unable to prevail, or the Minister for External Affairs and his Department were unable to prevail on the embassy or the ambassador concerned to waive the immunity. This does not happen every day of the week, but when it does happen it represents a crucial burden to the individual concerned. I hope that the Minister and the Government will give some consideration to devising a scheme whereby there is, in such circumstances, a nominal defendant.

I conclude on a note of agreement with my honourable friend from Cunningham. I started with a mild note of disagreement, but I always try to make amends. So I finish on a note of utter agreement. I think that there should be a nominal defendant in these extreme circumstances. I do not think it would cost the community very much at all to appoint a nominal defendant. It would relieve an injured person of great mental stress and anxiety caused by not knowing whence the next meal was coming. It is only when one encounters an individual who is put in that position and whose whole life prospect is ruined and brought to a halt that one comes to understand the nature of the anxiety that besets such people. I most warmly congratulate the Minister for External Affairs and the officers of bis Department for the courtesy and help that they have given to me and a number of other members on this side of the House, and I am sure to honourable members opposite in regard to this Bill.

Mr J R Fraser:
ALP

– There are some aspects of this measure in which I am particularly interested. It seems to me that the Bill does not so much specifically reduce diplomatic immunity and privilege but rather lessens the number of people to whom that privilege and immunity extend. My concern is for those people in this community who may suffer harm or have a hardship inflicted upon them by the operation of diplomatic immunity. Over the years I have brought to this House many cases in which real harm and real hardship have been suffered by members of this community because of the operation of diplomatic immunity. It has been said - and it is true - that the presence of the diplomatic community adds life and colour to Canberra. I certainly seek to make no onslaught on the diplomatic body as a whole but rather to draw attention to those members of the diplomatic community who fail to recognise their moral obligations in this general field that we are covering. Because of the existence of the 1961 Vienna Convention and because of the inability of the Government to legislate beyond that Convention, the responsibility accepted by the diplomat remains a moral responsibility. It seems to me that it is the duty of heads of missions to ensure that all members of their staffs - all employees of missions - are thoroughly aware of their obligations in the moral sense.

The Minister for External Affairs (Mr Hasluck), in introducing the Bill, pointed out that full immunity under this measure is conferred only on the diplomatic staffs of a mission, that is to say, the Ambassador, Minister, High Commissioner and Charge d’Affaires, and members of the diplomatic staff, namely, counsellors, first, second and third secretaries and attaches. He also said:

Tha administrative and technical staff of a diplomatic mission - the typists, clerks and archivists, for example - are accorded full immunity in respect of their official acts but in relation to their non-official acts they have no immunity from the civil jurisdiction of the state in which they are serving. They are, however, given immunity from the criminal jurisdiction of the receiving state, this being regarded as essential to enable these members of the staff of a mission to carry out their duties without risk of interference on the part of the state in which they are serving. On that point I would ask honourable members to think not solely of conditions in Australia but of conditions in some other parts of the world where our own Australians are serving.

Service staff of the diplomatic mission - i.e. the domestic staff of the mission, including chauffeurs - are accorded complete immunity only in relation to their official acts, and private servants only such immunity as is accorded by the receiving state - that is the state in which the mission is established.

In 1961, Sir Garfield Barwick, who was the then Acting Minister for External Affairs but is now the Chief Justice of the High Court, wrote to the then Leader of the Opposition, Mr Arthur Calwell, on this matter. I think that it is valuable for us to recall hat he had to say then. Sir Garfield wrote:

We must . . . accept the principle of diplomatic immunity as firmly established in law. The problem is to ensure that hardship is not caused to individuals by its operation. In this regard I have been interested in your advocacy of the amendment of the ACT Motor Traffic and Workmen’s Compensation Ordinances to enable suit to be brought against a nominal defendant in cases where diplomatic immunity is pleaded, and I assure you that I have given the matter a deal of thought. Perhaps I have not fully appreciated your proposal in all its details, and, if I have misunderstood you, I should be glad to hear from you in the matter. If, however, it is intended that the Commonwealth should create and maintain a fund from which judgments would be met, this would, as I see it, mean that the Commonwealth would be bearing the responsibility for the acts of the personnel of other Governments to an extent which is quite indeterminable. While appreciating your motives in putting forward the matter for consideration, I am not, as yet, convinced that this is necessarily the only solution to the problem. Admittedly it would protect the position of the injured Australian - and we have a common objective in this - but it is a matter for serious consideration whether it is sound in principle that the Government should, so to speak, underwrite the behaviour of members of foreign diplomatic missions. If I did not have hopes that other solutions to the problem might exist, my attitude might be different, but I believe that we might find some solution to the problem on the lines which I describe below.

Unfortunately the letter is lengthy and I cannot possibly read the whole of it, but in the final paragraph Sir Garfield said:

I think that we should bear in mind several points which are often overlooked in discussions on this subject. In the first place, it is always open to a Government to waive the immunity to which its diplomatic missions and their staff might otherwise be entitled, and in circumstances which have no relation to the internal working of a mission it might be expected that immunity should, and in fact would, be waived. Secondly, it needs to be borne in mind that the immunity which diplomatic personnel enjoy is not an immunity from the provisions of the local law, but an immunity from suit only. It is expected that diplomatic personnel should comply with the local law, at least in so far as it does not hamper the performance of their duty, and glaring cases of abuse of the law can be dealt with (as indeed they have on occasions been dealt with in Australia) by the declaration of the offender as persona non grata. Thirdly, I think that it can now be said to be established that the immunity exists only while the person enjoying it has diplomatic status in this country. Once he has left Australia the immunity ceases, at least in respect of his non-official acts. Admittedly there are practical difficulties in suing a defendant who is out of the jurisdiction, but a person injured by a diplomatic person in this respect is in no worse a position than he would be if he had been injured by a person not possessing immunity who had left the jurisdiction before proceedings against him had been instituted.

I shall refer later to a case that touches on that. In April 1954, I asked the then Minister for External Affairs a series of questions relating to the issue of DC plates for vehicles operated by diplomatic missions. The Minister, who was then Mr R. G. Casey, replied in these terms:

  1. ‘D.C motor registration number plates are issued to motor cars which are maintained for the official use of diplomatic missions and to those privately owned by persons whose names appear on the diplomatic list, that is, members of diplomatic staffs, their wives, and in certain cases their daughters over eighteen. They are not issued to other employees of such missions. While diplomatic persons are not subject to the jurisdiction of the courts of the country in which they are accredited, they are assumed to conform with local laws. In cases of serious breach the persons concerned have been asked to leave this country. Drivers of ‘DC cars are required to obtain an Australian driving licence.

This was not in the statement circulated by the Minister for External Affairs (Mr Hasluck) today. However, it was in the answer given by the former Minister for External Affairs in 1954. The Minister said:

Drivers of ‘D.C cars are required to obtain an Australian driving licence. Although in the Australian Capital Territory this is issued gratis, it is given against production of a valid driving licence from elsewhere.

Always bearing in mind that diplomatic persons are by international law immune from the local jurisdiction, drivers of diplomatic cars are naturally expected, as are Australian citizens, to observe the speed limits and other traffic regulations. Where they occur, breaches are officially brought to the notice of the mission concerned for appropriate action.

In Canberra we have records of many cases of this kind. I have myself brought to the attention of previous Ministers for External Affairs and of officers of the Department cases of flagrant abuse of traffic laws in this Territory. There was the celebrated case of the French diplomat who had a passion for low-slung sports cars. He used to boast that he went from the Hotel Australia in Sydney to the Hotel Canberra here in two and onequarter hours. He subsequently drove round National Circuit at 70 miles per hour. As the Minister may recall, attention being drawn to this, the man was back in France within forty-eight hours, as he should have been. On occasions I have had something to say about diplomats who have abused the privilege available to them through the issue of DC plates and their immunity from suit. I make no bones about saying that on occasions I have chased diplomatic cars at exceedingly high speeds in some of the streets of this city. Various pleas have been made by the gentlemen concerned when I have managed to draw up in front of them and ask why they have been proceeding at that speed or have committed other breaches. On one occasion, a car that I followed at over 60 miles an hour along Canberra Avenue to St Andrew’s Church proved to be driven by the schoolboy son of a Greek diplomat. The son had been given the use of the car so that he could visit friends in a country town of New South Wales. On mentioning the matter to the father, in this case the appropriate action was taken. There have been many other cases of this kind. lt is on record that the wife of an Asian diplomat, after doing the proper thing by having driving lessons, went to the Department of the Interior to secure a driving licence. When she had been given an eyesight test, the inspector said: ‘1 could not possibly give you a licence because your eye-sight is too bad. But that does not matter. You are a diplomat; you do not need a licence’. That is an extreme case, but it is one that has occurred. Another celebrated case involved the thirteen-year-old daughter of a diplomat who drove a highpowered American car at a great speed around this city. In another case, the daughter of a South American diplomat used to arrive at Canberra High School in a chauffeur-driven Rolls-Royce, from which she would alight to join her classes. The headmaster suggested to the Ambassador that it was hardly the done thing in Australia for a twelve or thirteen years old girl to arrive at the school in a chauffeur-driven car. It created a bad impression, he said. The Ambassador understood perfectly; he undertook to see that it would not happen again. The following day she arrived driving her own Ford Thunderbird. Those are only illustrations of what can happen in this city.

What frequently happens is that there are flagrant breaches of the traffic laws, particularly in relation to parking. In any of the shopping centres in Canberra you will see cars bearing DC plates which are illegally parked at bus stops, by red painted kerbs at copiers and in the centre of streets in which centre parking is not permitted. You will find DC cars double-parked or left for hours in places in which the ordinary citizen, if he left his car there for only a short while, would get a blister from the parking police and would be fined $2. Diplomats, of course, cannot be touched for such breaches of the law. Although the extent of diplomatic immunity is varied by this Bill in that there will now be three classes of people, the only obvious fact in these cases is the DC plate on the car. The parking inspector or the ordinary citizen who sees one of these cars in a position where it is breaching the laws of the Territory has to satisfy himself whether the driver of the car has full diplomatic immunity or is on official duties. I think the Minister will see that there are many avenues through which the responsibility that should be accepted by the drivers of diplomatic cars can be avoided.

I do not know whether it would be proper to suggest that there should be an amendment of the ordinances to overcome these difficulties. Perhaps that would not be proper, but I would suggest that the fact that these breaches of the law do occur should be drawn frequently and strongly to the attention of the heads of missions in Canberra. Members of diplomatic missions certainly are here for the benefit of their own countries, but they are here also to create the best impression that they can and so build up friendship and esteem between their countries and ours. It would be reasonable to suggest to them that the best way in which they can create good will is by obeying all the laws of this community. Officials here sometimes aggravate the situation. Not so long ago an entire street in Kingston was marked: ‘Parking for DC cars only’. This affronted all the business people in the street and, after they had protested, parking was made open once again. I suggest to those diplomats who may read the report of this debate that it is the responsibility of heads of missions - in general, they do not commit these breaches - to impress on their staffs and employees that it is in the interests of their own countries and their own missions to obey the laws of this country, even though they may be immune from action if they do not in fact obey them.

This matter affects not only the traffic laws but also persons who suffer injuries in accidents involving diplomatic vehicles. This aspect has been referred to by the honourable member for Cunningham (Mr Connor) and the honourable member for Moreton (Mr Killen). It is true that the issue of DC plates is now conditional on the presentation of a third party insurance policy and that this gives some assurance that any person suffering bodily injury in an accident involving a diplomatic vehicle will have some opportunity of recovering reasonable costs and damages from the insurance company. But there is no obligation on the owner of a diplomatic corps car to have a comprehensive insurance policy on his vehicle. There is no obligation on the ordinary citizen to have such a policy, but whereas the ordinary citizen who is driving an uninsured vehicle and who, by his own negligence or in any other way, causes damage to another vehicle can be sued, the driver of a diplomatic corps vehicle cannot be sued for damages in Australia.

I recall one case in which a young man of very slight means while driving his own car in the suburb of Yarralumla came into collision with a car bearing DC numberplates and being driven by an employee of the diplomatic corps, although not in the course of his duty. The young man’s vehicle was damaged to the extent of some hundreds of dollars. Protracted negotiations with the then Ambassador for the United States were necessary before finally we were able to obtain satisfaction of the claim and have this young man’s car repaired. There have been many other instances of similarly protracted negotiations, and invariably satisfaction has depended finally on an approach to the head of mission and his submission of a case to his home authorities - in the case to which I have referred, the Foreign Office of the United States of America. These negotiations should not be necessary. An Australian citizen should be given some cover against damage or loss sustained in circumstances such as I have described.

Other cases have been brought to my attention over the years, and I have brought some of them to the notice of various Ministers for External Affairs and mentioned a few on the floor of the House. They have related to diplomats who incurred debts and then left the country leaving a storekeeper or a supplier of goods lamenting. The Minister for External Affairs may remember that not so many years ago a diplomat was about to depart from Australia leaving debts which totalled, I believe, about £600. The amounts were owing to people who were not in a position to bear such a loss. It was only by urgent representation and the voicing of the matter in this place that the diplomat was persuaded to settle his debts before he went overseas. That case received some attention in the local Press. At that time - this was in 1964 - I asked the Minister:

What protection exists for businessmen or tradespeople who are owed money by diplomats or representatives of foreign countries who have either left Australia or are about to leave with substantial accounts unpaid? If business houses or tradespeople submit to the Department of External Affairs evidence of these debts, can the Government or the Minister make representations to the heads of diplomatic missions or in the case of employees of those missions, or, in the case of debts owing by the head of a mission, to the Government of the country concerned?

The Minister replied:

I am sure that if the honourable gentleman has a particular case in mind and brings it to the notice of my Department, or asks the person who makes the complaint to bring it to the notice of my Department, we will use our good offices as best we can to see that obligations are honoured.

If there is an obligation there should be some way of enforcing it, but all we are permitted to do is to use our good offices, that is, to bring pressure on the head of mission or on the government which has sent the diplomatic personnel to this country.

Mr Curtin:

– Was that amount paid?

Mr J R Fraser:
ALP

– Yes, fortunately that one was paid on the afternoon of the day on which I referred the matter to the Minister, but only through the good offices of the Minister and his Department.

Mr Curtin:

– They do not want to pay for what they eat.

Mr J R Fraser:
ALP

– I do not know. I am not condemning diplomats in toto - far from it - but I do say that some do take advantage of the immunity that is given to them by law. The general body of those in the diplomatic community who are here to represent their countries are people of the highest’ standing and highest repute. No breath of criticism attaches to them. Unfortunately, their picture is marred by the actions of those who flaunt their diplomatic immunity. Let me quote a case in point. Only a few weeks ago a girl reporter from the ‘Canberra Times’ who was driving her car along a comparatively narrow suburban street came to two cars which were pulled up side by side, completely blocking the street. Both cars bore DC numberplates and the drivers were engaged in chatty conversation. She waited; they did not move. She tooted the horn; they still did not move. She got out of her car, went up to them and said: Would you please move your cars so that I can drive through?’ The answer was: ‘We are diplomats; we move when we wish’. She had to back her car down the street and drive round the block to get past. This is the sort of behaviour which brings discredit on the diplomatic corps as a whole.

I suggest that the best purpose of this debate is to draw to the attention of heads of missions and diplomatic staffs generally the bad impression they create when they permit this sort of thing to happen. As an illustration of one other type of difficulty I take from my files a case which commenced in 1962 and could not be brought to successful fruition even as late as early 1966. This was a case in which two people who were partners in a business had rented a house to a member of a diplomatic mission. Not only did he fail to pay the rent but he also caused considerable damage to the furniture, and a fire in the dwelling caused by his carelessness also resulted in considerable damage. The solicitors for my constituents having gone as far as they could sought my aid in the matter and eventually we got on the road towards a settlement. The case was set out by the solicitors in this way:

During the year 1962 certain disputes arose between Mr Hossny and our clients arising out of Mr Hossny’s use and occupation of a cottage owned by our clients and situated at . . Deakin. The disputes related mainly to the payment of rent and certain damage which our clients alleged had been caused to the property by Mr Hossny and his family. Various efforts were made to arrive at an amicable settlement of the matter but without success, and eventually our clients issued a Supreme Court Writ against Mr Hossny for the sum of £530 16s 8d which they claimed to be due to them from him for the rent of the premises. Mr Hossny did not appear to the Writ and Judgment was signed against him in this amount. However, Mr Hossny subsequently claimed diplomatic immunity-

He did not have to claim it; it existed if he did not waive it. However, that is the wording of the letter, which continues: and no further action could be taken on the Judgment.

Following this, further efforts were made to arrive at some settlement with Mr Hossny but again without success, and finally it was agreed between the parlies that the dispute should be referred to the decision of an Arbitrator. An Agreement for submission of the dispute to Arbitration was prepared and signed by the parties in July 1964 and they agreed to Professor J. E. Richardson, Dean of the Faculty of Law at the Australian National University, to be appointed as Arbitrator. The matter was heard by Professor Richardson in November 1964 and he handed down his award on 16 December 1964 directing Mr Hossny to pay to our clients the sum of £551 7s lid as well as certain costs relating to the Arbitration. These costs were subsequently fixed and determined by Professor Richardson in the sum of £511 17s.

Then comes this paragraph:

We understand that Mr Hossny left Australia early in January 1965 and to date no part of the award or costs has been paid to our clients.

I was able to make some further representations through the head of the Consular and Protocol Branch of the Department of External Affairs and I was advised by the head of protocol in the Department that our Embassy in Cairo had been following up the matter in discussions with the administrative head of the Egyptian department. The advice continued:

Our Folk in Cairo -

I like that term: say the matter is progressing satisfactorily and they are hopeful of an early settlement.

That letter was written in January 1966. I do not know whether the matter has been settled yet. I have had no further representation from the people concerned. My letter continued:

I gather that opportunity was taken to raise this matter again in Cairo while the U.A.R. Ambassador to Australia was in thai city on leave from his Canberra post.

Those cases illustrate the definite hardship which can be inflicted on Australian citizens by the acts, either wilful or negligent, of people who are in Australia as the employees of or the staff of diplomatic missions and who enjoy the diplomatic privileges and immunities extended to them in the terms of the Geneva Convention and the legislation enacted by this Parliament. I repeat that there are many other cases I could bring to the notice of the House. There have been cases in the Territory in which people have suffered very grave injury in motor vehicle accidents. These occurred prior to the provision requiring third party insurance in respect of diplomatic vehicles. There was an accident not far from Canberra in which a woman was killed. The diplomat and the mission concerned would not waive immunity and no action could be taken to recover compensation or damages.

There is no obligation on diplomatic missions here to take out workers compensation policies in respect of their employees. We have had cases brought to the Parliament concerning employees who suffered grave injury but there has been no recourse by which they could secure compensation for the injuries sustained in the course of their employment. I know that heads of missions have been informed that they should take out workers compensation policies to cover their employees. Some of them do and some of them do not. I would like to see the Government stress very firmly to heads of diplomatic missions - and make this known widely to the people comprising the workforce of this community - that they should take out policies to cover employees for workers compensation. If there is not general acceptance of this, the Government should make it known to the workforce that they work for diplomatic missions without such protection. These people work without the protection of industrial laws. They can be called upon to work all sorts of overtime without payment for it. Representations along these lines have been made by many unions. They have been made by the Trades and Labour Council. All sorts of representations have been put before this Parliament. This is a situation which should be corrected. These are things which heads of diplomatic missions should be keen to see are corrected if they are to create the impression that they should seek to create in representing their countries here.

My contribution to this debate may have been discursive but I am not able to go into the deep ramifications of the history of diplomatic immunity in the way that my learned friend the honourable member for Moreton can. But I hope I have brought to the notice of honourable members cases which illustrate a need, firstly, for acceptance of a moral obligation. If that moral obligation is not accepted then I believe this Government has a responsibility to its citizens to ensure that some steps are taken to see that these provisions are enforceable.

Mr HASLUCK:
Minister for External Affairs · Curtin · LP

– in reply - Mr Deputy Speaker, I should like to thank honourable members for the care and attention that they have given to this legislation. As it seems to be indicated that both sides of the House will support the second reading, there is no need for me to enlarge on the various points made. There were one or two observations made about which I might be expected to say something and about which I should like to speak.

The honourable member for the Australian Capital Territory (Mr J. R. Fraser) sees this problem of diplomatic immunity in a special way. The impact of members of the diplomatic community in Canberra is much more immediate and intimate in many ways than the impact on the rest of Australia. Undoubtedly, if incidents do occur in relationships between members of the diplomatic corps and staff members of diplomatic missions and members of the Australian community they are much more likely to occur in Canberra than in other parts of Australia. It has been very interesting to hear the recital given by the honourable member. It is quite plain that when there is any constabulary duty to be done in Canberra the honourable member finds life quite happy. I am sure that his work in keeping the members of the corps in the paths of rectitude has been as useful to them as it has been congenial to him.

I suggest to the honourable member though that when one considers that there is a fairly large diplomatic corps now resident in Canberra - indeed there has been for all the post-war years over a quarter of a century - that that corps has been increasing in numbers and that Canberra has been growing, the number of incidents to which attention can be drawn is comparatively small. It has been the experience of the Department of External Affairs, and my own personal experience during a comparatively short tenure of this post, that there has been no difficulty in obtaining the co-operation of heads of mission, and indeed the co-operation of governments on the very few occasions on which we have had to have recourse to governments, to ensure that representatives of foreign countries do behave in a way which will commend them to the Australian public and in a way which does honour to their own country. I think that on every occasion which I can personally remember that we had to make representations, either on very small matters or on larger matters, we have been met with great readiness on the part of heads of mission and on the part of governments to accede to our requests.

The proposed law that we have been discussing applies to the whole of Australia and to the Australian Territories. It is aimed at providing a legal basis for the whole of the Commonwealth and its Territories on which any of those sort of circumstances referred to by the honourable member for the A.C.T. may be dealt with and dealt with satisfactorily; on the one hand by defining more exactly the privileges and immunities, and on the other by indicating that Australia will conform to the international usage which has now been codified in the Vienna Convention.

The honourable member for Cunningham (Mr Connor), who led for the Opposition on this matter, referred to the possibility of using the process of a nominal defendant in those situations in which an Australian citizen might have suffered some disadvantage, loss or injury as the result of the action of a person who claimed diplomatic immunity. The attitude of the Government was very well expressed in a passage of a letter written by Sir Garfield Barwick which was read by the honourable member for the Australian Capital Territory. In general the attitude of the Government is that there are other ways of achieving the same objective. If we can succeed in persuading or inducing the person entitled to immunity to waive that immunity we have attained that objective in a more direct way than by the device of using a nominal defendant. It seems to the Government that the measures concerning third party insurance, which are summarised in the paper I circulated to the House earlier today, help to encourage that sort of outcome. Whether or not this is the final consideration, it does mean that there is no greater financial penalty, liability or obligation on the person who enjoys diplomatic immunity if that person waives diplomatic immunity. The third party insurance cover means that whatever liability has to be met, there is provision to meet it.

If they waive their immunity they do not place themselves at any financial disadvantage. We feel that the position has also been strengthened by the Convention which we are now adopting because the Convention itself enjoins on diplomatic missions this procedure of waiving immunity in such cases. As I have already indicated, over recent years we have found in practice a readiness on the part of persons who enjoy diplomatic immunity to waive that immunity from the jurisdiction of the courts.

Mr Killen:

– What about wrongs apart from motor car accidents?

Mr HASLUCK:

– It would be the same in the case * of* a suit for debt, a suit for damages or any other suit.

Mr Killen:

– But if there is no insurance cover they may be more reluctant.

Mr HASLUCK:

– The inducement would not exist in that case but most of the cases of which we have had experience have been either cases of debt or cases arising out of traffic accidents. In all cases we have found this readiness to waive immunity when requested.

The honourable member for Moreton (Mr Killen) referred to visiting missions or special missions that are not permanently resident in this country. At the present time the International Law Commission of the United Nations is engaged in another of its exercises in trying to draft a convention for special missions. The early drafts of certain articles have been circulated to governments for comment. So far as the Australian Government is concerned - we share this view with some other friendly governments - the present drafts extend to these visiting missions rather wider privileges than we think they should have. This matter is receiving attention, and as a result of international discussion and the submission of draft articles to members of the United Nations there will be eventually, we assume, another international convention governing the activities of visiting missions and special missions.

In this connection, the honourable gentleman referred particularly to such a body as the Tass Agency, lt would not be our present thought that this would be covered by a convention on visiting missions. We would consider that convention as likely to cover a different type of mission acting temporarily on a visit to the receiving country and carrying out either a political or a technical mission of an easily defined kind. The position of a single representative of an agency such as the Tass Agency or any other international information agency would not seem to us to come within the general field of diplomatic immunities and privileges as we see them at present. Certainly any present arrangements do not extend to any such agency and we cannot foresee at the moment the situation in which they would so extend.

I think that is all I am called upon to say at this stage by way of comment on the very helpful contributions made to the debate on these Bills. It remains only for me to thank the House once again for the care with which it has examined the provisions of this legislation and the recognition it has given to the merits of the legislation.

Question resolved in the affirmative.

Bills together read a second time.

In Committee

Diplomatic Privileges and Immunities Bill 1967

Clauses 1 to 7 - by leave - taken together.

Mr CONNOR:
Cunningham

– There is one matter in clause 7 on which we seek information. It will be noted that clause 7(1.) adopts the provisions of Articles 1, 22 to 24 inclusive and 27 to 40 inclusive of the Vienna Convention on Diplomatic Relations and gives them the force of law. The clause omits to adopt the preamble and we are particularly concerned at the failure to adopt the last recital in the preamble, which reads:

Affirming that the rules of customary international law should continue to govern questions not expressly regulated by the provisions of the present Convention, . . .

There should be no ambiguity about the point as to whether courts are, in this connection, duty bound to apply international law, and we would like to know the Government’s reason for failing specifically to adopt the preamble.

Mr HASLUCK:
Minister for External Affairs · Curtin · LP

– The general pattern of this Bill is that there are certain provisions in the Convention which will require the passage of legislation so that they can become part of the Australian law. Those are the ones to which we have specifically referred in clause 7. There are other Articles in the Convention which do not lend themselves to incorporation in the present Bill but that does not mean that the obligations which Australia will undertake internationally will be disregarded.

Mr Connor:

– But the question we raise relates specifically to customary international law. We feel the omission to which I have referred should be corrected.

Mr HASLUCK:

– I do not quite follow the honourable gentleman. In the preamble to the Convention the parties affirm that when Australia, subsequent to the passage of this legislation, becomes a party to the Convention we, as a Government, will affirm that the rules of customary international law shall continue to govern questions not expressly regulated by the provisions of the present Convention. The advice given *.o me is that that affirmation will not require us to pass legislation to give force to it but we will make the affirmation when we adopt the Convention after passage of this legislation.

Clauses agreed to.

Remainder of Bill - by leave - taken as a whole.

Mr CONNOR:
Cunningham

– I turn to clauses 11 and 14 and refer the Committee to Article 32, paragraph 2, which states:

Waiver must always be express.

We feel that the meaning of those words should be amplified. There should be some clarification of the meaning of an express waiver. Clause 14 seems to deal with immunities. The Opposition has some doubts on this matter and would like clarification. Is it intended that a certificate from the Minister shall cover all matters of this nature, or is evidence to be adduced in a particular case? Further, is specific evidence as to waiver to be adduced by other means? Paragraph 1 of article 32 states that immunity from jurisdiction may be waived. Is it contemplated by that provision that it shall be absolute waiver, waiver in a particular situation or waiver for a particular person or group of persons? We feel that the wording of clause 14 is very loose and that it would interpose the Minister and his Department as a court of preliminary investigation.

New issues arise because of clause 11, which contains reference to acts performed by persons in the course of their duties. This matter has not previously been litigated and we want to be sure of what evidence is to be given before a court. Is a particular officer to be authorised for that purpose by a head of a mission? Alternatively, is there to be some form of documentation which is notarised, or in relation to litigation precisely what rights are conferred on the respective parties to seek a certificate under clause 14 from the Minister? Clause 14 states: (1.) The Minister may give a certificate in writing certifying any fact relevant to the question . . . (2.) In any proceedings, a certificate given under this section is evidence of the facts certified.

The Minister may choose not to give a certificate. Further, if the Minister and his Department are to be interposed as a court of preliminary inquiry, the possibility of confrontation that would occur in the course of the conduct of ordinary litigation in which it is necessary for witnesses to be called and cross-examined is by-passed. Conceivably the head of a mission may choose to tell the Department that a technical officer or servant was on an errand associated with the performance of his duties as an employee - this is stating an extreme case of course - when that officer was actually on his way to the Gold Coast for a holiday. How would a case of that nature be investigated?

Mr HASLUCK:
Minister for External Affairs · Curtin · LP

– Clause 14 states: (1.) The Minister may give a certificate in writing certifying any fact relevant to the question whether a person is, or was at any time or in respect of any period, entitled to any privileges or immunities by virtue of this Act, of an Act repealed by this Act or of the regulations.

Perhaps I should first dispose of the last few phrases of the clause. It will be necessary in an interim period during which proceedings might be taken under existing statutes that are to be repealed by this legislation for a certificate to be given; so that we can perhaps disregard the last two phrases and concentrate upon the main provision. I understand the position to be that until a claim is made against a person in a diplomatic mission, in one capacity or another, it is not a matter of concern to the Minister or to the Department of External Affairs; but, the claim having been made, the matter having reached the courts and diplomatic immunity having been claimed by a defendant, then I assume that the court, or perhaps one of the parties - I am not sure of that, but I assume the court - can call upon the Minister to certify. The Minister certifies only to the fact that is relevant to the question of whether the defendant is entitled to diplomatic immunity.

Under the proposed law diplomatic immunity will not be absolute. For certain persons it will apply only to certain periods of the day and only to certain actions that they perform, and not to the whole of their actions. In such cases the certificate will be either a certificate saying that the person is entitled to a total immunity or that he is entitled by virtue of the position he occupies to immunity only in respect of certain acts performed at certain places on behalf of his own government. That certificate will be evidence, but not conclusive evidence. It will be for the court and the court only to determine whether there is immunity. A person may claim immunity; a certificate is given; other evidence can be called, if the court wants further evidence or if the parties want to produce other evidence. Then the court makes a decision whether the immunity or the privilege that is claimed really exists in law and should be recognised.

Mr KILLEN:
Moreton

– I wish to raise a small point. The House of Lords in 1928 laid it down that what the Foreign Office said with respect to the diplomatic status of an individual was to be accepted as being quite conclusive. I cite the case of Engelke v. Musman. The Minister has said in a guarded reply to the honourable member for Cunningham (Mr Connor) that a certificate given by the Minister would not necessarily be regarded as conclusive evidence. I respectfully suggest that on British practice - and there is no reason why it should not be followed in this instance - if the Foreign Office in England has said that the diplomatic status of a particular person is such and such, that is the end of the matter and the courts regard it as conclusive. I fail to see why the Minister’s statement here in Australia should not be similarly conclusive. If he says that a matter is conclusive, as far as I am concerned that would be the end of it.

Mr HASLUCK:
Minister for External Affairs · Curtin · LP

– We do not wish to make the Minister’s certificate conclusive evidence. I instance a typical case - say a traffic case or the case of a suit for debt. The sort of certificate that the Minister would give would be to the effect that the person named in the certificate is, say, a chauffeur employed by such and such a diplomatic mission and that his national status is so and so. Then it would be a matter for the court to say, after examining the Convention and the legislation now before us - assuming that it becomes an Act - that a person so certified by the Minister is entitled to this or that degree of immunity.

Remainder of Bill agreed to.

Customs Tariff Bill (No. 2) 1967

Excise Tariff Bill 1967

Pay-roll Tax Assessment Bill 1967

Income Tax Assessment Bill 1967

Sales Tax (Exemptions and Classifications) Bill 1967

Bills taken together as a whole.

Bills agreed to.

Six Bills reported without amendment; report adopted.

Third Reading

Bills (on motion by Mr Hasluck) together read a third time.

page 779

TARIFF PROPOSALS

Mr HOWSON:
Minister for Air · Fawkner · LP

– I move:

Customs Tariff Proposals (No. 6) (1967)

The Customs Tariff Proposals which I have just tabled relate to proposed amendments of the Customs Tariffs 1966. The amendments will operate from tomorrow morning. The tariff alterations in Proposals No. 6 incorporate changes consequent upon the adoption by the Government of three reports by the Tariff Board. These reports relate to cycle saddles, electrical capacitors and plastic corrugated plates, sheets or strip. Since 1963 the local manufacturer of cycle saddles has expanded production. This has resulted in reduced costs, stable prices and increased sales together with reasonable profits. The Board considers that the company has achieved relative stability and is worthy of continued assistance so long as it can operate within the existing level of protection. Accordingly the Board has recommended no change in duties on saddles for motor cycles and adult bicycles which are the main lines of production. Next, the Board recommended an extension of assistance to cover the local manufacturer’s entire range of production of cycle saddles. This recommendation has been adopted. Saddles for children’s bicycles and wheeled toys will be dutiable at ad valorem rates of 40% general and 30% preferential. These rates involve some increases and some reductions in the present duties but the Board believes that any consequent reduction in protection would be offset by the extension of the range of goods protected.

I turn now to the Tariff Board report on electrical capacitors. The present duties on power factor correction capacitors are 50% ad valorem general and 221/2% ad valorem preferential. Other capacitors covered by the report are dutiable at ad valorem rates of 100% general and 90% preferential. This level of protection was imposed following reports by the Board in 1962. With power factor correction capacitors, the Board found that electricity supply authorities have been changing from the large size capacitors made locally to imported banks of small units based on improved techniques of manufacture. The local industry’s price disability is now high, but the Board considered that, if production were geared to the new type unit, the disability would be reduced. Capacitors are an important cost element for electricity supply authorities. The Tariff Board considers that there is no justification for recommending duties of the order requested which could detrimentally affect the cost structure of electricity distribution in Australia.

The Board concluded that duties of 45% ad valorem (general) and 271/2% ad valorem (preferential) should provide a reasonable level of assistance to efficient local manufacture of the new type capacitor and has recommended these rates for power factor correction capacitors generally. These duties are in line with the tariff treatment accorded similar electrical equipment. In 1962, a high level of protection was accorded other capacitors in order to give the industry an opportunity to reorganise production and reduce costs. In the present report the Board has pointed out that there is still scope for cost economies. However in the Board’s opinion the local industry has been given ample opportunity to rationalise and consolidate its position behind a very high level of protection. The Board considers local manufacturers should now be given an opportunity to demonstrate whether they are economically viable under a reasonable level of assistance. It has recommended that the present duties of 100% (general) and 90% (preferential) be reduced to the rates proposed for power factor correction capacitors.

Finally I turn to the Tariff Board report on plastic corrugated plates, sheets or strip. While the Board’s inquiry covered all types of plastic corrugated plates, sheets and strip, representations were made on polyvinyl chloride products only. No sustained request for protection was made on other types of plastic corrugated plates, sheets or strip and the Board recommended no change in the existing duties on these products. Most corrugated polyvinyl chloride sheets are dutiable at present at rates of 40% ad valorem (general) and 25% ad valorem (preferential). The Tariff Board found that the only local firm operates efficiently and has the capacity to meet local demand with material of good quality. Further, it is an important outlet for local polyvinyl chloride resin producers. However similar imported products are considerably cheaper than the local product. This is due, in part, to smaller production runs but mainly to the higher Australian cost of polyvinyl chloride resin.

The Board concluded that the industry is worthy of assistance provided it can achieve capacity or near capacity production. It has recommended that the duty rates for corrugated polyvinyl chloride sheets be 14 cents per pound (general) and 14 cents per pound less 15% ad valorem (preferential). The ad valorem equivalent of the general rate would be in the vicinity of 70% to 80% on the cheapest imported sheet but considerably less on the better quality grades which are more comparable to the local product. The goods covered in this report are covered also by a current general inquiry into the plastics industry. The Board has said that it may review the recommendations made in the present report in light of the evidence presented at the later inquiry.

Details of all the tariff alterations in Proposals No. 6 are contained in the summaries of tariff alterations attached to copies of the proposals circulated to honourable members. I commend the proposals to honourable members.

Debate (on motion by Mr Barnard) adjourned.

page 780

TARIFF BOARD

Reports on Items

Mr HOWSON (Fawkner- Minister for

Air) - I present reports by the Tariff Board on the following subjects:

Cycle saddles.

Electrical capacitors.

Plastic corrugated plates, sheets or strips.

Ordered to be printed.

page 780

TARIFF PROPOSALS

Mr HOWSON:
Minister for Air · Fawkner · LP

-I move:

Excise Tariff Proposals No. 1 which I have just tabled relates to proposed amendments of the Excise Tariff 1921-1965. The amendments will operate on and from tomorrow morning. The purpose of this measure is to give effect to a recommendation of the Australian Canned Fruits Board that the excise duty presently imposed under the provisions of the Excise Tariff (No. 2) of 1963 on canned apricots, peaches, pears and mixtures thereof be increased from 20 cents to 30 cents per dozen 29 oz cans, basic containers, with equivalent increases on other can sizes.

It will be recalled that the Government in introducing amending legislation in 1963 to reconstitute the Australian Canned Fruits Board agreed to the imposition of an excise duty on canned deciduous fruits entered for consumption within Australia so as to place at the disposal of the Board additional funds to enable it to assist the industry in developing markets for the greatly increased supplies of fruit that have become available. The proposal advanced by the industry at the time, with the substantial support of canners and growers, and accepted by the Government was that the maximum rate of excise duty that could be imposed would be 60c per dozen 29 oz cans with the operative rate from time to time within this ceiling to be determined on the recommendation of the Board. The rate at present being imposed - 20c per dozen 29 oz cans - yields approximately $1.2m per annum. This money is being expended by the Board in exercising its function under the provisions of the Canned Fruits Export Marketing Act 1963 ‘to encourage, assist and promote the exportation of canned fruits from Australia and the consumption and sale outside Australia’.

In recent years there has been a large increase in the availability of canned deciduous fruits for export. Production has increased from 7.3 million cartons in 1963 to an estimated 10 million cartons in 1967 and the expectation is that the availability of fruit for canning from existing plantings will continue to grow. Home consumption is ranging between 2i million to 3 million cartons per annum which means that at present pack levels the availability for export is of the order of 7.5 million cartons per annum. In 1966 there was a record movement of 6.6 million cartons to overseas markets, but even so the stock carryover assumed an embarrassing level of 2 million cartons. Our main competitor, South Africa, is also increasing production at a fairly fast rate and has now taken over as the leading supplier in the major United Kingdom market.

The funds derived from the excise duty have enabled the industry to obtain some foothold in the major markets on the continent of Europe, particularly in Germany where the sales level has risen from a nominal level in 1963 to about 800,000 cartons last year. The Board has also been able to intensify promotional activity in Canada with a corresponding increase in trade from 150,000 cartons in 1963 to 700,000 cartons in 1966. The position has now been reached where the Board, backed by canning interests representing a substantial proportion of total production and the central grower organisation - The Australian Canning Fruitgrowers Association - seeks this increase in the excise duty so that additional funds will be available for the further developmental work needed to move the increased supplies of fruit currently available.

The Government is fully seised of the need to give all reasonable assistance to the Board and the industry in their efforts not only to consolidate but to expand all possible overseas outlets for our canned deciduous fruits. It agrees that the Board will require additional revenue for the purpose at this stage. Accordingly it has been pleased to accept the Board’s recommendation which, at present home consumption levels, will provide an additional

S600.000 in a full year. I commend the proposals to honourable members.

Debate (on motion by Dr J. F. Cairns) adjourned.

page 781

TASMANIA GRANT (GORDON RIVER ROAD) BILL 1967

Second Reading

Debate resumed from 23 February (vide page 116), on motion by Mr McMahon:

That (he Bill be now read a second time.

Mr BARNARD:
Bass

- Mr Deputy Speaker, the Tasmania Grant (Gordon River Road) Bill 1967 seeks to amend the Tasmania Grant (Gordon River Road) Act, which was passed by this Parliament in April 1964. The original Bill provided for a grant of S5m which was to be expended by the Tasmanian State Government by 30th June 1967. The payments were to be progressive and were to be made payable to the State as the road was constructed. Honourable members will recall that the grant provided for the construction of fifty miles of access road from Maydena to the junction of the Serpentine and Gordon rivers. This Bill seeks to extend to the summer of 1967-68 or possibly 1968-69 the period in which payment will be made to the Tasmanian Government. The reason for this, as outlined by the Treasurer (Mr McMahon), is that the Tasmanian Government believes that the road should be allowed to consolidate before the final programme of sealing is undertaken. In view of the climatic conditions in this area, this appears to be a reasonable request. Naturally the Opposition does not oppose the legislation.

By the end of June 1966 a sum of 53,153,000 had been expended on the access road. It is expected that the State Government will have expended $4,750,000 by the end of June this year. This will leave $250,000 to be expended. I believe that the road has proved to be an important factor in Tasmania’s development. In recent years the demand for power has increased, and it will continue to increase. I am sure that most honourable members, particularly those who come from Tasmania, appreciate the initiative of the Tasmanian HydroElectric Commission under the leadership of the Commissioner, Mr Knight. The power output capacity of the State has continued to increase, particularly during the period of office of the Tasmanian Labor Government. By 1973 the output capacity of the Tasmanian system will exceed the ultimate output of the completed Snowy Mountains scheme, which is stated to be 5,500,000 kilowatt hours per annum. All this has been achieved with very little or no assistance from Commonwealth resources.

In 1964 the Commonwealth decided to approve a grant to the Tasmanian Government of $5m for the construction of the Gordon River road. The history of the grant is well known to honourable members. It has been stated on other occasions that the grant was made initially for political purposes. I do not want to be so ungenerous as to agree with this contention. Of course, it was made on the eve of the Federal election in 1963. But regardless of the issues involved, the grant was made for a specific purpose. I think it has proved to have been of invaluable assistance to the Tasmanian Government. So, regardless of the Government’s original intentions one must concede that in the circumstances the grant was well timed, was necessary and was not ungenerous. All Tasmanian members in this House will appreciate the Government’s action. It has made possible the building of a very valuable access road which would have been beyond the financial resources of the Tasmanian Government in 1964 and which even today would be beyond its resources. Although the grant of $5m has now largely been expended, it has made possible the construction of a valuable road which will enable the Tasmanian HydroElectric Commission to continue its investigations into the hydro-electric potential of the area. Already valuable work has been done in this connection.

The plan is a long term one. No doubt it will be many years before the State Government is able to complete the project and bring to fruition the plans that it has for the area. The road was developed through what was virtually unexplored country. Those honourable members who have referred to the debate which took place in this Parliament in 1964 will have had an opportunity to consider the early history of this area of Tasmania. If I remember correctly the honourable member for Wilmot (Mr Duthie), the former honourable mem ber for Franklin and, I think, the honourable member for Denison (Mr Gibson) all referred to the early history of this part of Tasmania. They reminded us that this area had remained largely unexplored since the early days of colonisation but that it would now be opened up, thanks to the Commonwealth’s grant.

So, very valuable work has been done. The road is virtually completed. It remains to be sealed. This will be done by the end of June 1968 or June 1969. In addition to enabling the State Government to extend its hydro-electric system, the building of this road will open up country to tourists, and this must ultimately prove of tremendous benefit to the State. The area has extensive mineral and heavy timber resources. No doubt these will be developed by the State Government in the course of time.

Although the development of the Gordon River region has been made possible largely as a result of the Commonwealth’s grant of $5m, this amount is only a fraction of the ultimate cost of development that will take place in the area. When this subject was debated in the House in 1964 the report of the Commissioner of the Hydro-Electric Commission, Mr Knight, was freely quoted. If I remember correctly Mr Knight indicated that the Tasmanian Government ultimately would spend $300m on the development of power stations in this and other areas in Tasmania, but primarily in this area. So, set against the total prospective expenditure in the area, the Commonwealth’s grant of $5m, extending over four years, represents a relatively small outlay.

With its lakes and rivers Tasmania is geographically ideally suited to the development of hydro-electric power. It is to the credit of successive Tasmanian governments that they have pursued plans for the development of hydro-electric power in the Commonwealth. No doubt when the final plan has been brought to fruition Tasmania not only will be able to meet all her needs industrially and commercially in this regard but also will be able to export power to the mainland States. The Tasmanian Government seized the opportunity to develop Tasmania’s natural resources. It has done so with great credit to itself and certainly in the best interests of the people of Tasmania. The opening up of the Gordon River area of Tasmania is the kind of development the

Opposition wants to see. We hope that the Commonwealth will encourage more development of this kind in Australia.

This was the first grant Tasmania had received; I hope it will not be the last. Honourable members on this side of the House, particularly the honourable member for Wilmot, have referred on other occasions to the need for additional grants to be made to Tasmania. The honourable member for Wilmot has been most active in encouraging and requesting the Government to make a grant to Tasmania for the construction of a thermal power station in the Fingal Valley. I remember that on another occasion a deputation of Tasmanian members of the Parliament waited on the Prime Minister with a view to obtaining Commonwealth aid for Tasmanian development. Other requests have been placed before the Government for special grants to be made to Tasmania, but they have been refused. The grant that is the subject of this Bill was the first made by the Commonwealth to Tasmania for developmental purposes. The Opposition believes that balanced development is necessary throughout the Commonwealth. In many instances, whether development flows in the way the Opposition believes it should flow will depend on the resources available to the Commonwealth. Generally the Commonwealth’s attitude in the past has been that develomental projects should be left to private enterprise but there are many developmental projects in Australia which private enterprise is not prepared to tackle. The one now before the House is a project that no private enterprise concern would have been prepared to tackle. So it was vital that the Tasmanian Government should receive financial assistance from the Commonwealth for this project. Mr Knight, the Hydro-Electric Commissioner, presented a well documented plan to the Government in connection with the Gordon River Road. Obviously the Government in 1964 was impressed by Mr Knight’s proposals. So the grant was approved. I am sure that the Tasmanian Government recognises that the grant has enabled it to complete or almost complete a very valuable road in Tasmania.

As I said earlier, this is only a short measure. It extends the period of operation of the principal Act. It extends until June 1968 or June 1969 the period during which the money will be paid to the Tasmanian Government. The reasons for this have been outlined by the Treasurer in introducing the Bill. The Opposition concurs with the proposals put before the Commonwealth by the Premier of Tasmania. We therefore do not oppose the legislation.

Mr GIBSON:
Denison

– This Bill, which really operates as an extension of time to the parent Act as explained by the Treasurer (Mr McMahon) in his second reading speech, in my opinion is a sensible reaction to a sensible request. In the building of this Gordon River Road - I propose to refer to that later in my remarks this afternoon - it was found, on sound technical advice, that due to the extremely heavy rainfall in the area through which the road is being constructed it would not be desirable to continue with the sealing of the road until one or two years had passed to enable it to settle down. Therefore, the request of the Premier of Tasmania for an Act to enable the original Tasmania Grant (Gordon River Road) Act to be extended for a further two years has been acceded to by the Commonwealth Government.

About the middle of last year I took the opportunity to have a look at this road. I was taken to the area by the Hydro-Electric Commission which is building the road on behalf of the State Government It was pointed out to me that on an average 100,000 cubic yards of earth had to be moved for every mile of road constructed. At the time I was there the men were working on the last few miles of the road. In the 4i miles up to the point they had reached - this being towards the end of the road - it was estimated that a quarter of a million cubic yards of earth had been moved for every mile. That will give honourable members an indication of the type of country through which this road is being built. About fourteen years ago I had the opportunity to bush walk in the area. I can assure honourable members that it is very difficult country indeed. On one occasion I took a day to complete two miles. I am glad to say that on the occasion on which I went there by courtesy of the Hydro-Electric Commission we were able to move, even on the unsealed road, at a rate far in excess of my pedestrian progress.

One point which occurs to me and which I shall mention now is that it might be appropriate for the Tasmanian Government, as a matter of gratitude, to recognise this non-repayable grant of $5m from the Commonwealth Government by naming the road the ‘Menzies Road’.

Opposition members - Oh!

Mr GIBSON:

– Despite the sneers of honourable gentlemen opposite, I point out that the Menzies Government provided all of the money for this road. Of course, the honourable gentlemen who are interjecting would realise that in Tasmania there is good precedent for this suggestion. The present Premier and his predecessor did not wait for posterity to recognise them. We have a Reece High School and a Robert Cosgrove High School. I would think that as a matter of natural courtesy we might well have a Menzies Road.

I am reminded that the present Australian Labor Party conference in Tasmania agreed, despite the Premier’s opposition, to a motion calling for the abolition of State commissions as soon as practicable. I do not know whether the Premier will accede to that directive from the State ALP conference. I hope that he will not. I believe that the sensible approach to this matter was summed up accurately in an editorial in the ‘Mercury’ of 15th March, which stated:

Abolition of commissions is neither practical nor desirable. They have proved their usefulness in a modern State and will continue to play thenspecial part.

I hope that the Premier does not accede to this request or directive. History shows that in the Labor Party there is a certain danger in not acceding to directives of State conferences. I hope that the Premier does not lose too much heart when he looks at what happened to Senator Gair who, I understand, when he was Premier of Queensland, refused to obey a directive to introduce three weeks annual leave. Of course, history records what happened to him.

I turn now to today’s ‘Mercury’ in which I am delighted to read the headline ‘State Wants $55m Aid for Power’. The article states:

Tasmania is seeking Commonwealth aid up to SSS million for the Gordon River power development. The Minister for National Development disclosed the existence of the application by Tasmania when he addressed the conference of the Institute of Engineers at Hobart yesterday.

It goes on to quote the Minister as saying:

The Federal Treasurer is very hopeful that he will be able to find a way of financing this project in the Gordon River area.

One way in which this project could be financed would be by overseas loan. Another and perhaps more practicable way at this time would be a loan at the semigovernmental level. Of course, that would have to be approved by the Australian Loan Council.

In my view, Tasmania is entitled to this money because, along with other Australians, for many years we have been paying towards the cost of the Snowy Mountains scheme. I believe that Tasmania’s turn has now come. Honourable members who express some surprise about this will be interested to know the potential of the Gordon scheme. It has been estimated that the middle Gordon area - the area that we are discussing - if fully developed, would have an annual energy output of 4,800 million units. In order to give honourable members an indication of the size of this project I point out that the completed Snowy Mountains scheme is estimated to have an annual energy output of 5,500 million units. So it will be seen that this middle Gordon hydro-electric scheme in this small State is comparable with the largest scheme in Australia. I believe that there is a very strong case for the Tasmanian Government receiving the assistance for which it asks to enable it to proceed with this scheme.

I was interested to read in the ‘Australian’ of Wednesday, 15th March, an article that stated:

There are already rumbles of discontent among some of Tasmania’s traditionally large power consumers.

Honourable members from Tasmania will recall with regret that in November 1963 it was necessary to have a 15% industrial power cut. I mentioned this in my speech on the parent Bill - which is now the Act - to the Bill that we are discussing this afternoon. In Tasmania there is the problem that, with the vast expenditure for a State of its size on hydro-electric power, it is not providing high employment opportunities for Tasmanians. The excellent HydroElectric Commissioner, Mr Knight, pointed out in the excellent report that secured the original $5m grant that although there had been to that date capital expenditure of $234m it would cost the State a further

S300m fully to develop the middle Gordon area. The point that I am making is that, in a State the size of Tasmania, if we are to have this amount of the State’s financial resources devoted to hydro-electric power we cannot afford to have industrial power cuts. I quote the following from the article in the ‘Australian’:

According to one west coast metal man-

The Premier of our State is a west coast man, so he would well understand the terms which are used and to which I will refer:

Tasmania needs to cut its power costs by about 50% to become viable.

The article goes on to quote the following words of the west coast metal man:

In fact, Tasmanian industry doesn’t get power from hydro-electric generation much cheaper than Victorians do from brown coal. They have to-

There he used a phrase which I understand the Duke of Edinburgh recently applied to British industry, but I would prefer to substitute for it the phrase ‘pull up their socks’: and the Government is aware of this. 1 believe that it is fallacious to suggest that one can compare Victoria with Tasmania in this respect. Obviously, the capital cost of installing thermal or nuclear power stations or brown coal power stations has to be considered in relation to the number of people in the community. In my opinion, it would not be economic to have a nuclear power station in Tasmania, although I am glad to see that our Hydro-Electric Commissioner, who in my opinion is one of the foremost men in the world in the field of power, is sending a Tasmanian along with six other Australians to a Canadian nuclear power conference. He believes in keeping up with these developments.

From time to time we hear idle talk to the effect that Tasmania has put all its capital into hydro-electric development whereas any minute there will be a breakthrough and nuclear power will become much cheaper per unit than hydro-electric power. We must always bear in mind the size of the State about which we are talking. I believe that we have gone so far with the development of hydro-electric power in Tasmania that whether we like it or not we cannot now turn back. I was disquieted to read in the report in the ‘Australian’ that I have mentioned that Mr Rod Henry, the General Manager of Australian Newsprint Mills Ltd at Boyer, said that the HydroElectric Commission’s water storage capacity was very low. He went on to say:

There is still a risk of power rationing and industry is not very satisfied with the price now - though it was in the beginning.

I think this shows that there is further reason why Tasmania should receive from the Commonwealth the $55m for which it is asking to provide for development of the Gordon River scheme. If we are to avoid further cuts of industrial power the present scheme will have to continue without delay. I hope that it will do so. I ask, however, that the views of the South West Committee, which is an organisation formed to ensure the preservation of the natural assets of south-western Tasmania, be borne in mind. I hope that the Hydro-Electric Commission - and the Tasmanian Government, for that matter - will ensure that care is taken to prevent the area from being disfigured by unnecessary destruction. Indeed, I urge that the Commission exercise the utmost care to ensure the preservation of the natural assets of the region. I need not add, in view of recent history in Tasmania, that particular care ought to be taken to prevent destruction by fire.

There is one other point to which I should direct attention, Sir. I notice that clause 4 of the Bill provides that the expenditure to be made under the terms of the principal Act - up to $5m - shall not be taken into account for the purposes of Commonwealth Aid Roads Acts. I believe that this is very important.

Mr Duthie:

– Hear, hear!

Mr GIBSON:

– As the honourable member for Wilmot, who has just signified his assent to my last observation, is aware, the Tasmanian Government relies heavily on Commonwealth road funds. The last figures that I saw indicated that more than 99% of the State’s rural roads are provided for out of Commonwealth Aid Roads Grants, as are 47% of the roads other than rural roads. I am certain that Tasmanians on both sides of the House welcome this Bill. As I have stated, it merely provides for an extension of time, as it were. Nevertheless, we in Tasmania are grateful to the Commonwealth Government for introducing it. I trust that I am not anticipating too much, but I hope that we shall receive further assistance to develop resources that are vital to our State.

Mr DUTHIE:
Wilmot

- Mr Speaker, the Tasmanians in this Parliament and, indeed, all Tasmanians are grateful for the grant that was made, out of the air, as it were, two years ago for the construction of the Gordon River Road. My colleague, the honourable member for Bass (Mr Barnard), who is Deputy Leader of the Opposition, explained the genesis of this grant. It was very strange. It came to light after a question asked in this House on Wednesday, 23rd October 1963, by the previous member for Franklin. The first that we on this side of the Parliament had heard about a grant for this road was the answer to that question which was directed to the previous Prime Minister and which obviously was a Dorothy Dix-er.

Mr Barnard:

– I do not think that the former member for Franklin was surprised, though.

Mr DUTHIE:

– No, he was not surprised. The former Prime Minister replied that a grant of $5m was to be made for the construction of a road from Kallista, near Maydena, to a point near the junction of the Gordon River with the Serpentine River.

Mr Pearsall:

– Even before a grant had been asked for?

Mr DUTHIE:

– It had been asked for, but that was unbeknownst to us. However, we naturally were grateful for it. We were at that time on the eve of an election and we may be forgiven for believing that the making of the grant at that time had a strong political motive. The interesting feature is that, the former member for Franklin having asked the question which prompted the announcement that a grant would be made, we assumed that the road would be largely in his electorate. However, investigation during the afternoon, subsequent to the asking of the question, revealed that the entire fifty-five miles of the road would be in the Wilmot electorate.

Mr Pearsall:

– That just shows just how unselfish the former member was.

Mr DUTHIE:

– He certainly was unselfish in asking for a grant for a road located entirely in the Wilmot electorate. Two members from Tasmania who have already spoken in this debate have outlined certain aspects of the grant including its impact on the Tasmanian economy and its purpose. The purpose of this grant is very important. The road that it will enable to be constructed will lead to the construction of power stations costing a total of $300m. They will comprise the next big project to be undertaken by the Tasmanian HydroElectric Commission. The Mersey Valley scheme, which provides for the construction of seven dams, is now under way. It will divert the waters of two rivers to the Forth River between them at a cost of about $120m. The whole of this project happens to be in my electorate also. It is a colossal scheme. It will be completed in 1972, two years ahead of the programmed time. The acceleration of the work has been due to the demand for power by new industries being established in Tasmania. The big scheme in the Gordon River area will consist of approximately five dams which are to be constructed in the narrow gorges of this wild and largely uninhabited area. I have with me a map of Tasmania on which I shall indicate to honourable members the route of the proposed road, showing its location in relation to the rest of the State, and, incidentally, the significance of the Wilmot electorate in the Tasmanian scene.

Mr Barnard:

– Would the honourable member like to have the map incorporated in Hansard?

Mr DUTHIE:

– I regret, Mr Speaker, that it cannot be incorporated in Hansard. However, I shall use it during my speech to give honourable members an idea of the location of the road. As honourable members can see, the divisions of Wilmot, Bass, Braddon, Franklin and Denison all are shown on the map. The Wilmot electorate comprises one half of the island - 13,000 square miles. The Denison Division is the small dark area centred on Hobart. It is interesting to note that the Franklin, Braddon and Wilmot Divisions all meet on the Gordon River, which rises to the north east of that meeting point and swings round in a great arc to the south and west, eventually to run into Macquarie Harbour and thence to the sea. Maydena in the upper reaches of the Derwent Valley is the point at which the Gordon River Road begins. From there it runs fifty-five miles through virgin, uninhabited and almost unexplored country to the northern bank of the Gordon River near the point where the Serpentine River runs into it At that site on this beautiful river will be constructed homes for about 3,000 people, and a town will be established.

What I have said indicates to honourable members the general relationship of this road to the rest of the State. I might add that it runs through country that was traversed by Gabbett and his six companions on the journey during which, one after another, all but he were eaten. These men were convicts who escaped from the penal settlement at Macquarie Harbour and were the first white men ever to cross the country through which the Gordon River Road runs. As they proceeded from what is now the Braddon Division into what is now the Wilmot electorate they became hungrier and hungrier. All Gabbett’s companions disappeared one by one until only he was left. He had eaten them. Miraculously he found his way to Hobart, and there he was hanged.

Mr Barnard:

– Perhaps this ought to be called the Menzies Road.

Mr DUTHIE:

– It could equally well be called the Gabbett Road, because Gabbett and his companions were the first white men ever to tramp the area through which it runs. The Gordon River Road has been almost completed in two years of wonderful work by the Tasmanian Department of Public Works and the Hydro-Electric Commission. I pay a tribute to the men who have built it by their efforts over two years of tough weather conditions. The task has been very difficult. The country is the wettest in that part of Tasmania. The road passes through Tam forest and across button grass plains. It represents an engineering project of top class and the men and engineers responsible for its construction deserve our commendation. The grant for which this measure provides will therefore be of tremendous value. The Gordon River Road is not like a beef road constructed in north Queensland for the transport of beef cattle from one area to another. The Gordon River Road will be exclusively a road serving projects undertaken by the Hydro-Electric Commission. Along it will go all the materials needed to construct great dams, which, as I have mentioned will cost a total of $300m. Without the road, I do not think the Gordon River scheme would ever have come to fruition. I do not think the State of Tasmania could have afforded a $Sm road. Perhaps it could have found the money over five or six years, but not within two years. The completion of the road means that the Commission can get on with this big project much earlier than was originally expected. Mr Knight, the Commissioner, who was praised by the honourable member for Denison and his colleagues, put a splendidly documented case to the Government for this road. In this, he had the support of the Premier of Tasmania. The Commonwealth Government, to its credit, decided that it should spend money on this project.

It is the first national development project in Tasmania on which Commonwealth money has been spent since this Government came into office. From 1951 to 1964 about $960m was spent on national projects throughout Australia - irrigation works, roads and so on - but the Tasmanian Government did not receive a penny until 1964, when this $5m was granted. So we have not been unduly blessed by this Government in that respect. As the Deputy Leader of the Opposition (Mr Barnard) said, we put several other projects to the Government and asked for help. One was the Poatina irrigation scheme. Our request in that case was refused. We had plans for a thermal power station in the Fingal Valley, but our request for aid in developing that project was also refused. Other projects that have been put forward have not been approved. However, this one has been approved. In view of this help and the help in respect of the fire disaster, it seems that at last the claims of Tasmania are being considered by the Federal Government.

The total capital expenditure on hydroelectricity in Tasmania up to June 1965 was $292m. In 1965 we had a total installed capacity in our ten power stations of 1,333,400 horse power in the turbines and 807,550 kilowatts in the generators. In 1956 we had only 622,200 horse power and 447,100 kilowatts. We are expecting that when all the projects have been completed on the west coast - the Pieman River, King River and Gordon River projects - we will have in our power stations a capacity of approximately three million horse power. This will be a magnificent tribute to the Commission, the Government’s planning and to the men concerned in this vast enterprise. Electric power is widely used in Tasmania. The statistics show that 75% of domestic consumers use electric ranges, that 72% have hot water services and that 61% have both. We have itensified the electrification of farms in an endeavour to decentralise and to keep people on the farms. The Commission has pushed ahead with the extension of electricity supplies to farming districts all over the island. Only a few small pockets are left without electricity. We hope that, as these pockets become fewer and fewer, the guarantees required can be reduced and the cost of bringing electricity to isolated farmers can be lowered. The influence of cheap electricity on the Tasmanian economy has been enormous. The cost to the consumer is 1.7 Id per unit - the lowest in Australia. As other speakers have said, the industries that have come to the island as a result of cheap electricity have to be seen to be believed. At present it is estimated that about 98% of the Tasmanian population enjoy the benefits of electricity. This is probably one of the highest such percentages in the world. We are proud of that.

Generation of electric power in Tasmania now is concentrated in about ten power stations. The first of these stations was built in 1911. The Hydro-electric Power and Metallurgical Co. built a small dam on the Great Lake for the Waddamana scheme. In 1914, because the project was a failure, the Tasmanian Government took over the asset and the Hydro-Electric Commission came into being. At that time it was known as the Hydro-electricity Department. In 1916 two 23,500 kilowatt generators were installed at the Waddamana station. That was the beginning of government power, as it were, in Tasmania, although there had been a small hydro-electric station built near Launceston earlier than this. I think that, as a matter of history, it should be recorded. This station was on Duck Reach, above the

Cataract Gorge, near Launceston. It was erected by the Launceston City Council in 1905 and had a 450 kilowatt output. It was vested in the Hydro-Electric Commission in 1944 and was not used beyond 1955. That is the history of the beginnings of the development of hydro-electric power in Tasmania.

As a hydro-electricity project is the main purpose of the construction of this road, I would like to run quickly through the history of the power stations now operating in Tasmania. After the Waddamana station came the Tarraleah station on the Nive River. Construction commenced in 1934 and the station was opened in 1938. Then came the Clark Dam and Butlers Gorge project, started in 1939 and finished in 1952. Hundreds of Italian prisoners of war were used on this project. The impounded waters have an area of thirteen square miles and form Lake King William. That magnificent stretch of water has been created by this huge dam. In 1964 the Government began raising the level of the dam on the Butlers Gorge system by twenty-one feet, to increase the storage by 70%. Then there is the Tungatinah development scheme, begun in June 1953 and completed in about 1956. In the north of Tasmania, near Launceston, there is the Trevallyn Dam, which was created to provide power for the big Bell Bay works, later the Comalco works, in Georgetown in the electorate of Bass. This was opened in 1955. The water used came from three rivers. The next project was the Wayatinah power development project. This was in the south, along the Nive and Derwent Rivers. The Liapootah and Wayatinah stations were using water discharged from the Tungatinah and Tarralea power stations. The Wayatinah station was the first constructed and went into service in June 1954. The Liapootah station went into service in January 1960. Then came the Catagunya scheme, lower down the Derwent, which utilised the water flowing from the power stations I have mentioned - Tarraleah, Tungatinah, Liapootah, Wayatinah - plus water from the Florentine River. Preliminary construction work on this development began early in 1957. Power supplies were commenced in May 1962.

Sitting suspended from 5.54 to 8 p.m.

Mr DUTHIE:

– When I was interrupted by the suspension of the sitting I was outlining the history of power stations in Tasmania and had come to the Great Lake power development in the northern part of the island, which was commenced in 1958 and completed in 1964 at a cost of $5 6m. This is the famous Poatina scheme whereby we bring the waters of the Great Lake down 3,750 feet by tunnel and pipeline into an underground station 500 feet below the surface. From this scheme the water goes on to Launceston by the Lake River and the South Esk River into a dam which is part of the Trevallyn power project. The Lower Derwent power development scheme is in the lower reaches of the Derwent River. Earlier I named some of the big stations that are already producing power in the upper reaches of the Derwent. Altogether there are nine power stations on the Derwent River - much like the Tennessee Valley scheme in America. The three dams that are still being built are the Repulse, Cluny and Meadowbank Dams, which when finished will have a total capacity of 85,000 kilowatts. It is quite remarkable that Derwent River water is being used so many times in power development.

The Mersey-Forth development scheme is going ahead simultaneously with the Lower Derwent scheme in the central northern part of Tasmania, also in my electorate. Under this scheme two rivers will be diverted into a central river on which seven dams will be built. The scheme, which will cost $115m, was commenced in 1964, will be completed in 1972, and will produce 298,500 kilowatts. That is a general outline of the Hydro-Electric Commission development in Tasmania. There are eleven or twelve major dams, to produce nearly 1,500,000 kilowatts of power. Surely when one considers the size and economics of the island the power development will be acknowledged to be fantastic.

Let me come back specifically to the Bill before us, which concerns the building of a 55 mile road. I must congratulate the Premier of Tasmania, Mr Eric Reece, for proposing to the Commonwealth Government that the time specified in this legislation be extended by two years for the purpose of enabling sealing of the road. This road goes through some of the wettest country of the island which records up to 100 inches of rainfall a year. The idea of the Premier is to have the road consolidated before it is sealed and the Government has agreed to the extension of the Act for two years to enable the expenditure of the $250,000 balance of the money provided on the sealing programme over that period. I think that many projects provided with Commonwealth money break down because they are rushed and are not extended over a reasonable period. In this instance we all understand that roads have to consolidate - especially new roads - and the sealing programme in this case is important because of the wetness of the country. This Bill to extend the period for two years is a splendid piece of legislation. The Gordon River Road will provide access to a catchment area of 2,000 square miles. The river has the greatest potential of any river associated with the hydro-electric scheme in Tasmania up to date. It has a water flow two and onehalf times as great as that of the great Derwent River. It is not so long as the Derwent but is just as magnificent. It reaches the sea at Macquarie Harbour and it will be one of the greatest tourist attractions of the island for rugged scenery which resembles some of the fjord country of New Zealand. A terrific volume of water is pouring down the river, and this will be utilised.

A comparison of the Gordon River’s storage capacity with that of Lake Eucumbene in the Snowy Mountains Scheme is interesting. The Gordon River storage will be 120 square miles in area whereas Lake Eucumbene is only 56 square miles. The vastness of the Gordon River scheme may be illustrated in another way. The Snowy Mountains scheme when completed will provide an annual energy output of 5,500 million units. The Gordon River project when completed will produce 4,800 million units, which is not far below the capacity of the vast Snowy scheme. We will produce this output in Tasmania at an average cost of only .5d a unit, which is much cheaper than the cost under the Snowy scheme. Most of it will be produced on borrowed money, whereas the Snowy scheme has been financed directly out of revenue and will involve no charge whatever against posterity. We, the taxpayers of Australia, are paying for the Snowy scheme year by year while it is being built. The Gordon River scheme, for which this road is so important, will be spread over twelve years and will cost $300m. Obviously we have to ask for Commonwealth assistance for such a vast project as this. I hope that some of what we call national development money will be loaned to Tasmania during the twelve years duration of this project.

I might outline the economics of power development in Tasmania. The HydroElectric Commission employs about 4,700 men permanently on its projects, including men of all nations. It has to borrow money from the Commonwealth through the Loan Council, and the State Government allocates so much of its loan money to the Commission’s projects. Probably about 60% of Tasmania’s borrowings from the Loan Council are directed to hydro-electricity development. The Commission has also to borrow money in Tasmania. Every year it conducts borrowing programmes by advertisements on television and in the Press. On all of these borrowings interest is being charged at a quite substantial rate. The Commission is paying to the Commonwealth approximately $1,630,000 a year in interest on its borrowings, so when we get the money from the Commonwealth to build the road - a total of $5m - we shall only be getting back from the Commonwealth some of the money that the Commission has paid to the Commonwealth in interest over the years. It is a tremendous burden on a development scheme such as that of the Tasmanian Hydro-Electric Commission when all the work has to be done on borrowed money. Finally, I should like to mention tourism. This was mentioned by the honourable member for Denison (Mr Gibson). This road, which will go through some of the most magnificent scenery in Tasmania, will open up a vast new area for tourists. Though this road in southern Tasmania may seem remote from honourable members at the moment, many of them will, within the next ten, twelve or twenty years, be including this area in the places visited during their trips around Tasmania. Tourists will never be disappointed in the days that they spend in this magnificent area. They will be able to take boat trips up the Gordon River one way and road trips the other way. They will also be able to make a round trip from Queenstown on the rugged west coast of Tasmania, up to the Derwent River, then travel down the road and com- plete their trip by boat down the beautiful Gordon River to Queenstown.

I know that the naturalists of Tasmania are worried about this penetration of the road into virgin country. I admit that this is a point to consider as damage could be done to the magnificent scenery and to the flora ‘and fauna of the area, but I hope that the Government will control this area as it has controlled national parks in Tasmania and preserve it for tourists and for posterity in the best Tasmanian tradition. Most tourists are sensible when they travel. Many tourists come to Tasmania but one very rarely hears of them damaging scenic attractions. It is sometimes the local vandals and not tourists who carry out this type of destruction. Now that we are to get this road in this lovely area of the island we hope that the people who come to look at it and study it will preserve the natural beauty of this vast area.

The whole island of Tasmania will be ringed by bitumen within the next three or four years. That is a magnificent tribute to the Tasmanian Government when it is considered that Tasmania is a small State with only 380,000 people and that anything we undertake is costly. We have limited finances and yet within a few years there will be a bitumen road right around the island. That is a tribute to the State Government’s planning and will give a great boost to the tourist industry. If any who are listening to me tonight are thinking of a honeymoon - we have all been through it ourselves - I hope they will not forget to include Tasmania in their itinerary.

Mr SPEAKER:

– Order! I cannot see that that statement is relevant to the Bill.

Mr DUTHIE:

– It could be quite a honeymoon road later on. The Federal Government would be a party to starting off these marriages on the right footing because honeymooners who went to that area would be commencing their married life in beautiful surroundings. We in Tasmania are grateful for this grant. We assure the Government that it is being spent wisely and correctly and that Mr Reece will be able to account for every penny. The extension of the operation of the Act for two years will enable him to seal the road, give it permanence, and make it one of the best roads in Tasmania. The Hydro-Electric Commission itself has built more than 200 miles of roads in the island. Most of them are scenic roads in rugged parts of the island. The Mersey Valley scheme has opened up a tremendous tract of untapped and untamed country. These beautiful roads will eventually all be sealed. I pay a tribute to the Hydro-Electric Commission for the way it has opened up this new country. These magnificient roads would never have been constructed had it not been for the Commission.

Mr PEARSALL:
Franklin

– May I be pardoned for saying that it appears to me that this road is to be constructed by virtue of the generosity of the Commonwealth Government. Otherwise I wonder why we are wasting our time debating a Bill of this description. I want to refer to remarks that have been made by the honourable member for Wilmot (Mr Duthie) and the Deputy Leader of the Opposition (Mr Barnard). These honourable gentlemen said that it was rather a convenient piece of political timing in 1963 when the person whom I have had the honour to succeed in this Parliament asked a question on this subject. No doubt it was his diligence and application to duty that caused him to feel disposed to ask the question. It could only have been answered in the affirmative if the Premier of Tasmania had at that stage made application to the Commonwealth Government for some relief. It is quite correct that at the time this application had in fact been made by the State Government of Tasmania for a grant for this road. I join with honourable members in expressing gratitude that the application for this grant was acceded to and also that the Government today is able to say that it has no hesitation whatever in extending the period of operation of the Act. But to suggest that this was purely a piece of political machination is altogether incorrect.

Mr Duthie:

– I did not say that.

Mr PEARSALL:

– I beg the honourable member’s pardon if he did not say it.

Mr Duthie:

– I said it looked like it.

Mr PEARSALL:

– I believe that both honourable members opposite who represent Tasmanian electorates did make reference to this matter. I say to them: ‘If you live by the water, you have web feet and feathers and you swim, one can be pardoned for thinking you probably are a duck’. This application could only have been granted if a request had been made to the Commonwealth Government. I admit that it is not only members from the other side of the House who can be said to play politics and indulge in parliamentary parochialism. Still, to keep the record straight, I direct the attention of honourable members to some of the other things that have happened. One may well ask honourable members opposite who have spoken and suggested that this was a piece of political stunting: ‘What happened to the application that was made to the Premier of Tasmania last August seeking a Commonwealth grant for a cool store building to assist the orchard industry?’ At this moment such a building would be invaluable. The Premier chose not to tell the Commonwealth Government that this application had been made until after the last Federal election.

Since the honourable member for Wilmot has said that this is the first time we have ever obtained any money for Tasmania one might well remind him that this is the first time we have ever documented a reasonable case. We had to refer this whole matter to the Hydro-Electric Commission and allow the case to be prepared by the Commissioner, Mr Knight, because every other case that had been prepared by the Government of Tasmania had not been successful either because of deficiencies and weaknesses or by virtue of the fact that the case had never been put forward. Neither of the honourable members opposite who have spoken in this debate was at a public meeting in the Franklin electorate at which there was tremendous discussion about the Commonwealth’s assistance to the State and at which this very matter of the inability of the Commonwealth to supply funds for the State was raised. The Leader of the Government in the Senate was present at that meeting and gave one very valid reason for this. He said: ‘You have never asked for it’.

Mr Barnard:

– I do not think we were invited to the meeting.

Mr PEARSALL:

– It was a public meeting. Just as one honourable member sam he was not invited to a meeting the other day, neither was I, but I do read my newspapers and I was keen, enough, having read about this meeting in the newspaper, to attend it.

Mr Peters:

– The honourable member probably doubled the numbers at the meeting by going along.

Mr PEARSALL:

– That is not altogether correct but it is typical of the irrational and irresponsible statements I have listened to since I have become a new member of this Parliament. I pardon the honourable member for his ignorance, and for his benefit I point out that at that meeting a large number of people were present because the meeting was devoted to the discussion of an important issue, namely the damming of the Huon River and a proposal that a request should go forward to the Commonwealth Government in the hope that probably a barrage could be built across the Huon thus providing a natural lake or reservoir from which the whole of the orcharding areas of the Huon Valley could be irrigated. At the same time a bridge could be constructed across the Huon River at a place where it was most needed. The Premier gave an assurance to the meeting that be would document a case and submit it to the Commonwealth Government, but it is far more important to get money for other purposes in Tasmania and to my knowledge that case has never gone forward.

The honourable member for Wilmot said also that an application had been made for an irrigation scheme following the tail race of the Poatina Dam. That is true. A proposition was put forward by the State Government and the Hydro-Electric Commission said: ‘You can do this if you like. Put your proposition forward if you wish, but there will be no water with which to irrigate’. The Commission said that it could not guarantee to let the water through at the time when we would need it most for irrigation. No Commonwealth Government with any degree of responsibility to the people of Tasmania would have tolerated that kind of attitude. It was an absurd position to take up. If anyone wants to talk politics, perhaps I might refer to the issue that arose in Tasmania involving the Verolme United Company. I was supposed to be the vehicle of this piece of political machination. Would anybody have the audacity to suggest that there was not some political inspiration behind that matter? Of course there was. The Labour Party called a public meeting-

Mr SPEAKER (Hon. W. 3. Aston)Order! I am having a little difficulty in discovering the relevance of this matter to the Bill before the House. I suggest that the honourable member come back to the Bill.

Mr PEARSALL:

– I had some difficulty in following the issues when other members were speaking, if I may say so with respect.

Mr SPEAKER:

-I hope the honourable member is not reflecting on the Chair.

Mr PEARSALL:

– I am not, Sir. I thank you gentlemen, for your indulgence. It is most kind of you and I appreciate it at this early point in my political experience in this Parliament.

Mr Curtin:

– It was shocking of you!

Mr PEARSALL:

– Yes, a terrible thing. I beg your pardon, Sir. However, I am attempting merely to answer allegations that have been made in this debate, Mr Speaker, with respect, and which have been allowed to be made. It has been said that there was an occasion when, for the purpose of assisting the Hydro-Electric Commission, or of assisting Tasmania, a request was made for a loan for the purpose of building a thermal power station in the Fingal Valley to exploit the enormous coal reserves in that district. To the best of my knowledge that proposition was never put forward, although I do not deny the right to the honourable member to suggest that it was. However, the party of which I was then a member requested in 1952, that a thermal power station be built. The proposal was violently opposed by members of the Labor Party in Tasmania. So if anyone wishes to talk plain politics in this debate I can tell the House that the members of the Commonwealth Government are so many babes in the wood when compared with my erstwhile opponents in Tasmania.

I support this Bill wholeheartedly. I support the granting of two years extension because it is necessary to ensure consolidation of a heavy duty road before sealing it. The road is in an area of high rainfall. It will have to carry very heavy vehicles, especially during the period of construction that must one day inevitably take place. The headlines in today’s Hobart ‘Mercury’ were well timed. They point out that another approach has been adopted. Many of my questions are now answered - questions concerning the loss of the cool store on the wharf, the loss of the barrage on the Huon River and other matters which I have previously mentioned. It appears that now Tasmania is coming to the Commonwealth to ask for $15m to develop the Gordon River hydro-electric scheme. This road will open up an area which will become tremendously important. The road will provide the only means of access to this beautiful river. I agree wholeheartedly with the remark of the honourable member for Wilmot that this is one of the most beautiful districts in the world. Honourable members who have never seen this river and the country surrounding it in their undisturbed form have missed a glorious vista. They have missed one of the most beautiful views of natural beauty that Australia can offer today.

Mr Curtin:

– You have never been in Kingsford-Smith.

Mr PEARSALL:

– I beg the honourable member’s pardon; I do not think I have. But give me time. The honourable member and I have something in common; in all the years he has been in this Parliament he has not taken the trouble to visit Tasmania. I, however, have taken the trouble to come here and I suggest to the honourable member, in as kindly a manner as I can, that perhaps he may one day condescend to come to Tasmania and look at this beautiful river.

Mr J R Fraser:
ALP

– He has been to Tasmania and listened to you in the State House, and that made him sick.

Mr Curtin:

– And I did not think you would ever make it here.

Mr PEARSALL:

– It is an amazing thing that I have often wondered how you got here in the first place, so I suppose that makes two of us. As I was saying, this road opens up opportunities for the future development of Tasmania. The granting of this money presupposes that something more must be done for Tasmania. I freely admit that the maximum basic use has been made of our water resources. What we are envisaging at present is almost a duplication of the hydro-electric power provisions that we have made in the past. We have already harnessed most of the water supplies that are readily available. Nature has benevolently placed the main water sources on the highlands and allowed us to divert the waters of the Great Lakes from their southerly flow, which was nature’s intention, and send it through flues and tunnels in order to get the benefit of up to three times the basic power capacity of the water. These engineering feats have resulted in an edifice that will stand forever to the credit of the Chairman of the Tasmanian Hydro-Electric Commission, an exceptionally capable officer. We have now turned our efforts to the northern flowing rivers, and the construction of the road that is the subject of this Bill presupposes that we will go into the Gordon River area, where there is a tremendously high rainfall and a natural run-off that provides enormous potential for the production of hydro-electric power. But the exploitation of these resources in turn poses a serious problem - one that has faced the people of Tasmania for a long time. The drain of our loan moneys and other resources in the development of hydroelectric power has kept us short of money for other purposes. The position has now been reached at which we cannot sustain for very much longer this constant drain of our resources, and some other benevolent government - it looks as though it will have to be the Commonwealth government - must come to our rescue.

The honourable member for Wilmot has already said, and quite rightly, that despite acceleration of the work the Mersey-Forth scheme will still not be completed before 1972. This is perfectly correct. Already a great deal of money has been spent on investigation work in connection with the Gordon River scheme, its catchment and its potential for the production of hydroelectric power. I remind the House that we already have an authority which has operated to advantage in constructing the Snowy Mountains scheme for the benefit mainly of New South Wales and Victoria. If there is the slightest possibility that the work of that authority will be concluded in the not too distant future I would respectfully suggest that consideration be given to using this very fine work force on other projects. I believe the Labor Party has advocated this for some time. Members of the Labor Party have frequently suggested that the authority should be retained as an entity, and I suggest that its efforts might be diverted to Tasmania to carry out necessary work there, either by itself or in partnership with the Hydro-Electric Commission of Tasmania. I have in mind particularly the development of hydroelectric power from the Gordon River.

It is important that this be done ‘because since I have been in this Parliament I have heard it contended many times - and I sometimes imagined I was again on Opposition benches - that it is improper for us to use overseas capital for our internal development. Tasmania has had to resort to overseas capital. Such names as Alcoa of Australia Pty Ltd and Bechtel Pacific Corporation Ltd spring readily to mind because those undertakings are both entrenched in Tasmania. There we see overseas capital attracted not by the Commonwealth Government but by a State government. Within a matter of a few miles of the area that we have been speaking about an enormous developmental project has been carried out for the exploitation of our mineral resources. Our small State is fortunate in possessing extensive mineral resources. Within a comparatively few miles of the area we have been discussing is the Savage River project, from which most of our iron ore is at present being sold to Japanese interests. I opposed this proposal when it went through the State Parliament in Tasmania.

Mr Peters:

– Is the honourable member still opposed to it?

Mr PEARSALL:
FRANKLIN, TASMANIA · LP

– Yes, without a doubt. And I have no apology to make to the honourable member for Scullin or anyone else on that score. I am still opposed to it. I believe that too much raw material is going out of Tasmania and too little is being processed before it is exported. There is a copper mining industry in the same area as the Savage River. There is a hole in the ground from which our resources are being drained away. The industry is owned overseas. I listened with interest to the honourable member for Scullin when he spoke about foreign investment in Australia and I hope that he will pay me the courtesy of listening to me now, particularly as I am echoing his sentiments. As I have said, there is a big hole in the ground at

Queenstown. A lot of copper has been taken from it and there is a lot of copper left but we still import copper to reticulate the power we produce. We also have vast resources of iron ore.

Mr SPEAKER:

– Order! I suggest again to the honourable member that he come back to the Bill before the House.

Mr PEARSALL:

– I shall not pursue the matter 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 tobe moved forthwith.

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

page 794

CUSTOMS TARIFF BILL 1967

Second Reading

Debate resumed from 1 March (vide page 259), on motion by Mr Howson:

That the Bill be now read a second time.

Dr J. F. CAIRNS (Yarra) [8.33)- The Bill before the House is a very important one indeed in many respects. In the course of this debate the Opposition wants to stress something that has become very obvious throughout Australia recently and that is that there is something seriously wrong with the making of our tariffs. The Opposition believes that what is wrong lies in the relations between the Tariff Board and the Government and in the actual operations of the Tariff Board itself. It is in part a conflict in policy, in method and in attitude between the Department of Trade and Industry on the one hand and the Department of the Treasury on the other.

There is, within the Tariff Board itself, so serious a conflict that one is justified in feeling it is quite impossible for the Board to do its work as long as this conflict exists. But of at least equal and probably much more significance is the conflict between the Department of Trade and Industry and the Treasury. Those two mammoths in the Australian Commonwealth departmental structure are locked in conflict about policy and the Tariff Board, a relatively small body of men, is quite incapable of holding its own with such powerful forces. This situation has become apparent for all to see. We in the Opposition do not intend to find fault with details of this Bill but we propose to express our concern at the serious situation I have just outlined and we shall do this in a motion which I will move later.

As I have said, the Customs Tariff Bill 1967 is an important Bill. It covers specifically a number of commodities including coffee, industrial chemicals and synthetic resins, vanillin and ethyl vanillin, candles, clothes pegs, footwear, glassware, hollow bars, tubes and pipes of iron or steel, motor vehicles, butyl alcohols and butyl acetates, ethylene oxide derivatives, PVC products, metal working sawing machines and coated fabrics. The Opposition has no objection whatever to the way some of these items are treated in the Bill but there are significant objections to some aspects of the Tariff Board’s position and the Government’s attitude towards the Board.

This Bill provides for some high tariffs. Rates as high as from 25% to 40% are common in the Bill. Rates of between 50% and 60% are frequent and some rates are well in excess of 60%. Much concern has been expressed recently about tariff policy. It is fair to say that not for many years in Australia has there been so much concern about tariff policy as is being expressed today. As recently as January of this year a former Chairman of the Tariff Board, Sir Leslie Melville, a man of great theoretical knowledge and of considerable experience, particularly in the tariff field, delivered a lecture at the Conference of the Australian and New Zealand Association for the Advancement of Science. I shall direct the attention of the House to some of the statements made in that lecture, Sir Leslie Melville said:

However our tariff policy is diverting our scarce resources of capital into high cost industries, some of which make little contribution to the national income.

A little later in his lecture Sir Leslie Melville compared rates of growth in different countries. He said:

These figures are all very uncertain. The broad picture however is clear enough that standards of living are increasing more rapidly in most countries of Europe than they are in Australia and particularly in those countries from which many of Australia’s immigrants have come.

If Sir Leslie is right about this - and I think he is - it is a serious situation. If the standard of living in countries from which migrants come to Australia is rising to a higher level than it is in Australia this will not only lower our comparative position but also endanger the immigration programme as a whole. A little later in his lecture Sir Leslie Melville said:

What is needed is a more moderate approach to protection than we now have. Instead of providing more and more protection to virtually whatever industries seek assistance we should deliberately select for assistance only the less costly ventures.

So Sir Leslie Melville, with his theoretical knowledge and his background of experience as Chairman of the Tariff Board, believes that we are providing more and more protection to virtually whatever industries seek assistance. He wants to see assistance given only to the less costly ventures and in proposing this so clearly he must recognise that at the moment the Tariff Board does not have the means to select such ventures for assistance. Sir Leslie Melville also said something that I think we can all agree with particularly when we see the reaction of the Minister for Trade and Industry (Mr McEwen), himself a man of long and immense experience in this field, who, when questioned about this matter during the week, reacted dogmatically with signs of anger and obviously with a mind that is not open to consider that there is any possibility that there may be a need for improvement and change in Australia’s present tariff making policy. Sir Leslie Melville said:

The prospect that any of these guide lines will be followed does not at present seem good.

I think that was apparent when the right honourable Minister for Trade and Industry answered the question addressed to him during the week. Not only did Sir Leslie Melville express concern about this, but some time ago, with a great flourish of trumpets, the Government, when Sir Robert Menzies was Prime Minister, appointed an important and distinguished high level committee, the Vernon Committee, to inquire into economic conditions in this country. Among other things, the Vernon Committee said:

We appreciate the fact that Australia is committed to such a policy (a tariff policy) and we have found that on the whole the policy has been advantageous.

I think nobody on this side of the House would disagree with that. We agree that on the whole the policy of tariff protection in Australia has been advantageous. It had the function of developing secondary industry in Australia in the 1920s and 1930s particularly, and again after World War II. Indeed, without it we would not have had anything like the secondary industrial structure that we have, and without it we could never have accommodated anything like the population that we have today. Everyone will agree with this proposition from the Vernon Committee. The Committee went on to say:

But we have found strong reasons for regarding the present extent and possible future growth of protection with the gravest concern.

This top level committee that the Government appointed and whose report the Government brushed aside after having appointed it, had these strong reasons for viewing the matter with the gravest concern. Whether there are faults in the voluminous report of the Committee or not is quite immaterial. The facts are that the report was asked for, it was submitted and now the Government has shown no sign at any time of being willing to learn anything from the work of that Committee. I repeat, the Committee stated:

But we have found strong reasons for regarding the present extent and possible future growth of protection with the gravest concern.

Then, when one turns to the annual report of the Tariff Board itself for the year 1965-66, which was printed on 30th August 1966, one finds that the Tariff Board is divided almost equally into two. For most purposes, there are four members on one side and three on the other. There are, it would seem, irreconcilable differences between the four on one side and the three on the other. These irreconcilable differences, if that is what they are - they certainly are serious differences - have to be reconciled in some way by Ministers who sit opposite. One has only to refer to the minority report of Messrs Boyer, Cossar and Tucker, which is published on page 14, to realise that there is something wrong in the state of tariff making in Australia. In paragraph 79, these three members of the Board say:

We agree with our colleagues on the need for a clear statement of the concepts and criteria used by the Board. But in our opinion certain aspects of this chapter-

That is the chapter of the four who are in the majority and who follow fairly meekly the lines laid down by the Department of Trade and Industry: display an inadequate appreciation of the economic issues involved and hence it does not propose an adequate programme for dealing with them.

In paragraph 80, Messrs Boyer, Cossar and Tucker go on to say:

As has been stated, a crucial problem in formulating tariff policy is to give precise meaning to the term ‘economic’. The meaning of this term as used by the Board is vague, partly because of a tendency to apply it mainly to the internal economic relations of an industry such as over capacity and market fragmentation.

I think the three who are in the minority at the present time on the Tariff Board are saying that the majority view of the Board is such that the four who make the majority are not capable of discovering whether an industry is economic or not. The minority three then go on to say in paragraph 81:

The uncertainty of the meaning of the term economic’ has restricted its effectiveness as a basis of discrimination in tariff making. As a result protection has been afforded to virtually all applicants whose production has been of significance in terms of employment and investment. lt would seem that all you have to do, apart from one other thing that I shall mention in a little while, when you make application to the Tariff Board today is prove that you are in business already, that there is some employment in your industry and that there is some investment in your industry and, if you can do that, you have then only to state your own terms. Take as an example the recent report relating to 10 hp engines. There they came in and said: ‘We want 65%’. The Government said: ‘We know that all seven members of the Tariff Board say you are not entitled to 65%, but here is 65%’. Is that the state of affairs we have reached?

Have we reached the point where all that is necessary for an industry or its representatives to do is to attend a formal hearing? Has it now reached the stage of a pure formality? Apparently what happens is laid down by the Department -.of Trade and Industry when it gets away from the influence of the Treasury. Apparently all you have to do is prove that you have some employment and some investment in the industry and then, presumably, just ask for your own rate of tariff, and it is granted. As I say, it was 65% for these engines although all members of the Board had recommended something quite different. I have said that it looks as though all you have to prove is that you are in business and it is the business of the Government to keep You in business.

But there is another point that I think the House and the country in particular should take into account. I refer to a leading article published in the ‘Australian Financial Review’ of Monday, 13 th March 1967, in which this statement appeared:

The fundamental issue raised by the Government’s rejection last Thursday of the Tariff Board’s report on man-made fibres and tyre cord is the future independence and integrity of the Tariff Board.

The article goes on:

The Government’s rejection of the report represented blatant political pressure on the board to write guaranteed prices into the protection it recommends for the benefit of old industrial friends of the Government, regardless of the economics of such a course of action.

Dr J F Cairns:
YARRA, VICTORIA · ALP

– I am merely pointing out the weakness of the present situation by quoting a case which illustrates the weakness very clearly. The ‘Financial Review’ has suggested that this general condition of acceding to requests from industry for higher tariff is not only explained by the Government’s desire to keep employment and investment in industry but may well be explained because of a response to the old industrial friends of the Government. If this is so, then a serious situation is revealed.

Mr McEwen:

– I do not want to interrupt the honourable member - please understand that - but when did seven members of the Board recommend something and the Government take no notice of them?

Dr J F Cairns:
YARRA, VICTORIA · ALP

– I did not hear the honourable gentleman’s question.

Mr McEwen:

– You say that seven members of the Board recommended something on man-made fibres and you say the Government took no notice of them. That is not exactly right.

Dr J F Cairns:
YARRA, VICTORIA · ALP

– Seven members of the Board recommended lower tariffs than the Government was prepared to agree to.

This was announced by the Minister for Air (Mr Howson) yesterday.

Mr McEwen:

– You are in error. I wanted to identify the case.

Dr J F Cairns:
YARRA, VICTORIA · ALP

– Does the Minister say I am in error now or that I was before?

Mr McEwen:

– I say you are in error now.

Dr J F Cairns:
YARRA, VICTORIA · ALP

– The Minister will have an opportunity to correct me. I suggest that a serious situation may be revealed. It may be just as serious as it appears to be - just as serious as the Financial Review’ says it is - and that is, in a nutshell, that there are directors of several companies that have recently been given very high tariff protection who are associated with Country Party projects, like McEwen House in Canberra, and the raising of money for those projects. The time may have come when companies seeking tariff protection may be required to reveal their contributions to the funds of political parties.

What does the Government Say about all this? First of all I think there is an unsatisfactory situation prevailing in the House at the moment. This is partly rectified this evening by the presence of the Minister for Trade and Industry (Mr McEwen) himself. However the Minister for Air (Mr Howson) is responsible for tariff legislation in this House. I am not going to express any disrespect whatever for the Minister for Air. In his own Department and in matters that he has studied and about which he knows something the Minister for Air has shown competence in this House, but he has not shown any competence in respect of tariff matters. I submit that he reads prepared speeches as one would expect when he is handling matters that are no part of his own departmental responsibilities. I suggest that he answers questions in a like fashion, and about this very important matter he displays very little independent capacity to meet the requirements of the House.

The Minister for Trade and Industry is experienced and knowledgeable. I suppose that no-one in this House has the extent of his experience or knowledge of matters of tariff making or the practical relations between the Board and the Government. The Minister has shown in recent times that he either misunderstands what is involved or that he is not prepared to consider with an open mind that there is any possibility that there should be an improvement in tariff making. I asked him a question on 21st February, the first day that this Parliament sat. I quoted to him some of the statements that Sir Leslie Melville had made in a lecture more than a month previously.

The first thing that struck me and surprised me about the Minister for Trade and Industry was that he said he had not read Sir Leslie Melville’s lecture at all. I should have thought that a man who was so concerned about tariff making in Australia would have taken advantage of a month of the recess to read a lecture by a former Chairman of the Tariff Board, a Professor of Economics and a man whose remarks could hardly afford to be ignored, but the right honourable gentleman had not even read the lecture. I asked him to comment on what Sir Leslie Melville had said and the Minister replied:

I have not read Sir Leslie Melville’s lecture. lt has been the consistent policy of this Government not to engage in the planning of industry.

Neither Sir Leslie Melville nor I had said anything that indicated that the planning of industry was remotely relevant to the question I had asked the Minister. The Minister somehow thought that once it was suggested that there should be some concern with the economics or efficiency of Australian industry, this involved being concerned with the planning of industry. So he sought to misunderstand the whole question by saying that the Government would not engage in the planning of industry. Is that what the Minister intended to convey to us? Is that how he understood Sir Leslie Melville’s lecture?

On 14th March, a couple of days ago, the Minister was questioned by a number of members of the Opposition. He was asked by the honourable member for Darebin (Mr Courtnay) whether the Government was concerned to give more protection to foreign companies in Australia than to Australian companies. The Minister is notable in this House for being one gentleman opposite who has criticised some aspects of foreign investment in Australia. He has said, in his own colourful words, that we are selling a bit of the farm every year. The Minister, who has reached upper flights of oratory when talking about foreign investment in Australia but who has done nothing of a practical nature to carry those flights of oratory into effect, when questioned whether he - the man who took a position more than any other member on the Government side in respect of foreign investment - favoured foreign investment over Australian investment, said, and it was his punch line:

It appears to me that inherent in everything that the honourable member has said is a preference on his part for jobs to be created in some foreign country rather than in Australia.

It is all right for the Minister to supervise a process which is bringing 60%, 80% or 90% of foreign control of capital into Australia, but it is a terrible thing, his answer seems to suggest, that people might be employed in some ‘foreign country rather than here. But that is how he saw it. The honourable member for Darebin made no suggestion that he preferred to see men employed in some other country rather than here. The honourable member for Darebin, like everybody else on this side of the House, is primarily concerned to see people employed in this country, and his question suggested nothing to the contrary. The Minister for Trade and Industry appeared to misunderstand the question. Why was this? Is it that the Minister is incapable of answering the question specifically, or of understanding it? Has the Minister, after many years of great distinction in the administration of his portfolio, reached the stage when he interprets a question of this sort in this way? I want to make it quite clear about this business of employment and investment in Australia. I do not want anyone to misunderstand this and conduct a debate later on by knocking down straw men, as is the habit of some honourable members from the opposite side who participate in debate. If there is no way of employing men here rather than overseas or of preventing unemployment, then, as far as the Opposition is concerned, it is far better to protect an inefficient and uneconomic industry in this country than to allow men to be out of work here or to allow us to be short of investment. The Australian Labor Party in office or out of office, will support a course of policy which will protect inefficient and uneconomic industries in this country rather than have a shortage of employment. Let us have no misunderstanding about this. This is not the position today. The Minister knows that it is not the position today. It is for the Minister to show that his concern about foreign investment - about selling a bit of the farm every year - is consistent with protecting an industry which is falling 60%, 80% or 90% into foreign hands.

Recently I came across a wonderful article in the ‘Bulletin’. This is a rare occurrence. I think it is about seventy years since I saw an article as good as this in the Bulletin’. Of course, that will come as a surprise to people who have never done any historical research. The article stated:

Beyond questions of political expediency, it is also surely in our general interest that the exploitation of our natural resources should be a matter over which we ourselves have the main control. Otherwise, international companies can use Australian mineral development as part of their own international politics, stopping or starting in accord with their own interests instead of ours, or even perhaps fiddling prices to their own advantage.

I could well afford to ask - and I do not know whether the Minister would agree - that this article be incorporated in Hansard’, because it should be read by everybody. However, I will not do so. The last paragraph of the article states:

For the rest of this century, because of our geographic position, we face invigorating possibilities of developing a new kind of national consciousness, of becoming a new kind of people, more assured in our ways, more confident in our role. We are less likely to do this if we let some of the most significant decision-making in our country slip out of our hands.

Mr Uren:

– What was the date of that?

Dr J F Cairns:
YARRA, VICTORIA · ALP

– That was in the Bulletin’ of 4th March 1967. I recommend that article to everybody on the other side of the House, since all honourable members on the Government side seem to have lost a sense of national feeling and seem to be prepared to look to the United States for every thought, for every lead and for every responsibility, whether it be in defence or in any other field. The ‘Bulletin’ calls for a new kind of national consciousness, and the Australian Labor Party will not be behind anyone on the other side of the House in looking for a new kind of national consciousness. I am suggesting that the Ministers about whom I have been talking need a little of this national conscious ness. But it is for the Minister for Trade and Industry to prove that there is no better way to employ Australians than in industry which is not economic, which may never become economic and which may force up the cost of equipment such as engines of ten horsepower and less, fertiliser for use by farmers, or food and clothing for Australians all over the nation. Employment is not endangered by a less generous policy of tariff making. Consider the twenty-six firms in the chemical industry which employ between them 1,188 people. This is not an employment factor of any significance. This section of the industry should be considered on its merits in an economy at full employment. I should think it is costing more to protect these twenty-six firms than would allow their 1,188 workers to be paid $4,000 or $5,000 a year for doing nothing whatever. At any rate, it may be quite arguable that a number of these firms do have a legitimate place in the Australian economy. It may be quite arguable that a number of them are both efficient and economic.

I submit that the Tariff Board at present is not equipped to find out whether or not these firms are economic and efficient. I submit too that the Minister for Trade and Industry is taking a dogmatic and inflexible attitude to the situation and does not have at the moment a mind that is equipped to solve new problems. In these circumstances, what does the Government do? Firstly, it appoints to the Tariff Board men who, it knows, will give the decisions it wants. It stacks the Board. The Department of Trade and Industry has what have been called Trojan horses in the Tariff Board, and I understand that the Government is considering not renewing the membership of the Board beyond two terms of five years so that one or two of the awkward gentlemen on the Board will be got rid of in the next year or two. The second technique adopted by the Government is to send back reports to the Board until it gets the kind of report it wants. Since 1960 the Government has written policy into references to the Board so that the Board has to give the kind of decision the Government wants. I submit to the House that these methods endanger or destroy the independence, the character and the efficiency of the Board.

The Tariff Board is the battleground between the Treasury and the Department of Trade and Industry, and these giants behind the scenes are in conflict. The conflict comes out in what happens inside the Board. The present proposals about support values are no doubt a device by the Department of Trade and Industry to gain control of the situation which the Department lost when import controls were abolished. The use of support values in which the landed cost is taken and to which is added a tariff which can be up to 90% of the difference between the landed cost and the determined support value, so that as the landed cost falls the tariff increases, can be a very effective method for controlling industry, for controlling prices and for controlling profits. It can be a very important instrument and can be a very effective method for the indirect planning of industry, which the right honourable gentleman seems to be so concerned to have nothing to do with. I have no doubt that if this power were in the right hands the Minister would be quite happy to see this sort of planning of industry to achieve a particular purpose or purposes. But we want to know what the purpose or purposes are and how these things will fit into the economy.

If the Government is not prepared to accept the decision of the Tariff Board - very frequently it is not prepared to do so - it should accept the responsibility for making the decision itself. This is a legitimate method of operation. The Government - not the Tariff Board - must govern, and the Government should take the responsibility and make the decisions itself. I refer again to the article which appeared recently in the ‘Financial Review’. It stated:

In the case of penicillin, for example, the board concluded that the industry was not worthy of assistance, but the Government rejected the board’s report and reworded its terms of reference to explain that Government policy required the existence of a penicillin industry and asked the board to recommend protection accordingly.

A more significant case was the one the other day when the Board recommended for an industry certain tariffs which the Minister for Air, representing the Minister For Customs and Excise (Senator Anderson), introduced in this place on 14th March 1967.

Mr Howson:

– This is not part of the Bill we are discussing.

Dr J F Cairns:
YARRA, VICTORIA · ALP

– No, it is not part of the Bill, but it is an illustration of the way in which the Government will take responsibility if it wants to. The Minister said when introducing the tariffs:

It is undesirable that the matter be referred back to tile Board and possibly another two years go by without the industry being aware of the level of tariff protection under which it is to conduct its operations.

The Minister went on to say that this left the Government no alternative but to fix the rates of duty itself. But as I pointed out a little while ago, the rate of duty fixed in this case was the rate that had been asked for by the industry, or near enough to it. This leaves the Board in a very unsatisfactory condition. The Board is divided with three members on one side and four on the other. Also, there is the unsatisfactory nature of the relations between the Board and the Government. Honourable members may ask why that should be the position of the Board today. I submit that the Board is now of greater importance to the economy than it has been at any time in its history. More than ever we need a body which can discover the most economic and efficient parts of the economy and recommend accordingly. Until about 1950 the Board could afford to be vague, unselective and general in its methods and recommendations because Australia in those days needed employment and output more than it needed efficient and economic industries. But today we need both; we need full employment but we need also efficient and economic industries. The Board needs to be equipped to find out what is economic and efficient. I submit that it is not equipped for that purpose today. One has only to look at the most recent report of the Board in which, in paragraphs 70 and 76 on page 13, the majority of four states its position. All we find here is some kind of hope that in the future the Board will be able to determine what are economic and efficient industries.

Paragraph 70 of the report is in these terms:

The review of a wide range of major industries should enable the Board to indicate more clearly those protected industries or sections of industries which are relatively more economic and efficient than the general run of import competing industries and which might therefore be encouraged to develop rapidly.

A review of a wide range of industries in the future may or may not do this. As the minority on the Tariff Board indicates, this is indefinite, vague and hopeful, and about two years from now we may or may not be able to see our way clearly. If one examines the two reports that figure most significantly in the measure before the House tonight - the report of the Board in respect of industrial chemicals and synthetic resins, and the report on motor vehicles - one will see that the Board has not come to grips with the industry concerned. The Board has made a case that large scale industry in this field can produce the lowest cost of production, but it finds that in Australia large scale industry has not in fact necessarily produced this result. The following appears at page 16 of the Board’s report on industrial chemicals and synthetic resins:

An examination of the profits and earning rates of individual companies since 1960 showed that in most years all the six major companies in the industry have obtained profits which the Board considers to be an inadequate return on funds.

As I have said, although the Board makes a case that large scale industry should produce the lowest cost of production, it finds in Australia that in some cases large scale industry has in fact been associated with losses. It does not tell us much about how this situation has arisen. It suggests that the industry is dependent on the petrochemical complexes in this country. The report continues:

Major companies which concentrated their production on petrochemical products largely accounted for the losses incurred in the chemical industry in recent years.

It is most significant to note that those concerns which concentrated their production on petrochemical products have shown the highest losses. But the report gives no reason why this should be so. Is the petrochemical industry in this country obsolete? If it is obsolete, will it remain in existence? If it does, for how long will it remain in existence? Are we waiting for natural gas to save it? What are the prospects for its development? The Board’s report is disappointing in that it seems to have avoided such fundamental issues. It leaves us in doubt whether the chemical industry can be considered as economic and efficient, but more importantly it leaves us in doubt as to whether the Board is capable of discovering that.

The same situation is apparent in the motor car industry. One very large firm is producing motor cars at a profit which can fairly be said to have been last year at the rate of 66% on capital invested. The profit in the previous year was about 46%. These are very high rates of profit. There are other firms in the industry in which the situation is not as satisfactory but in all cases the tariff seems to be designed to meet the average or the higher cost requirements of the industry leaving the more profitable firms, such as the one I have mentioned, in a position to make what I regard as abnormal, exploitative and unreasonable profits. Therefore, on behalf of the Opposition I move:

Our proposed amendment indicates that at present the Tariff Board is not able to discover what are economic and efficient industries. Whilst recognising the difficulty and complexity of this problem we want the matter to be taken seriously. We want the Government not only to rectify the extraordinarily conflicting division of opinion which exists on the Tariff Board but also to ensure that the Board is equipped to recommend protection for the most economic and efficient industries.

The Opposition is not claiming that these are the only industries which should be protected. We axe quite satisfied that for reasons of defence and regional development or to provide work in ceratin areas it may be necessary to protect industries which will not meet the requirement of being economic and efficient, but we want the Tariff Board to be able to report without fear or favour which in fact are economic and efficient industries. We submit that the Board today is not able to do that. Our proposed amendment goes further and claims that there are other factors concerning the influences on the Board which the Government must consider. Those factors were considered in the report I have just mentioned. The Tariff Board said that it granted the 65% protection on the 10 horsepower engines provided the manufacturers did not increase their prices. The Opposition believes that this is a desirable development. We do not want to see protection continuously handed out to industry unless industry accepts the responsibility for fixing reasonable and proper prices.

I submit that our proposed amendment warrants the serious consideration of the Minister and the Government. I hope the Minister will take it seriously and provide the House with an adequate explanation of how he thinks the problems of the Tariff Board in this respect can be solved.

Mr DEPUTY SPEAKER (Mr Failes)Order! Is the amendment seconded?

Mr Crean:

– I second the amendment and reserve my right to speak later.

Mr McEWEN:
Minister for Trade and Industry · Murray · CP

– The Government opposes the amendment moved by the honourable member for Yarra (Dr J. F. Cairns). I will devote the principal part of my speech to the Government’s tariff policy and tariff making procedures, but before doing that I want to make a couple of observations. The honourable member for Yarra said that the Tariff Board stipulated, in respect of the small engines, that the recommended tariff should be contingent upon the manufacturers not raising their prices. That is true, but it is a consequence of the manufacturers declaring at the Tariff Board hearing that they would not increase their prices if accorded tariff protection. The finding of the Board is really no more than a recording of what the manufacturers themselves had declared in their evidence. The honourable member for Yarra in a speech which has complexities made an error or two of fact. I do not complain about that. I merely want to say that he referred to the Government taking a decision against the advice of all seven members of the Board. The law stipulates that for the purpose of a hearing a Board shall not be composed of more than four members. I think the honourable member is thinking of the annual report of the Tariff Board which I believe was signed by seven members. But actual recommendations in relation to an item are made by not more than four members of the Board.

In the man made fibres case the recommendation was not a tariff of 65%, which I think the honourable member said by a slip of the tongue; it was a 20% tariff plus a bounty at the rate of 8c per lb in the first year, 6c per lb in the second year and 4c per lb in the third year. These are not serious errors. I just want to take the opportunity to put the record straight. The honourable member for Yarra referred to what he described as the efforts of the Government, of myself and of the Department of Trade and Industry to interfere with the independence of the Tariff Board. Of course, reams and reams to that effect are written by the scandal mongers. At the outset I want to say that there is no vestige of truth in that claim. In my eleven years of responsibility for the administration of the Tariff Board I have twice met its members - on their invitation. I have on two, three or four occasions written letters to the Chairman of the Tariff Board on a point of fact that could have been tabled by me or the Chairman or anyone else. They were in no sense instructions.

The Tariff Board has been accorded by the Government the ultimate in independence. I shall tabulate the instances where the Government has not accepted the recommendations of the Board. On those occasions it has been done openly in the Parliament. The Government has explained to the Parliament and has exposed itself, as I expose myself, to debate on the decisions it has taken. I am perfectly sure that if I or the Department of Trade and Industry were to attempt to apply pressure to the members of the Tariff Board they would very quickly resent it and would very quickly expose it. The constant writings alleging interference are simply scandalous scribbling without any substance at all.

The trend of recent questioning of me in the House, to which the honourable member for Yarra referred, I think is explained by the honourable member’s statement that recently there have been many complaints about tariff making, the tariff system, the Government’s attitude and the pressures of myself and the Department of Trade and Industry upon the Tariff Board. Such claims are without foundation. Reams have been scribbled on this theme. So there is a public interest. In a land where part of the community is financially interested in making profits from imports and another part of the community is financially interested in making profits from local manufacture against the competition of imports, of course there will always be an audience for higher tariffs and an audience for lower tariffs. Nothing that I can do or would wish to do would ever alter that position.

A flow of criticism of tariff making - allegations that tariffs are high - has produced a most extraordinary instance of political expediency on the part of the Labor Party. In all the history of the Labor Party it has boasted of its policy of protecting Australian industries. Because some articles have appeared in the Press attacking the Government, myself and the Department of Trade and Industry, the Labor Party has thrown its historic policy out through the window and has moved in to attack protective tariffs. This really is political expediency at its worst. I hope that it will turn out to be a passing incident. Nothing can subtract from the fact I stated when replying to a question in this chamber - that there is no group of people in Australia so interested in adequate tariff protection as the great bulk of the Australian work force who find their employment behind the shelter of adequate tariffs. If one political party in this House claims as its exclusive role the protection of the work force, then it is extraordinary that it should attack the main means by which the work force is assured of its employment. The amendment proposed by the Opposition states that the Government should ensure that tariffs are not used to protect inefficient industries but that they are given only to efficient industries. I am garbling a little, but I think that is the sense of it.

Dr J F Cairns:
YARRA, VICTORIA · ALP

– That is not right.

Mr McEWEN:

– I think if the honourable member reads his own amendment he will find that it is right. It seems to be implicit in the attitude now adopted by the Opposition that industries can be sorted by the Tariff Board or by the Government into those which are efficient, those which are not so efficient and those which are inefficient. It is implied that they can be sorted out with precision. It is implied that the Government has the ultimate responsibility; that we should not burden ourselves with industries which are at that point in time inefficient; that we should destroy the investment in them; and that we should destroy the employment they provide. The spokesman for the Labor Party on this issue says: ‘Here is an industry employing 1,000 people. That is not a great number. There are plenty of jobs. If the industry is not as efficient as we would like it to be, fold it up.’ Capital amounting to about S200m is invested in the chemical industry. That may be an understatement. But that means nothing to a socialist economist who says: ‘Fold it up. One thousand people will lose their jobs, but that is nothing. There are other jobs they can get.’ Is this the real thinking of the Labor Party? It is what is being said. I do not believe that it is what the Australian community wants.

On occasions a comparison of the costs of Austraiian industries with those of overseas industries will, on a technical assessment, show the Australian industries to be inefficient; but there may be some circumstances to explain that situation. Given time those industries may have an opportunity to become more efficient. Are we to adopt a course by which at that moment in time and on such an assessment there is to be a ruthless withdrawal of the protective policy? The Tariff Board is independent. It is clearly composed of people who have strong views in opposite directions. An example of that is to be found in the case of the small engines industry. The two members who took one view and the two members who took the opposite view all strongly criticised that industry. One pair recommended that the industry should be given 75% protection to give it a chance to pull up ils socks. The other pair, who were more critical, recommended that it be given 55% protection. The Board was divided two and two. The Government inherited the task of Solomon. It put the sword in the middle and said: ‘We have a recommendation for 75% protection and a recommendation for 55% protection. We will take an average and give the industry 65% protection.’ I hope we do not have to make decisions like that very often. Does anyone criticise that decision? The industry was criticised, but no member of the Tariff Board proposed that the industry should be closed down. It remains for a spokesman of the Australian Labor Party to propose that, in such circumstances, the industry should be closed down. Here is an industry with more than $Sm invested in it, and employing more than 1,000 people. Are members of the Opposition really telling me that we should close down the industry because at this point of time we can import these engines more cheaply from America? That might be the policy of the Labor Party but, thank God, it is not the policy of this Government.

Mr Hayden:

– The policy of the Country Party?

Mr McEWEN:

– You face your responsibility and I will face mine. The Tariff Board makes its judgments on efficiency - on whether an industry is economic or not. It makes recommendations to the Government on whether an industry should be protected and on the method and degree of protection. In the vast majority of cases, the Government accepts the Tariff Board’s recommendations. It rejects them only when some special circumstance exists. In doing that, the Government makes plain its reasons and then exposes itself to debate on its decisions within the Parliament.

Let me remind honourable members of the principles on which the Tariff Board operates. These are principles which, in their present form, had their origin in the 1931 Ottawa Agreement. They were written there. They have been reviewed a score of times but, as principles, they have never been altered. There have been some slight modifications, to which I will refer later, but they have never been altered as principles, notwithstanding changes of governments from both sides of politics. These principles were spelt out in considerable detail in the Tariff Board’s annual report for 1958-59. The Tariff Board is bound to recommend protection only to those industries which it judges are reasonably assured of sound opportunities of success - industries which are efficient and economic - and at levels which it considers will not prevent reasonable competition from imports on the basis of economic and efficient production in the Australian economic environment. This is a policy of this Government. It is a policy of previous governments. It is an international commitment of this Government, in a treaty with the United Kingdom, that no tariff that we impose shall be higher than will enable reasonable competition from the same product from the United Kingdom. A tariff cannot be outrageous if we are bound by treaty not to have a tariff higher than will still permit competition in respect of that item from the United Kingdom.

I am sure honourable members will understand that the Tariff Board is entrusted with the difficult task of advising the Government in a way which will ensure protection being recommended for efficient and economic industries. How the Board carries out this task is its affair. It outlines the many factors that it encounters. Very often the Board makes it clear that it has been no easy task to arrive at the judgment that it has made. On rare occasions, it has found that an industry is uneconomic. In such cases, as in the case of the manufacture of small engines which is now before the House, it has criticised the industry and given its reasons for doing so. Then it has said that it proposes to recommend that the industry be sustained but that it be looked at again in a few years time in the hope that it will then have improved its production record and its competitive position with imports. In the annual report for 1958-59, in chapter 2, pages 8 to 11, the Tariff Board described how it conceived its task and explained how it operated. With the concurrence of honourable members, I shall incorporate those extracts from the report in Hansard.

CHAPTER 2.- PRINCIPLES and PROCEDURES IN TARIFF MAKING

In the Australian economy industrial development has generally occurred in response to numerous individual judgments of the relative profitability or expected profitability of alternative forms of business activity. Development, even within any one industry, may therefore take place a step at a time as individual business interests spread the range of their activities or set out to manufacture new products.

For instance, the textile industry in Australia has developed as a result of individual manufacturers deciding to move progressively into particular areas of production which, under the circumstances existing at the time, held the promise of profitable operations.

The tariff structure parallels, to a large degree, this more or less haphazard growth in industry, and it is unavoidable that the Tariff, at any one point of time, should contain inconsistencies the removal of which necessitates constant consideration by the Board.

This process of development by diversification, within an industry as well as by the establishment of completely new industries, means that the Board must face the prospect of an increasing volume of references dealing with tariff revision. It must be expected, also, that these references will become increasingly complex because more and more frequently issues will seldom be confined to a single industry but will spread to other industries that supply materials or use the end product for further manufacture. For example, a variation in the protection afforded a basic material creates problems in related user industries and these consequential problems are of concern to the Board.

Moreover, in .the process of tariff making, individual rates existing in the Tariff at a particular time reflect the cost and competitive position of the industry at the time tariff assistance was granted. It is to be expected that the greater the range of goods protected by the Tariff, the greater will be the problem of ensuring that tariffs will be revised in accordance with variations in the protective needs of particular industries arising from changes in the relative cost position in Australia and overseas.

With the increasing tempo of industrial development and the prospect of development in the future, the time seems opportune for the Board to re-state the main factors it considers and the procedures it follows in reaching its recommendations. Such a statement, it is hoped, will be of assistance to the various interests giving evidence before the Board as well as reiterating to Parliament what the Board understands its charter to be.

Tariff making can never be an exact science. The range of subjects referred to the Board, the problems peculiar to individual industries, the difficulties of determining comparability of competitive goods, the strengths and weaknesses of members of the various industries, the nature and extent of competition from imports - these are some of the many factors involved in tariff making or tariff appraisal that make precise measurement impossible. Necessarily, therefore, in each of the subjects referred to it by the Minister there is a large element of judgment in the Board’s assessment of the degree of protection required by local industry.

The Board’s judgment is based on its analysis of the best available facts and its interpretation of these facts in the light of its accumulated experience. Obviously, however, the area of uncertainty will be reduced if witnesses understand the type of information required and provide it in the form best suited to the Board’s purposes.

Principles of Tariff Making

In its Annual Report for 1933, the Tariff Board set out certain general principles under which it had operated since its establishment and which, so far as they affect trade relationships with the United Kingdom, had found expression in the Ottawa Agreement in 1932 and have been substantially re-affirmed in the United KingdomAustralia Trade Agreement of 1957.

Briefly, the provisions of the latter Agreement state that -

  1. protection by tariffs shall be afforded only to those industries which are reasonably assured of sound opportunities for success;
  2. the tariff shall be based on the principle that protective duties shall not exceed such a level as will give United Kingdom producers full opportunity of reasonable competition on the basis of the relative costs of economic and efficient production; and
  3. special consideration may be given to industries not fully established or to industries essential for defence purposes.

In accordance with these principles the Tariff Board recommends assistance, when necessary, to industries on the basis of their being economic and efficient and showing sound prospects for success.

It is sometimes suggested that the Board should elaborate on these principles by listing in full the conditions that must be present before an industry will be classed as ‘economic and efficient’. It is doubtful, however, whether such an approach would be practicable even if there were clearer indications of government policy in many fields. The actual criteria vary in importance and usefulness in each case. The conditions that are relevant in one instance may be largely inappropriate in another. The Board has found that the only reasonable approach is to make on each occasion a separate judgment based on all the relevant criteria. However, it is essential that the various interests giving evidence before the Board should attempt to demonstrate, by factual argument, whether or not the industry concerned is ‘economic and efficient’.

In examining what constitutes economic operation, the Board considers broad questions such as the effects of protection on prices to consumers either directly, or indirectly through costs to user industries, whether the industry provides an outlet for economical exploitation of local resources, whether establishment of the industry concerned will assist in the development of other industries, the prospects for further growth of the local industry, the possibility of competing in export markets and so on. In addition, the Board considers particular aspects such as the extent of demand for the industry’s product, the proportion of the market that Australian manufacturers can supply and the acceptability of the local product to consumers - in quality, range, variety and availability.

No list of factors relating to the question of whether or not an industry should be regarded as economic could be exhaustive, but enough has been said to indicate that the Board expects an industry seeking protection to demonstrate that it is worth while and to indicate why it considers that the gains to the Australian economy from protecting the industry will offset the costs. Such arguments should be an important part of the case presented by industries requesting tariff assistance. Frequently, however, only limited evidence of a general character is given on these aspects and industries thereby fail to do justice to their claim that the industry and its production are economic. Similarly, witnesses opposed to protection sometimes do not make their opposition as effective as they could were they to direct their attention to the question of whether or not production is economic. The Board does not, as a result, receive as much assistance as it might in making its judgment on this question.

The evidence required to establish the efficiency of a local industry is of equal importance. Often a good deal of evidence is presented which is intended to show only the technical efficiency of an industry’s manufacturing processes. It is not enough, however, merely to seek to establish technical efficiency in manufacture. Efficiency, as the Board interprets the word, involves not only efficiency in the productive processes relating to the use of materials and labour, machinery and plant, but also efficiency in such things as management, selling, &c. It involves not only a study of efficiency in the context of existing conditions but also under the circumstances that would exist in the future were the industry to be accorded protection. The Board considers that any approach to the measurement of efficiency must be realistic. It does not attempt to impose an absolute measure. Rather, where it is appropriate, the Board looks at levels of efficiency as established by each member of the local industry relative to other members, relative to overseas producers and relative to other industries in Australia.

The members of the Board endeavour to acquaint themselves with the problems of industry. They are informed of the many difficulties that arise, they visit a great many factories in the course of the year, and they are always willing to have witnesses demonstrate the problems of the industry and their bearing on requests for tariff or other assistance.

In its comparisons of efficiency, the Board is interested not only in differences as measured by costs of production, but also in other measures such as output per man-hour, and the explanations that enable it to evaluate these measures. From the financial data various management ratios can be computed and compared, e.g., earnings rates and turnover to funds employed. None of these comparisons is infallible but, considered together, they are of assistance to the Board.

Although fully aware of the difficulties involved in deciding whether or not an industry is efficient, nevertheless, as part of its responsibility, the Board is bound to make the necessary judgment. Witnesses could greatly assist by providing as much data a* possible that will aid the Board in making ils judgment.

The United Kingdom-Australia Trade Agreement of 1957 also makes special mention of infant industries and of industries that may be important for defence. The Board realizes that some industries require higher tariffs or other forms oi assistance initially in order to meet competition from larger overseas manufacturers. This principle is firmly established in tariff policy.

Procedures in Assessing Tariff Assistance

Clearly, to measure the extent of a local industry’s disadvantage, the Board requires a good deal of factual information. It is fully aware that a duty to be effective should provide the right degree of protection. If the duty is too low it will only add to costs and will fail to protect. If it is too high it will unnecessarily restrict imports and, especially when there is no interna] competition, may lead to unhealthy development in local industry and foster unwarranted pricing.

In assessing assistance, however, the Board does not merely make a simple arithmetical calculation of cost and price disadvantage. There are many other things that hare to be taken into account. For example, the Board must consider the extent to which any cost disadvantage would be lessened or removed by an expansion of output, any disadvantage to the Australian industry resulting from prejudice for imported products and from affiliations with companies overseas, any natural advantages to local industry from its nearness to the market, the profit situation of the industries seeking assistance both in relation to each other and in relation to overseas manufacturers, the extent to which the landed cost of imports reflects the overseas cost of production and whether the existence of the local industries prevents excessive prices being charged on imports.

When particular types of an otherwise standard range of goods under reference are not made in Australia, under certain circumstances the Board either suggests admission of these types of goods under By-law or recommends admission under a substantive tariff item carrying nominal rates of duty.

The system by which the Board obtains ils information is generally well established and there is no point in elaborating on it in this report.

The scope of the Board’s inquiries and the recommendations resulting from them are restricted 10 the actual terms of the Minister’s reference. On occasions, it is suggested by interested parties that the Board should go outside its terms of reference and make recommendations on other matters considered to have an important bearing on the subject. Although it can be appreciated that such a course may at times appear desirable, the Board considers that the only action it can take is to bring the additional matters to Hie attention of the Minister.

The Tariff Board Act provides that in all tariff revision matters evidence must be taken publicly and on oath. Provision also exists in the Act tor the taking of confidential evidence and a good deal of the evidence on such matters as production costs is taken in confidence. Confidential evidence has obvious disadvantages arising from the fact that an opposition witness has no opportunity to comment on the information provided, and for this reason as much evidence as possible is heard in public.

Because the Board takes evidence in confidence, it is given a great deal of detailed information that might not otherwise be obtained. Nevertheless, although the information is detailed, it is not always in a form that allows comparison or analysis. Witnesses frequently appear to neglect the important factual aspects of evidence while overstressing relatively unimportant issues. It is felt that this aspect would be greatly improved if industries kept in mind the Board’s desire to make comparisons as part of its inquiry.

The Board is satisfied that this difficulty results from misunderstanding rather than from any desire to conceal information. In the course of the year the Board and its staff have approached many interested parties to ensure that the full and detailed information it requires is in fact supplied. It is indeed exceptional not to receive full co-operation from local industries when seeking information.

In an attempt to reduce the difficulties of obtaining comparable information, over Irc past year the Board has been exploring the use of questionnaires especially designed for the subject matter of a particular inquiry. In the course of preparing these questionnaires, and prior to the public inquiry, the Board, or its staff, has frequently consulted interested parties to ensure that the information requested is relevant, is reasonably available, and is suited to the Board’s purposes.

It has not been intended that the questionnaires should take the place of detailed argument. They have been designed only to obtain basic information and to assist witnesses in preparing this information. The Board is anxious that the witnesses should appreciate the necessity for submitting their cases in the form of a detailed statement. The questionnaires are complementary to, and do not take the place of, such statements. lt is realized that complete comparability can never be achieved even by the use of special methods for obtaining information. As mentioned previously in this report, there will always be a large element of judgment to be exercised in assessing tariff assistance. However, the Board wishes to eliminate, as far as possible, the bias and errors that creep into costings purely as a result of differences in costing methods, not only among Australian firms but also between Australian and overseas firms, lt will never be possible completely to escape arbitrary allocations of costs. For example, allocations are unavoidable when the goods under reference form only a small part of a firm’s output. Again, estimates are necessary if a firm’s accounts are not sufficiently departmentalized to permit analysis of costs of the goods under reference. The Board’s main concern in such cases is not so much that the basis of allocation may have arbitrary aspects but that it should be made in a form that will permit comparisons between firms within the industry.

Generally speaking, the information required is fairly readily available from the records of the members of the industries. The main problem is to ensure that all relevant details are obtained and that they are supplied in a comparable form.

However, following discussions with Sir Alexander Fitzgerald, an approach was made to The Australasian Institute of Cost Accountants. The Institute was asked to examine the Board’s various problems on costs and give whatever assistance it could.

The Institute co-operated by setting up panels of practising cost accountants in Melbourne and Sydney. Each of the panels set out the principles that could be followed in obtaining from manufacturers information on costs, prices and profits. Recent questionnaires sent out by the Board have drawn heavily on these principles.

From comments made on the questionnaires at some recent inquiries it is apparent that, at times, provision of the information required may have presented difficulties to some witnesses. It was claimed that the information required was too detailed and that firms concerned would be put to a great deal of trouble and expense to provide the details. Efforts are constantly directed to simplifying the questionnaires by ensuring that the questions asked arc only those the answers to wi;j;h will directly assist the Board in arriving at its conclusions on the industry under review. In fact, most of these difficulties have been readily resolved in the past after discussion with the Board’s staff. The Board’s staff is always available to discuss these difficulties with any intending witnesses who may bc in doubt concerning the information required. The Board itself would welcome constructive suggestions for improving this aspect of its work.

I thank the House for not asking me to read the extract. The report shows that the Tariff Board, as constituted at that time and clearly operating within the policies I have outlined, followed the course of gathering evidence and reaching conclusions on what constituted an economic operation and on the effects on consumers in other industries in terms of prices and costs; that it took into account the prospects of further growth and ability to compete in export markets; and that it made a judgment on the acceptability of the product, on the implications of the industry for the use of local resources, on whether gains to the economy would offset any adverse affects, and on whether the industry was efficient. Those are the principles, and I think honourable members would say that they are very proper principles.

The Tariff Board’s role as an independent advisory body is to work within these terms of reference and to have full regard to Government policies. Do not let us forget that this is not a Board which makes policy. It is a Board which makes recommendations to the Government. It would surely be impractical to invite the Board to advise the Government along lines that it knows are inconsistent with the Government’s objectives and policies. This Government has considered on occasions whether the terms of reference, which are standard and simple, should be changed, whether the criteria for the Tariff Board to work on should be spelt out, and whether the words economic and efficient’, for instance, should be defined. Over a period of years we have spent hours and hours in Cabinet considering whether these simple and historic words should be strengthened, subtracted from or added to. After mature consideration, the conclusion has always been that these things should stand as they have stood. They have not been altered except in a very modest respect that I will mention presently. As I have said before, on each occasion we have decided on no change. As the honourable member for Yarra (Dr J. F. Cairns) has said, it is for the Government to accept its responsibility, finally to make its own decisions and then present them to the Parliament. It is for the Tariff Board to operate, applying independent judgments within the framework of the Government’s declared policies.

Let me turn for a minute to individual references to the Tariff Board. In each case the Tariff Board fs asked to say, firstly, whether assistance should be given in the light of the principles I have just mentioned; secondly, what should be the method of assistance; and thirdly, what should be the degree of assistance. As an example, take the chemical industry. The Tariff Board was given an indication of the Government’s concern for stable tariffs and for stability within the industry. It is notorious that in the great complex of the modern chemical industries disruptive prices recur. We have enormous producers at Altona and at other places in Australia, but they are diminutive by comparison with some of the gigantic chemical concerns overseas. When a tap is turned on, the production flows in these gigantic concerns. If markets do not turn up, these companies do not turn off the tap. They allow production to go on and they pour their output into somebody else’s market in which they can sell it at any price. They do this on the principle that it is better to sell the product at a low price than not to sell it at all. We had had a long experience, as every country had, of disruptive pricing in the products of the giant chemical industries and we asked the Tariff Board to examine this situation. The Tariff Board has come up with the principle of support prices. The Tariff Board has said: ‘Here is the tariff that is necessary, but the duty-paid landed price ought not to be allowed to fall below a certain level. Here is the level below which it ought not be allowed to fall; otherwise investment and employment in this country will be wrecked. If it should fall below that level, then the Australian industry should be protected by a support price, not to the full extent of its need but to the extent of 90% of its need.’ There is a Government policy in that. I am quite proud to say that this industry has been given some measure of stability without the highest level of protection.

Copper production is another industry that I mention to illustrate my point. Here is an industry that has produced completely isolated communities at Mount Morgan and Mount Lyell. Copper prices can fall to disastrously low levels and when this happens the industry itself and employment in it are absolutely threatened. The Tariff Board has been asked to examine this matter and to make recommendations, bearing in mind the fact that this industry is carried on in some completely isolated areas where there are no other avenues of employment. Here is a reference to the Tariff Board that carries with it an instruction. Does anyone in this House quarrel with that? Do any honourable members say that if world copper prices fall the town of Mount Lyell should be allowed to die and the mine at Mount Lyell should be allowed to water up, never to be re-opened again?

These are the things for which the Government has accepted responsibility. We feel no shame in doing it. I take the opportunity to explain this matter to the House. I hope that as a result of this explanation the Opposition side as well as my own side of the House will accept the reasonableness and correctness of this policy. The performance of the Tariff Board has constantly illustrated that the Board applies a properly critical attitude to requests for protection. I said that I would give the House some statistics. They will be brief but they are enormously interesting. Since July 1958, 361 Tariff Board reports have been tabled in this House. Of those reports, 198 contained recommendations to increase tariffs. Ninety-one reports contained recommendations that there should be no increase in the tariff. Seventy-two reports from the Tariff Board recommended a reduction of tariff. These figures prove that not every Tariff Board inquiry leads to an increase in tariffs. Not by any means is this so.

Of the 361 reports to which I have referred the Government adopted 330 without any change. In respect of 19 reports the Government departed from some of the recommendations of the Tariff Board and in 5 cases the Government for various reasons referred the matters concerned back to the Tariff Board for further investigation. In respect of only 7 reports out of 361 did the Government not adopt the recommendations of the Tariff Board. These figures show the very great respect that the Government has for the work, the findings and the recommendations of the Tariff Board. I put that argument against the proposition that we should arbitrarily and ruthlessly decide that because on occasion an industry is not efficient we should tear it down, destroy the investment and destroy the employment.

Mr Cross:

– That is not our policy.

Mr McEWEN:
CP

– No. The honourable member for Yarra got the Opposition off the hook tonight. I respect his skill in doing so. But that was the policy inherent in a question that was asked in this House. Occasionally in special circumstances the Government requests the Tariff Board to conduct an investigation having regard to the assessment by the Government of a certain requirement. There is nothing secret about this request. It is written publicly into the Tariff Board’s reference. Let us take as an example locally produced crude oil. Here the Tariff Board was given an indication of the Government’s special interest in finding a way of encouraging the use of the valuable product of an industry that has peculiar problems. We realised that when oil was found in this country it would probably be found by some great overseas organisation that had control of plenty of oil in other countries. The view of the Government as expressed to the Tariff Board was, in essence: ‘Our oil has to be sold. Tell us how best to ensure that it is sold at a fair price.’ Will any Australian complain about this desire? We wanted to see the oil sold on terms that would show a fair prospect of profit because we wanted the search for oil to succeed and the production of oil to prosper. Here is a practical explanation of how we go about tariff making and the extent to which the Government has conformed to the findings of the Tariff Board.

The policy of the Government is to ensure that actions are not taken arbitrarily but only after an independent investigation of the facts and in the light of the clear policy of assisting efficient and economic industries, except in exceptional circumstances such as I have mentioned.

Our policy is to indicate clearly in the published reference what we have put to the Tariff Board, and also to indicate clearly to the Parliament what we have done about the Board’s findings. They are tabled in this House together with a statement saying whether they have been adopted, rejected, altered or referred back to the Board. For the Government to do other than adopt a recommendation from the Tariff Board is rare. We have, in the overwhelming number of cases, accepted the advice of the Tariff Board which is a completely independent and untrammelled organisation. It has been provided with every officer that it has asked the Government to supply. There is no weakness in the Tariff Board arising from an unwillingness on the part of the Government to give the Board all the staff that it requires. The Government has actually proposed to the Tariff Board that it would be a good idea for its members to go overseas in turn and see industries operating in other countries so that they may view our own Australian industries against the knowledge gained from an inspection of similar undertakings elsewhere.

In conclusion, I hope that what I have said tonight will bring the House to a better understanding of the policy of the Government. The tariff board system is an advisory system. If it is imperfect, well, all life is a bit imperfect. But I am prepared to say that this system is better than that followed in some countries where politicians or bureaucrats meeting behind locked doors make decisions affecting the investment, employment and the standard of living of very many people. I am not unwilling to say that in the eleven years of my administration of the Tariff Board there has been a greater measure of growth in this country than there has ever been before. The Treasurer (Mr McMahon) has said that there has been a greater degree of economic stability during this period than ever before.

Dr PATTERSON:
Dawson

– I rise to support the amendment that has been moved by the honourable member for

Yarra (Dr J. F. Cairns) to the Customs Tariff Bill 1967. The Minister for Trade and Industry (Mr McEwen) has implied that the Australian Labor Party is throwing over its traditional policy of tariff protection. This of course is far from the truth. The amendment is quite clear. It states in part: . . the Government should take steps to ensure that the companies to which protection is given follow price, production, export and dividend policies »u are in the interests of economic and efficient development, as well as of full employment and a stable and rapid rate of investment.

It is becoming increasingly apparent that the Australian people are becoming more and more uneasy with the blanketing, ad hoc and often inconsistent methods being used by the Government in implementing its tariff policies. One must really wonder how the Minister for Trade and Industry (Mr McEwen) really sleeps with his conscience when on the one hand, as Leader of the Australian Country Party, he has definite and I believe rather biased obligations to primary producers in rural areas - and rightfully so - yet on the other hand he displays extraordinary latitude, great sympathy and great willingness to help giant monopolies and overseas firms to secure a greater and greater stranglehold on Australian industry. These are the industries which supply primary producers with their basic tools of trade and which under protectionist policies for some inefficient industries will only aggravate the high cost structure applying to primary industries.

It is indeed fortunate that the Minister for Primary Industry (Mr Adermann) has a gentlemanly and placid nature and has no intention of rocking the boat of the Minister for Trade and Industry. But one does not know for how long this state of affairs can continue. If the present ad hoc protectionist policy of the Government continues, rural areas will experience more and more difficulties with respect to the level of the cost of production and the level of employment on farms and in the rural areas. It is not good enough for the Minister for Trade and Industry to infer that because he is in charge of policy making with respect to the primary and secondary industries he is able to keep this fine, even balance in the economy. As far as we are concerned, some primary industries today are in fact bearing more than their share of the brunt of the over-protectionist policies for inefficient industries, particularly with respect to the giant combines controlled by policies formulated outside of Australia.

In addition to the undue burden being placed by some tariffs on specific sectors of the national economy, including both primary producers and the work force, indiscriminate high tariffs, either in the short or the long term, can lead to misallocation of the factors of production to the degree that the average real income of the nation can suffer. This is the main argument I am advancing in support of the amendment. To say that tariff protection provides full employment and gives the working man, the farmer and others an average real wage of a particular level is not necessarily meaningful. If greater thought were given to the economic soundness and the efficiency of factors of production of particuar industries, it is certain that these factors of production could be rearranged so that full employment would still prevail, but the real income of the nation and the worker can be significantly increased above its former level. Thus by refusing to be continuously committed to a high tariff for a particular commodity, the nation, including the workforce, in the end would be better off than was previously the case.

The whole question of tariffs is of course a complex one. The Minister for Trade and Industry touched on the subject of the Ottawa Agreement which is really the basis for the criteria followed by the investigation and decision making machinery of the Australian Tariff Board. In essence, the United Kingdom Trade Agreement of 1957 embodied the criteria laid down by articles 9 and 10 of the Ottawa Agreement whereby Australia should not impose tariffs which would stifle competition from United Kingdom manufacturers, after taking into account a comparison of the cost of production in the two countries and at the same time giving full consideration to the relative economies of the particular industry in question as well as the relative degree of efficiency of the factors of production being used. But large numbers of inconsistencies in the Tariff Board’s findings clearly underline the contention that such guide lines or fixed principles of tariff making are not always adopted by the

Tariff Board. But this does not necessarily mean that fixed criteria are essential. Flexible decision making machinery may be far more advantageous to the Australian economy if it is to achieve its goal of full employment consistent with a steady rate of increase in savings or investment.

We are concerned about this ad hoc application of principles apparently being adopted by the Government and by some members of the Tariff Board when making important tariff decisions. It would seem that some of these decisions are influenced by personal direction from the Minister for Trade and Industry or the Department of Trade and Industry, or by the personal desires of individual members of the Tariff Board, or by pressures actually exerted on the Tariff Board through the various channels available to large monopolies and oligopolies. I have no argument with the belief that Government policy has the right to determine the final decision relating to any protectionist policy. But let us al least secure from the Tariff Board a fair and just judgment based on reasonably inflexible guide lines relating to economic enterprises and the efficient use of factors of production, with the economic welfare of the nation being one of the most important of the criteria. The decisions of the Tariff Board suggest that the Board tries to follow some internal logical consistency, but the ad hoc and exogenous pressures exerted on it seem to eat away the solid foundations of criteria making machinery upon which tariff decisions should certainly be formulated.

As the amendment moved by the honourable member for Yarra (Dr J. F. Cairns) suggests, the great difficulty which appears to be experienced by the Tariff Board is one of interpretation and application of economy and efficiency as applied to particular enterprises. These criteria have taken their roots in Article 10 of the Ottawa Agreement. The three broad criteria are that the firm must be established, in the first place, because this is the only way in which quantitative measurements can be made of any of the problems involved; secondly the firm must be efficient in the use of its factors of production, including the purchase of raw materials; and thirdly the firm must be relatively economic not only with respect to Australian competition but also with respect to particular conditions operating in the overseas manufacture of the commodities in question.

Each of the three broad principles demands a full scale debate in its own right. All are important. It is obvious that the definition and interpretation of ‘economic’ is the most important and vexed question of all. The Government’s failure to allow realistic anticipatory tariffs to infant industries within the framework of the present lack of incentives relating to the establishment of new industries has played completely into the hands of monopolies and oligopolies wishing further to extend their subsidiaries. It provides an excellent climate for foreign capital invasion of this country. In other words, to establish a new industry in Australia under the high cost structure that operates today is a most difficult and hazardous undertaking. If the Government were to provide the climate by such measures as pioneer taxation concessions or additional income tax concessions, or incentives based on long term credit and low interest rates, these in themselves would materially assist Australian industry, but the absence of these incentives to commence business, coupled with the refusal of the Government to give full weight to anticipating tariffs, provides the green light to foreign investment to take control of key industries and at the same time allows monopolies effectively to stifle any competitive industries which may look like being established.

Nobody can be really impressed by the statement of the Minister for Trade and Industry (Mr McEwen) in which he claimed that the Australian workman owes his livelihood to foreign investment. This type of argument was employed 300 years ago - in the colonial days. If the Government wants proof of the value to a nation of a soundly planned and constructive policy of assisting industries to become established, Japan is the classical model. The manufacture of capital goods and the ownership of Japanese resources by the Japanese people, coupled with judicious government planning of public expenditure which gives first priority to capital goods, underlie the whole economic structure of Japan’s remarkable economic growth.

The Tariff Board’s interpretation of efficiency as it relates to the efficient use of factors of production is extremely vague.

In general, however, it is important because efficiency in the use of factors from both management and technical criteria is vital to the final decision relating to the actual height of the tariff. In general the degree of protection given to the individual firm should be directly dependent on its economic relationships with those firms using their resources efficiently. Thus it follows that the rate of protection for a particular finn should be equal to the tariff required to keep an efficient firm in operation, unless there are other reasons - qualitative reasons, for example, such as defence - for keeping highly inefficient firms in operation. This means - this is important - that tariffs should not necessarily be refused to inefficient firms - far from it - but more thought must be given to the efficient use of factors of production. Otherwise, it means that in the long run a particular firm could not survive even with the help of a normal tariff.

With respect to the important economic criterion - the one which is the most difficult to interpret - it is here that the vaguest of concepts seem to be manifest. It is here that we seem to have clashes between members of the Tariff Board and even between the Board and the Government. It is obvious that Australia can produce any commodity at a price. In practice we could grow in hot houses produce which we import from, the tropics. At the same time we could argue that these resources were being used internally efficiently, but the degree of protection required would be so astronomical that it would lead to the misallocation of the factors of production and a definite waste of the nation’s limited resources. It is between this extreme and sound business that the argument here exists.

There must be an upper tariff level. We recognise that; all developed countries recognise it. This same concept underlies the very essence of the present Kennedy Round talks. Serious cost difficulties between Australia and other exporting countries may be traced to two particular reasons. The first is the important labour cost structure position and the level of man hour wages paid to Australians compared with man hour wages paid overseas. The second relates to economies of scale - a point mentioned frequently in Tariff Board reports and stated often in explanations underlying the protection of commodities, including this field of chemicals, lt is clear that throughput is most important, particularly in the motor vehicle and chemicals industries, where competition could be particularly severe.

It is obvious that some general yardstick or ceiling for tariffs must operate. Over the years there does seem to have existed in Tariff Board decisions a ceiling which appears to gravitate to in the vicinity of 30% British preferential tariff and 60% most favoured nation tariff. In the chemicals industry decided complexities occur because of the large numbers of components entering into particular formulae and because many elements are capable of effective substitution from a physical efficiency viewpoint. The degree of substitution and the materials used depend on the prices of the factors of production used singly and in combination with each other. The wide range of elements used in the manufacture of chemicals means that once a parent company is protected it automatically follows that its subsidiaries or the independent firms supplying its raw materials have also to be protected. It follows that the greater the complexity of the raw materials with respect to volume and the number of suppliers being used in the manufacture of a commodity, the greater the headache for the Tariff Board. Although a 90% protective tariff under normal conditions may be thought to be high, it may not necessarily be high when the chain of processes is kept in mind. There may be a weak link, but it may be necessary to put an extraordinarily high tariff on that weak link in order to keep the complete chain of processes in operation. Of course, economies of scale are most important and in fact, as I have said before, underlie much of the argument for this Bill.

The Labor Party believes that protectionism is fundamental to growth and full employment. We support the principles of protectionism up to the hilt. But protectionism must be qualified and effective protectionism does not mean slaphappy, indiscriminate backing of every promoter, including foreign interests, who has the finance to start operations in Australia. It does not necessarily mean the indiscriminate backing of inefficient industries whose resources would be best employed in other pursuits which in turn would lead to a higher level of real national income. Why do we say that it is necessary for the Tariff Board to give more weight to interpretations relating to the efficient use of resources as well as to the economic soundness of a particular industry? Why do we sound a note of warning to the Government that indiscriminate high protectionism of inefficient or uneconomic industries in the accepted tariff criteria sense may - I emphasise that word - be undesirable? We know that it is an accepted economic principle that the introduction of international trade lowers the real wage of the scarce factor expressed in terms of any commodity, whether it be wheat or ballbearings. That applies irrespective of how complex the number of items traded might be.

In Australia we may argue in general terms that land is abundant relative to labour and therefore tariffs raise the real income of labour. But to take an extreme view, it does not follow that the Australian farmer or working man would be better off today in real income terms if trade with Malaysia and other countries in the tropics were abolished and we established rubber and coffee plantations through a high protectionist policy in Australia. Let us also remember that we must look very carefully at this term ‘full employment’. It is a hobby horse of members of this Government. They use this term and boast that full employment exists. But a critical examination of full employment leaves much to be desired. Some sectors of small, inefficient backyard industries today are on the poverty line. Plenty of farmers in the marginal dairying areas and the sugar areas - cane farmers with small peaks - irrespective of how efficient they might be, if their farms are not big enough, have net incomes that are not sufficient for them and their families to carry on in the manner in which we would like them to. Although we have full employment there are still pockets of poverty. So let us be quite clear that the term ‘full employment’ does not mean that there is no poverty.

Therefore, let us recognise once and for all that although a tariff favours some people and prejudices others in the country that is imposing the tariff, it does not follow that labour is generally and universally better off as a result of the imposition of a blanket policy of protectionism. This is particularly so when the protection is extended to grossly inefficient industries or industries that can survive only under the protection of an abnormally high tariff. The full employment principle reminds me of a sporting club that for years made an annual profit of $1,000. After the factors of production were looked at closely it made an annual profit of $3,000. In the first instance everyone was happy; in the second instance all were happier and the staff received higher bonuses.

The recent report of the Tariff Board on chemicals and synthetic resins has caused great interest and speculation throughout Australia because of the introduction of this Bill. The implementation by the Government of the Board’s recommendations on protection of the chemical industry will have the effect of galvanising other industries into action in an attempt to share in the benefits of this new approach based on the granting of what we may describe as super tariffs to protect the chemical industry. The crux of the problem facing chemical producers in Australia today is the widely diversified small market in association with a relatively small throughput, in contrast to chemical industries overseas, particularly in the United States of America, in Europe and now in Japan. Inherent in the manufacture of chemicals are the chain processes of production and fragmentation as well as the cost of distribution from the centres of manufacture to the centres of consumption.

The support values advocated have as their objective the minimising of the effects of dumping or disruptive pricing on the Australian market. It may be necessary for the Tariff Board, in its wisdom, to review the level of support values each year. But the way is now clear for chemical producers who are not receiving the benefit of support values to apply to the Government for the same measure of protection. Thus, even though the protection of duties at the ordinary level may be given to the manufacturers of chemicals, they will be able to avail themselves of the support value principle. Under the terms of this measure, if the landed cost of a chemical is less than the support value, which, of course, allows for the cost of landing chemicals in Australia, there will be payable a duty equal to 90% of the difference between the support value and the actual landed cost. Again, this is really designed to safeguard the chemical industry against dumping. This kind of super protection, if implemented by the Government, could create a climate conducive to inefficiency. When an industry knows full well that it has nothing to fear from imports it may become reluctant to introduce new technology, it may permit obsolescence, or its management may become sluggish and complacent, particularly if the industry is a monopoly or an oligopoly.

The result that can and will flow from this policy of super protection is that the Australian consumers of chemicals will have to pay significantly higher prices for them. As I have said before, the primary producing sector of the economy, including both farmers and workers, will have to bear a significant proportion of any increase in the prices of chemicals. The policy of this Government in respect of the chemical industry has been, in effect, to isolate the industry and to place it on a pedestal of its own. This is economically dangerous, because the threat of healthy competition from efficient industries overseas will keep a particular industry in Australia which is basking contentedly in its ivory tower of protection at least honest and induce it to try to maintain efficiency and keep prices at reasonable levels.

In considering this Bill, one may ask: what is the position in respect of the bulk handling of chemicals? Is the support value principle the same for chemicals handled in bulk as it is for chemicals handled in small lots? Also, it is obvious that we could have excess investment in the chemical industry. The climate is now favourable for further invasions of foreign capital into this industry because we have a guaranteed floor price principle protecting it.

In conclusion, I wish to refer to some of the indirect effects of a blanket protection of industries on the overall development of our nation’s resources. The sphere of national activity which must of necessity suffer from an over-protectionist society is the tertiary sector. Under the guise of full employment the Government is able to put forward cases which tend to hoodwink people into the belief that if these heavily protected industries did not exist Australians would not have the jobs that they occupy today. This is particularly so with respect to foreign owned industries, as the Minister for Trade and Industry mentioned in answer to a question a few days ago. In his reply, the right honourable gentleman tried to ridicule the honourable member for Capricornia (Mr Gray). He said:

What must be recognised by the gentlemen who sit opposite and who speak for Labor is that all the people who are employed by these companies are Australians. It is their jobs which are being protected.

I do not argue with the general thought behind that, but as long as this type of thinking can be rammed down the throats of Australians, including the workers, we shall have the perfect alibi for the Government in its neglect of development of many of our natural resources and for the indiscriminate inflow of foreign capital. It is patently obvious that the Government would rather protect foreign owned monopolies than build urgently required water conservation projects the construction of which not only involves employment but also allows the opening up of permanent areas of settlement based on, say, irrigation and power. Roads, aerodromes, railways, water conservation, improved port facilities, timber clearing, ship building and education are all vital to the economic health of this country. All employ men and materials and all at the present time are being starved of funds.

Mr Speaker, the amendment moved by the honourable member for Yarra serves notice on this Government that we are no longer prepared to accept without argument this hocus pocus blanket approach to tariff policy which has rapidly developed in the last few years. In the interests of the overall national economy and the Australian work force, greater weight must be given by the Tariff Board and the Government to the interpretation of economic standards and efficiency within the context of the economics of Australian manufacturing industries. If inefficient or uneconomic industries are to be afforded, indiscriminately, high protection by tariffs, the Australian public and this Parliament should know the full reasons why, supported by sound economic arguments and sound economic policies. I repeat that it does not follow that a blanket policy of indiscriminate protection for inefficient industries will result in the raising of the average real income of labour under full employment. It can in fact result in a lower real income in the longer term.

Mr GILES:
Angas

– I have been very charmed tonight to listen to speeches which indicate the fact, referred to already by the Minister for Trade and Industry (Mr McEwen), that there has been a complete about face on the part of the Opposition in its attitude to tariff policy. In this case I must admit that I have a great deal of sympathy with many aspects of its change. One exception is the control of dividend policies, which was referred to in the amendment moved by the honourable member for Yarra (Dr J. F. Cairns). I trust that he will forgive me if I am not completely in accord with that type of generalisation. I hope that even the honourable member for Brisbane (Mr Cross) does not stand fully behind that sort of approach. I am interested, as I say, in this attitude. I am sorry for the honourable member for Watson (Mr Cope) and the honourable member for Scullin (Mr Peters), who evidently are the representatives of the old economic approach of the Labor Party, if one can believe the statements made in the Press this morning. I note that these honourable gentlemen stick out for the principles for which they have stood for some time.

Mr Howson:

– They have been very silent tonight.

Mr GILES:

– Through you, Mr Speaker. I say to the Minister that they have been notably silent. I was interested also in the reference by the honourable member for Dawson (Dr Patterson) to certain aspects of tariff policy as being inconsistent. This was rather nice, I thought, considering how the attitude of the Opposition on these matters seems to have changed. I was also interested in his reference to monopolistic and oligopolistic practices. It is a very nice phrase to say and I was charmed with his ability to say it. He mentioned also of course his doubts about full employment. Here he is getting on to more dangerous ground because, firstly, it seems to me to be a well accepted fact that the employment concept, in terms of tariff policy, does not bear much relation to the situation that we find in Australia today. The honourable member for Dawson questioned the degree of full employment. I would have thought that there was either full employment or unem ployment; but he is very highly educated in these things and I must accept his view that the degree is important.

I noted that he brought into the argument certain matters that relate to the performance of a Queensland government of some years ago in developing the State of Queensland. It is quite obvious when one looks at the deadly lack of rainfall in areas that have been subject to development in States other than Queensland that the industries to which he referred would -have got away to a much better start had they received the impetus and help from the Queensland Government that they received from the other State governments perhaps twenty years ago. I was rather interested also in the honourable member’s reference to sporting goods firms in relation to margin of profit. If there is one aspect of tariff policy which would seem to me to be quite open to doubt it is whether or not any tariff board, by means of a close inspection of accountancy methods, balance sheets and profit and loss accounts, can accurately determine profits. I will mention this matter later in my speech.

In passing let me touch on some points raised by the honourable member for Yarra. I was rather disappointed - because I agreed with him so frequently - to hear him come out with the suggestion that any firm which can prove that it is in business already will be able to get tariff protection. That of course is quite idiotic and quite stupid. Honourable members will be well aware of many instances where exactly the opposite has occurred. I can think of one or two cases in my own electorate which did not please me at all, judged in a nonobjective fashion. But I have no doubt that the Tariff Board had reasons for not accepting this type of proposition. The only other part of the speech of the honourable member for Yarra to which I personally objected very profoundly was his reference to old industrial friends of the Government who could always depend on patronage from this source. That of course is a scurrilous statement and an attempt to play cheap politics. There is not a shadow of doubt about that.

I speak on this subject tonight with considerable hesitation when I think of the tremendous knowledge gained over many years of careful study by my colleague the

Minister for Works (Mr Kelly). Probably it was only last week, when I really gol my head down, that I fully appreciated the immensity of the task that the honourable member for Wakefield had attempted. This is a most complex, complicated and involved matter where one action bears upon another over a wide range within one industry and over an even wider range between industries that are linked through manufacturing processes and raw material supplies.

I believe that there are matters of tariff policy that are of very great importance at this time to this country and to this Parliament. During my speech I intend “to ask the Minister for Trade and Industry, with great respect, whether he will table a statement in due course giving a full description in some detail of tariff policy as it affects this nation today. I take the point that the Parliament itself, for a variety of reasons, has in the past probably not considered sufficiently thoroughly the importance of tariff decisions as they affect the nation’s economy. I would hope that the Minister will ensure that the Parliament is fully informed on these matters as they commence to assume, as I imagine they will, a greater and greater degree of importance.

I see that the much maligned Press has brought to attention the problems involved in depreciation under the accounting system of the Broken Hill Pty Co. Ltd. This is the kind of thing that could have enormous implications for Australia. For all I know, one of these days we may see tariff legislation enacted or bounty action taken, or some other form of action along similar lines, affecting the import of petroleum into Australia. We already have the report on basic chemicals, a report that affects to a tremendous extent a host of items with which we are in common contact. I think, Mr Speaker, of the number of articles that one sees in an ordinary bathroom these days which are produced in some shape or form from basic chemicals or chemicals that have been developed from those basic chemicals. We see toothbrush bristles, artificial handles, vinyl tiles, artificial rubber plugs - practically everything found in a bathroom today apart altogether from the actual toilet necessities is based on the chemical industry. This gives a small idea of the impact that action taken recently by the Government in respect of basic chemicals can have on the lives of all of us. Taking into account the cumulative effect on all these small items, the whole situation obviously becomes extremely complex.

I believe, therefore, that it is only right that the Parliament should have the opportunity to debate tariff policy matters. I frankly do not believe it is of much use to go back to 1958 and quote something from the Ottawa Agreement, or to refer back to the United Kingdom-Australian Trade Agreement of 1957. This is not the way to obtain the best information available about policy and the implications of that policy. So I would appreciate, as I am quite sure this House would appreciate, a full scale debate in which I hope many constructive ideas would come forward, and in which this House, this Parliament and this nation could be given the details of the policy on which depends to such a very large extent the whole economy of this country.

I think it was in the 1920s that the Tariff Board was set up. Why was it set up? It was set up, probably for three reasons in those days. The prime reason would have been to protect the then Minister for Trade, and indeed his Department, from embarrassing situations. There might well have been tariff decisions to be made affecting the electorate of the Minister for Trade of that day. There might also have been decisions to be made on policy matters within the Department of Trade that would have been embarrassing to certain people. This was probably one reason why the Tariff Board was set up in those days. Secondly, quite obviously it was set up to give complete, effective and prompt treatment to tariff matters. I suggest that thirdly this independent Tariff Board was set up to make tariff decisions look right in the eyes of the people of Australia. This was to be an impartial independent body.

I think, and I hope I am not wrong in my assessment of the position, that there is enough evidence today to say that this independence is not complete. I am sorry that I differ on this from the Minister for Trade and Industry who has so many better opportunities than I have for knowing whether he is right or wrong. But I think back to previous members of the Tariff Board who have seen fit to resign.

I think back to my own area where one sees sometimes weedicides and insecticides sold at a certain price level until competitors appear on the scene. Then the price to the consumer drops 30% to 40% straightaway. Frankly, all these things make me wonder whether there is complete independence for the Tariff Board on one hand and, on the other hand, whether profits are accurately tabulated in Tariff Board inquiries.

There are other problems we are faced with and I intend later to touch on some of the changes that have occurred in the last year or two to make the matter of defining tariff policy essential. What are these other problems? Firstly, may .1 compliment the Tariff Board and the Minister for Trade and Industry on the vastly better facilities that we have now for understanding tariff action compared with those a few years ago when I first entered this House. I think the process is better and more accurately portrayed and gives a better impression to honourable members who are prepared to look at these matters than they had under past procedures. Personally I congratulate the Tariff Board on its work. I congratulate the three more independent members, if I may so describe them. I may be wrong but I believe they have brought to bear an attitude of mind that has been most important in effecting decisions on tariffs. On the other hand I cannot say that I completely agree with part-time appointments to the Board.

Certainly I am not happy about another aspect of this matter and in saying so I hope I do not offend one who probably is a most worthy citizen and for all I know an extraordinarily competent man. Reviewing his history I should think this is certainly so. But how does it look in the eyes of the ordinary person in Australia and indeed to some members of this Parliament when they learn that Mr Callaghan, who worked in the Department of Trade and Industry when the terms of reference for the inquiry into chemicals were being drafted, and then as Deputy Chairman of the Tariff Board, if that is the correct title, was one of only two men to receive evidence on the matter? Later he returned to the Department having been promoted to a very interesting and vital job. Mr W. Callaghan now holds the new position of Head, Office of Secondary Industry which is beginning to take a definite form. Its role will be clarified no doubt over the years. I am not condemning the man at all but what a peculiar situation it is when it concerns the most important inquiry affecting the economy of Australia. Mr Callaghan was virtually at the origin of the terms of reference of the inquiry. He was appointed to the Tariff Board and was one of two people to receive evidence. The other person put in a minority report. Since Mr Rattigan, who I understand did not actually receive the evidence but no doubt went through it carefully, sided with Mr Callaghan, the third member had to sign a dissenting report. This, to my mind, is peculiar enough, but then we find that, evidence having been received and a recommendation having been put through to the Government, the same man is back at the point of origin. Frankly, in my view, no matter how good the reasons for this may be, and no matter how good the man may be, these are actions that do not appeal initially to any fair minded person because they do not look good. So I get back to my point that the third reason for ensuring the independence of the Tariff Board is that it is essential that it be an impartial, fair body in order that its decisions might look better in the eyes of the people of Australia or, indeed, of anybody else.

Earlier I touched briefly on the principles behind tariffs. I note that the honourable member for Dawson also did that. Indeed, the honourable member for Dawson went fairly solidly through the paragraphs on page 371 of the Vernon Committee’s report. I will not follow on with that, because I think he made his point. He discussed the provisions of the Ottawa Agreement of 1932 and the United Kingdom-Australia Trade Agreement of 1957 and dealt briefly with the Tariff Board’s attempts to define the word ‘economic’ and the word ‘efficient’. But he should have gone further and quoted what the Vernon Committee’s report says with relation to the important difference between those two words. In my view, this is the key as to whether decisions that are made are accurate and good or not. The key words are ‘economic’ and ‘efficient’. Paragraph 14.11 of the Committee’s report takes up this matter and points out that in its expert opinion the Tariff Board tends to use the term ‘efficient’ as relating to technical efficiency. The Committee says:

It is hard to distinguish clearly from questions of economic efficiency although there are significant differences between the two concepts.

In other words, an uneconomic industry may be as efficient in a technical sense as an economic one. The Committee goes on to complete its outline of the difficulties confronting an authority such as the Tariff Board in accurately interpreting these terms. It goes on to state:

The Board often inquires whether the Australian industry is using the most efficient process available having regard to the size of the Australian market. This latter proviso is important because an increase in technical efficiency may be achieved only at such a cost that the industry ceases to be economic.

This is a most important point and one with which 1 feel any debate that we may have in the future on the matter of tariffs must quite obviously be vitally concerned. It would appear to me from the Tariff Board’s last annua] report that the Board attempts - I feel in some ways successfully - to answer this contention of the Vernon Committee’s report, yet to my mind the definition is not clear cut. I feel that it is important that it be made a lot plainer than it is.

I mentioned a little while ago that 1 would deal with changes that have occurred, and upon which I largely base my request to the Minister to make a statement on tariff policy and allow us to debate that statement. We have already mentioned full employment. The honourable member for Dawson dealt with that. We now have this new concept of price support. In other words if a competitor of an article manufactured in Australia attempts, because he has a surplus of production, to bring in a cheaper commodity the price support concept operates. It operates on a moving scale, as the honourable member for Dawson accurately described it. A duty is then payable at the rate of 90% of the difference between the landed cost and the price of the local article. By this means, better protection is given than has ever applied before to a locally manufactured product. I realise that there have been prior instances of the application of sliding scales with different tariff provisions but here, as the Minister for Trade and Industry has said, is a clear indication of Government policy. I do not know, however, that I am prepared to accept this degree of guarantee unless we can be fully satisfied about profit margins, responsibility for export considerations and a host of other factors.

Not long ago we had what can be described as anticipatory protection. We have had the report of the Vernon Committee which conflicts with many of the Tariff Board’s existing attitudes. We have had the recent rejection by the Government of two Tariff Board recommendations. The Minister for Trade and Industry has expressed his attitude to job protection. This is a principle that I do not agree with personally in considering tariff measures. The honourable member for Bendigo (Mr. Beaton) spoke recently of the implications of balanced development on our tariff policy. This is another attitude that I do not accept. These are all new reasons why we, as a Parliament, should take a keen interest in tariff matters. I can understand the necessity for the Minister for Trade and Industry being able to include in a term of reference to the Tariff Board some indications as to the effects tariffs will have on defence and, indeed, trade. However I think that all honourable members agree that the best means of helping an under developed country is to encourage it to help itself. I remember some time ago - in fact, I think it was in my maiden speech - asking for a bending of tariff barriers to enable simple manufactured goods to come into Australia. I do not pretend for one moment that my plea had the slightest effect on the policy expressed by the Minister for Trade and Industry. However I think I can claim that it shows that other minds were thinking on similar lines. I may be digressing somewhat from the subject, but I believe that at neither end of the spectrum is this policy altogether successful. At one end we find the rather ludicrous situation that if we attempt to help Indian handicraft goods, they are not permitted into Australia without the imposition of heavy duty, yet these would seem to me to be simple manufactured articles. At the other end of the spectrum I do not believe we have gone far enough in achieving a proper degree of help for the simple manufactured goods from other countries. In other words, I should like to see the whole scheme broadened.

I think it was the honourable member for Dawson who mentioned new industry, which is another matter about which I feel quite keenly. I note that the Vernon report also deals with this matter. I believe that at this point of time, bearing in mind the important questions of economy and future efficiency, we do not give enough protection to a new industry which is trying to establish itself. I think there is much to be said for the pioneer status concept of South East Asian countries which provides for some form of policy that not only will give income tax rebates and deductions but also will permit entry of raw materials under, perhaps, a type of by-law exemption. In other words, it gives high protection for a period.

Probably all honourable members would abhor any suggestion, such as we have seen in the Press recently, that the Tariff Board should continue to recommend tariffs on industries which could never become economic in the true sense of the word. But I think this is the opposite concept. I believe that, if we made it quite plain that our policy is to allow a pioneer status for a new industry, we would get much closer to the ideal of looking after the future expansion of the Australian economy. One aspect of the matter which probably has been mentioned by the Minister for Works over a period of time is that of excess factory capacity. This involves the question of capital investment and whether we can expect foreign investors to take risks.

Mr Uren:

– What risks do foreign investors take?

Mr GILES:

– I am afaid that I cannot hear the honourable member’s burbling. In any case I have not time to answer him. I should like to mention what Sir Paul Chambers, who I gather is the Chairman of Directors of Imperial Chemical Industries in England, says on this matter. In my view this is a most interesting point; it is one of which honourable members should be aware. He said:

Some of the greatest pressure on our resources goes - not to provide additional desirable social services - but to maintain a state of low productivity both in the public sector of the economy, as represented by certain nationalised industries -

That would apply to Great Britain more than to Australia: and in the private sector, where it takes the form of subsidies or protection against competition.

He was a pretty influential man who said this, and it seems to me that I have heard the same argument in past years during Customs Tariff debates. Frankly, it is an outstanding remark to come from a man such as he. Before concluding my remarks may I say that anything I have said tonight has been said with great deference and respect to those who know infinitely more than I do. However, I would say that in order to maximise the rate of national development in Australia, our resources of labour and capital must obviously be channelled into industries which have the greatest natural advantages and the best prospects for competing both with imports and on the world markets. It is vitally important that Australia’s tariff policy should operate consistently on this principle.

Amendment negatived.

Original 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 819

PARLIAMENTARY PROCEEDINGS BROADCASTING COMMITTEE

Motion (by Mr Snedden) - by leave - agreed to:

That, in accordance with the provisions of the Parliamentary Proceedings Broadcasting Act 1946-1960, in addition to Mr Speaker ex officio the honourable member for Banks (Mr Costa), the honourable member for Barton (Mr Arthur), the honourable member for Kingston (Miss Brownbill), the honourable member for Macquarie (Mr Luchetti) and the honourable member for Mallee (Mr Turnbull) be members of the Joint Committee on the Broadcasting of Parliamentary Proceedings.

page 819

ADJOURNMENT

Northern Territory - Aid to Overseas Countries - Overseas Investment in Australia - Political Parties

Motion (by Mr Snedden) proposed:

That the House do now adjourn.

Dr PATTERSON:
Dawson

– I wish to refer again to the question of land tenure in the Northern Territory. Neither the

Prime Minister (Mr Harold Holt) nor the Minister for Territories (Mr Barnes) has replied in this Parliament to the matters I have already raised in relation to this subject. Because of its importance I intend to raise it again and again if necessary until the facts of this proposed land deal are brought before the Australian public.

It is a strange coincidence that although my statement received wide publicity in many newspapers south of Brisbane. I have not found one Queensland newspaper north of Brisbane which contained any reference to it. Yet most northern newspapers in the few days following my statement carried Sir William Gunn’s denial of the substance of my charges. The ‘Courier Mail’ carried portion of the substance of my statement as well as Sir William’s reply. One can be forgiven for reaching the conclusion that so powerful is Sir William Gunn and the foreign interests he represents that they are able even to suppress news stories in north Queensland newspapers.

I challenge the Prime Minister or the Minister for Territories to refute my remarks relating to the proposed takeover of the two and a quarter million-acre Tipperary Station located near the main bitumen highway south of Darwin. First and foremost I intend to illustrate how powerful are the foreign interests in Australia and how they apparently can dictate their own terms to this Government. These interests which are represented in Australia by Sir William Gunn and the partners in the Lakefield Company had access to the proposed amendments to the ordinance before the Minister for Territories even advised this Parliament of them. I ask the Minister to confirm or deny that. I ask the Minister this question: were the principals of this company shown the proposed amendments as they affect pastoral leases, agricultural development leases and agricultural leases in the Northern Territory before Cabinet considered them? I reserve my comments on this point until after the Minister replies.

Under the current ordinance it is impossible for foreign companies to take up agricultural land for agricultural activities in the Northern Territory. Strict personal residential requirements are imposed with the objective of giving priority to Aus tralian farmers, as is the case with the excellent Queensland brigalow land settlement scheme. Furthermore the maximum area which can be held by one farmer or one interest is 38,400 acres. The company approached the Government more than six weeks ago - four weeks before we heard anything in this Parliament of the proposed amendments - and requested the Government to change the land laws to enable the company to take over and farm approximately one million acres of Tipperary Station. In effect, this meant abolishing the personal residential requirements which preserve the land for Australian settlers. The Government has now abolished all personal residential requirements so that agricultural land in the Northern Territory is now wide open for foreign takeovers.

The company requested the right to subdivide and sell farming land and asked that agricultural leases be granted to it, after development, for up to 500,000 acres of this farming land which comprises Tippera and Blain soils. It wants title to this valuable land so that eventually it can sell 500,000 acres in subdivision and retain 500,000 acres for itself with the objective of finally freeholding it. The Government now intends to alter the restriction of 38,400 acres to 200,000 acres for one interest. The foreign company of course wants 500,000 acres and it will look for loopholes in the definition of ‘one interest’. Sir William Gunn is reported to have stated that the management has no plans for the development of grain sorghum or peanuts. That denial is most unfortunate because the Lakefield company, when notifying the Government that Sir William would be its managing director, also had firm proposals for growing grain sorghum, peanuts and rice on these soils. This grandiose scheme envisaged an initial planting of sorghum on over 10,000 acres at one hit.

This foreign venture has no intention of letting Australian capital into Tipperary before it subdivides and develops the land and sells it to Australians, presumably at substantial profits. The only Australian to have any equity in this giant deal will in fact be Sir William himself. So powerful is this company that it issued a mandate to the Government that unless its conditions relating to the alteration of the present ordinance with respect to agricultural activities on pastoral leases and subdivision for sale to others were altered it would not go ahead with its plans to take over Tipperary and engage in this mammoth undertaking. By approving the amended land tenure laws the Government has given the green light to this company and to all foreign companies to acquire the best agricultural land in the Northern Territory and to be in a position to exploit it to the full. This situation suggests that the Government is in full agreement with the colossal sell-out of Australia’s heritage.

The whole deal was rushed through Parliament without debate. I could not even comment on it. I wished to ask the Minister a couple of technical questions only. When he refused me permission it was quite obvious that there was something behind it. The north was buzzing about this land deal before I found out about it. The reason for the rush is that .the foreign company wants to commence its operations this year. It has even told the Government that legislation must be finalised by June of this year. Even more remarkable is the fact that as a condition of the foreign company’s proceeding with the deal it is demanding from the Government a written statement showing that it backs the proposal to the hilt. Blind Freddie knows, of course, that with such a letter in his pocket a foreign promoter would have the equivalent of a goldmine.

There is a serious lack of basic research on soils, crop varieties and marketing methods in this area. No feasibility studies have been carried out. How could any government give such a guarantee as this foreign company wants? If it did, it would richly deserve the name of a confidence trickster government. Sir William Gunn has denied that it is the intention of the management to control the water resources of the Daly River. It is the intention of the company to build a dam on the Daly River for exactly that activity, but as the most likely dam sites are located on the Daly River reserve the company wants rights to the reserve.

The blueprint for developing this valueable land is available. It can be based on the highly successful Queensland brigalow land settlement scheme. That scheme will prove to be one of Australia’s greatest assets in both agricultural and pastoral production. Australian farmers and if necessary Australian companies could participate in a properly organised civilian land settlement scheme backed by research workers in the Commonwealth Scientific and Industrial Research Organisation and Northern Territory Administration, backed by Australian Government finance. If, and only if the Australian Government will do nothing to develop this area and help farmers settle the land, a case exists for the wholesale sell-out of the agricultural soils of the Northern Territory to foreign interests. But if that happens, the Government stands for ever condemned.

Sir William Gunn has accused me of changing my views on land tenure since I entered Parliament. He has said that I was a strong advocate of more secure land tenure in the north and that in fact I advocated freehold tenure. I have never changed my views. I still adhere to those very principles quoted by Sir William. I have never blamed him or foreign interests for taking over control of most of Cape York Peninsula. I blame the Government for refusing to build roads or to provide long term finance or to enter into a well conceived land settlement scheme to help Australians settle those areas. With those qualifications in mind, Sir William Gunn is doing a good job for cattle on Cape York Peninsular. I repeat - for cattle, and not for agriculture. I would never be a party to these interests or to any company being granted freehold title to thousands of square miles of this high rainfall country. I have no argument with perpetual lease or conditional freehold title for regions related to soundly based living areas for a family. My views on the brigalow scheme are well known. Conditional freehold for family living areas is an excellent concept. The Tipperary land deal is quite a different proposition from that of cattle in Cape York. This is intensive potential agricultural land. We do not want another Humpty Doo. This land is located close to the bitumen and relatively close to Darwin. There is not an abundance of potential arable soils in the Northern Territory under present day land conditions. The land deal now comes on top of the scandal of last year of foreign interests winning ballots in the old Alexandria Downs lease at the expense of experienced Australians, some of whom were even excluded from the ballot. A royal commission should be set up immediately to investigate land tenure and land ownership in the Northern Territory as presently administered by the Minister for Territories.

Mr BARNES:
Minister for Territories · Mcpherson · CP

– Firstly, 1 thank the honourable member for Dawson (Dr Patterson) for warning me of his intention to speak on the motion for the adjournment tonight. I am amazed at the type of speech that he has made when 1 remember that he was once the head of an important division of a government department that had as its objective the development of the north. He has brought into his remarks a number of hypothetical questions. Apparently the honourable member knows a great deal more than I do about the intentions of various companies in the Northern Territory. I have had applications from many people to take up leases in that area. I think that the best thing for me to do at this stage is to review the land policies of the Government in the Northern Territory. I will not do this in detail because as honourable members will remember I made the point in my remarks when I introduced the proposals in the House last week that they were matters for the decision of the Legislative Council for the Northern Territory.

I ask honourable members to cast their minds back to the early 1950s when the first rise in cattle prices took place in the Northern Territory. At that time pastoral leases were for a forty-two year tenure. Our aim, with the prospects of increasing prosperity in the cattle industry, was to provide increased tenure so that people would enter the cattle industry in the Northern Territory and invest considerable sums in producing a greater cattle turn off. In this endeavour we were eminently successful. Thousands of miles of fencing were put up. People took control over areas where previously brumbies, micks and cattle were running out of control. In this process the Government has assisted cattle improvement by subsidising freights for bulls, and in other ways. Also, of course, two abattoirs have been established, one at Katherine and the other at Darwin. For the first time in the history of the Northern

Territory there has been tremendous prosperity in the cattle industry.

This was all right up to a point. Three years ago we had a breakthrough in pasture improvement. It came to the knowledge of most people in the Northern Territory through the work of the Katherine research station and the Commonwealth Scientific and Industrial Research Organisation that Townsville lucerne was a successful plant in this area. Now, certain developments which may be proved at research stations are not always found to be successful when they are taken out and applied in commercial agriculture. On this occasion the graziers, farmers and people of that area realised that they had a good thing. The situation today is that many of the large properties in the higher rainfall area from Katherine north have gone into the operation of sowing Townsville lucerne. When a person starts this sort of operation, he comes into the agricultural environment. He has to buy tractors, ploughs, drills, mowers, rakes and all the rest of it. When a Townsville lucerne paddock is established the nitrogen content of the soil is built up. When this occurs the next thing is to sow a crop. Under the present land ordinance of the Northern Territory a pastoralist is not permitted to engage in any form of agriculture whatsoever. It has been the ambition of this Government to bring agriculture to the Northern Territory.

We have not succeeded and we will not succeed until we get thousands of farmers in this heavy rainfall area. There are 32 million acres of country in this heavy rainfall area. Of course, not all of it is arable but a large percentage of it is. We have not found a way of making a go of it, despite the tremendous efforts of public and private enterprise in this operation. We all know what happened at Humpty Doo. We all were hopeful of a great rice industry being established in the Northern Territory. This Government has established pilot farms. It has financed small men on experimental farms, but none of them have been successful. The only ones that have been successful are those concerned with cattle fattening and breeding. But the farms concerned with a combination of cattle fattening and rice growing alone have not been a success. The cattle operations with Townsville lucerne certainly have been a success.

We have tried to assist in the development of other crops. We have provided a guaranteed price for sorghum in the Northern Territory. We have promoted marketing organisations and facilities, but I think the best we could do last year with sorghum was about 300 tons. We have not been able to get off the ground so far. We have the situation where people who have the resources want to spend money. They are people who have gained experience and know-how elsewhere. They have risk capital to invest in order to develop these areas. I say good luck to them.

Would the honourable member for Dawson condemn the Ninety Mile Desert venture of the Australian Mutual Provident Society? Here was an area of desert, covered with mallee and sand, producing nothing. An enterprising company came in and took a risk on developing this area and putting hundreds of settlers on to it. This scheme extended into Victoria. I understand that there is an area of approximately 64 million acres. I gather that the honourable member for Dawson would condemn this sort of thing. He has talked about Government research and Government efforts. This sort of talk reminds one of the Peak Downs operation, in which the British Food Corporation, together with the Queensland Labor Government, commenced a socialist operation on half a million acres of country. The story is a very unfortunate one. That area had to be sold to private enterprise because such a hopeless mess was made of the operation.

Our aim in the Northern Territory is to put thousands of farmers on the heavy rainfall country. We have had tremendous success in the southern areas of the continent, but I am afraid that in the northern tropical areas - the heavy rainfall areas - we have nothing to show for our efforts and for the expenditure of hundreds of thousands of dollars. A total of $1.5m was invested in Humpty Doo alone. I do not know what the Commonwealth Government has spent - it was far more than that - on research stations and in assisting small men with agricultural development. I believe that we must get people with resources to go into these areas, find the answers to the problems and develop the areas, just as the AMP Society went into the Ninety Mile Desert area and, when it found the answers to the problems, settled the smaller men on to the land, provided markets and developed the country. I think that this is the right approach. We are determined to develop the north of Australia. I believe that the proposals we have put before the Legislative Council for the Northern Territory will meet the ambitions of the people of the Northern Territory. I believe that the Legislstive Council is perfectly competent to deal with this sort of thing.

The other scare statements of the honourable member for Dawson are amazing. I suppose he is trying to frighten the Legislative Council into turning down these proposals. But I have great faith in the members of the Legislative Council. I know that they will make a full study of the proposals, because they know the situation in the Northern Territory.

Dr J F Cairns:
YARRA, VICTORIA · ALP

– The Minister for Territories (Mr Barnes) took his time in dealing with the matter raised by the honourable member for Dawson (Dr Patterson) but did not give any details of the proposals put to the Legislative Council for the Northern Territory. The Minister did not say whether there is a proposal to hand over an enormous area of land in the north under freehold title to a group of investors led by Sir William Gunn. The Minister has not denied this. He has not seen fit to come to grips with the matter at all. Is this the proposal that he is putting to the Legislative Council?

Mr Barnes:

– Does the honourable member for Yarra not think that the Legislative Council is competent to have an idea of its own on this issue?

Dr J F Cairns:
YARRA, VICTORIA · ALP

– You have been asked the question. You have refused to give an answer to the honourable member for Dawson.

Mr SPEAKER (Hon W J Aston:
PHILLIP, NEW SOUTH WALES

Order! The honourable member for Yarra will direct his remarks to the Chair.

Dr J F Cairns:
YARRA, VICTORIA · ALP

– Obviously the Minister has a great deal to hide and he spent ten minutes this evening effectively hiding something. He has refused and failed to come to grips with the proposition put to him by the honourable member for Dawson. This is evidence not only that he is hiding something but also that he thinks something is wrong, otherwise he would be frank and tell us what has been put to the Legislative Council for the Northern Territory.

I want to deal now with another matter altogether. Recently a group of people in Australia brought into existence a voluntary organisation which has been collecting milk for India. It has collected large quantities in various parts of Australia. The venture was originated by Mrs J. F. Dynon of Malvern, Victoria. There are now nineteen milk for India committees operating in various parts of Australia. These people collected powdered milk for India, which was very necessary. Their action had the support of the former Prime Minister of India, Mr Shastri. and has the support of the present Prime Minister, Mrs Gandhi, and of the Indian Minister for Food and Agriculture.

On 29th December 1964 Mrs Dynan requested that the Commonwealth Government assist in meeting the shipping and insurance costs incurred in the milk for India campaign. On the same day the then Prime Minister, Sir Robert Menzies, replied stating that an allocation was being made to cover shipping and insurance costs. Since then the Government has provided six allocations of funds for this very desirable purpose. But on 4th December 1966 Mrs Dynan wrote to the Prime Minister (Mr Harold Holt) requesting further allocations. She states that since then she has sent two letters and one telegram to the Prime Minister, the last being on 10th March this year, and that she has written also to the Minister for External Affairs (Mr Hasluck) and the Treasurer (Mr McMahon). She states that the replies she has received indicate that the Government has undertaken a review of the whole subject of Commonwealth assistance for voluntary aid schemes in Australia. Apparently this review has been going on for some time but it has taken an extraordinarily long time to come to a head.

The position was further developed on 14th March - last Tuesday - when the Leader of the Opposition (Mr Whitlam) asked the Prime Minister what was being done about providing assistance for the Aid to India Campaign. The Prime Minister passed the question to the Minister for External Affairs, who replied:

In our governmental aid the forms of aid we give are as the result of consultation with the receiving country and a request by the government of that country. So I am sure the honourable gentleman will appreciate the point that we do have to make sure that before public funds are expended the form of aid is the result of a decision in which the receiving countries join rather than a decision that has been made ad hoc by a group full of good intentions but perhaps not always with close local knowledge of the circumstances it is trying to believe.

Turning to the particular proposition raised by the Leader of the Opposition, the Minister pointed out that on previous occasions the Government had assisted. He said:

This aid comes from governmental sources. We believe that this private fund should complete its own job to its own satisfaction from its own means.

Apparently that means that the Government has refused to provide this assistance - that is, some of the shipping and insurance costs on the many tons of powdered milk that already have been collected and are ready to be sent off to India.

This comes in strange contrast to the Government’s attitude on many other matters. The Government says that this matter of foreign aid is to be purely and simply a government to government matter. It is to be a sort of Socialist or government enterprise. This Government will not assist any private enterprise in this field at all. This comes very strangely from a Government that is constantly criticising honourable members on this side of the House for their attitude. Apparently the policy of the Government that honourable members opposite support will be that it will not give any assistance to private bodies that operate in the field of economic aid by providing such things as shipping and insurance costs for sending goods that have been collected to the place where they are badly needed.

This attitude also is in strange contrast to a decision which was made on another matter. On 9th March the Leader of the Opposition asked the Minister for Defence (Mr Fairhall) whether some generators had been procured in Australia for sending to Vietnam. The Minister for Defence said that they had, and he expounded a principle. He said:

Aid is generally under the control of the Department of External Affairs which, as a matter of policy, believes that a civilian agency or organisation that undertakes a thoroughly good work of this kind should go the second mile and itself arrange for the transport to Vietnam of the supplies that it has assembled.

So apparently, as far as the Minister for Defence was concerned, the Government did not propose to assist in sending these generators to Vietnam. But about twenty minutes later the Prime Minister chose to stand up in the House and contradict the Minister for Defence. He mentioned all the ways in which up to that point the Government had assisted in this matter of generators for Vietnam. I quote the following passage from Hansard:

My colleague the Minister for External Affairs tells me that arrangements have been made for these generators-

Mr Hasluck:

– A request has been made to the Army.

Mr HAROLD HOLT:
LP

– Yes. A request has been made to the Army that these generators be carried with other stores that are going to Vietnam.

Mr Whitlam:

– When will they leave?

Mr HAROLD HOLT:

– On the ‘Jeparit’ we hope.

Apparently this principle which the Government has now chosen to announce, namely that private bodies that have collected goods to send overseas in aid have to go the second mile, and which it is applying to powdered milk for India, will not apply to this most recent case of generators for Vietnam. Where is the consistency in the attitude of the Government on this matter? Is this another example of the Government’s discriminating between Vietnam and India? We believe there is evidence to indicate that for quite a long time the Government has put Vietnam well ahead of India and that it is not taking very seriously the important job of aiding India in the problems that that country faces.

But apart from these overall principles and the conflicts and differences of interest between the attitude of the Minister for External Affairs and the Minister for Defence on one hand and the Prime Minister on the other, are we to understand that the Government has refused to give assistance to the milk for India campaign? Has the Government refused to give assistance by helping to pay the freight on the many tins of powdered milk which, if it gets to India quickly, will no doubt save hundreds of lives in that country? Is that the meaning of the reply given by the Minister for External Affairs on 14th March or is it not? I hope that the Government will not long delay giving a final and clear decision in this matter. 1 hope that it will not refuse to do as it has been asked to do. It has been prepared this week to assist in the transport of some generators to South Vietnam and I hope that it will be prepared in this same week also to assist in transporting powdered milk to India to save lives in that country.

Mr SPEAKER:

-Order! The honourable member’s time has expired.

Mr WENTWORTH:
Mackellar

Mr Speaker, I am unable to support the remarks made by the honourable member for Dawson (Dr Patterson) about agricultural leases in the Northern Territory. I have thought for a long time that the fact that leases are not available for agricultural purposes is an impediment to development in the north. I do not condemn the attitude of the Minister for Territories (Mr Barnes) towards the pioneering work that may be done by overseas capital that comes into the Territory. Pioneering work may be accepted, but I suggest to him that the time has come for some re-appraisement of our land policy in the Territory with respect to overseas ownership. I believe that the time has come for the Parliament to look at this matter seriously.

I am speaking particularly of the Northern Territory, where this Parliament has legislative responsibility. The Parliament has perhaps delegated that responsibility in a minor way to the Legislative Council for the Northern Territory. Nevertheless, it is still Commonwealth territory. I would not like it to be thought that what I am saying should not apply also to Queensland and Western Australia. They also have a responsibility in matters such as these. However, the situation in those States is not our business. Perhaps I should correct myself and say that it is not so directly our business as is the situation in the Northern Territory. I believe that too much of the wet north is now passing into foreign control. The process has been fairly rapid in the Northern Territory and it has been very rapid in the Cape York Peninsula area of Queensland. I suppose that something like one-third of the available wet land has already passed into overseas ownership. This is a large proportion. If the process would stop there, perhaps this would not be so bad. But there is no sign that the process will stop there.

I do not believe that we should blame only the parliament for what has happened. Nor do I consider that we should in any way blame the overseas investors. They are looking after their own interests. Good luck to them. I believe that we should to some extent blame the lack of perceptiveness in Australian investors and their lack of the will to seize opportunities. We are told that we are a gambling nation. But unfortunately we do not gamble where we should - on our natural resources. We siphon off all our gambling instincts into the futilities of poker machines and horse races. It would be better if there were in the commercial community a little more sense of adventure and a little more readiness to gamble on the great opportunities in the north.

It may well be that when foreign interests are pioneering, whether it be in the raising of cattle or the growing of rice or cotton, those pioneers, bringing with them valuable experience, as they do, should get the inside running in some way, because this pioneering is to the advantage of our economy. But it is not to the advantage of our economy that those who are not pioneering should go carpet-bagging, as they are now, and buy up for a fraction Australian assets that i shall have to pay off in terms if dividends and profits transmitted to overseas investors. If I may digress for a moment, I point out that only today I noticed in the Press a report that there is to be a float of capital by Hamersley Holdings Ltd, which is interested in iron ore in Western Australia. Fifty cent shares are to be sold, I understand, at a $2 premium. This means, in point of fact, that we are paying tribute to overseas investors on our own assets. Frankly, 1 think it is not good enough.

I know that this is a complicated problem. 1 do not want to suggest that every overseas investment is wrong. Indeed, I would say that if it is a pioneering investment the overseas investment is very much to be welcomed. But it is quite different if overseas investors are buying up for future development large tracts of country which they will develop, not as pioneers, but as people taking advantage of experience which has already been obtained and which to some extent has been given from Government sources. I do not want to suggest any easy remedy, but I think that perhaps this House might have to think at some time in terms of a land tax levied only on those interests which cannot satisfy the Commissioner of Taxation that they are properly in the full sense Australian interests - not dummy companies but Australian interests owned in Australia. We can surely find some ways and means of protecting the proper Australian equity, yet at the same time not keeping out the foreign investor who is a pioneer, who is bringing to Australia techniques which are to the advantage of our own production.

We now know that there is in the north a bonanza available by the use of Townsville lucerne and other techniques in the wet monsoonal area. It looks a small part of Australia on the map and it is only a small fraction of our territory but it is, I think, larger than the whole of New South Wales. I refer not to the wet north of the Northern Territory only, but to the wet north of the Northern Territory, Queensland and Western Australia combined. This small fraction on the map is in total, I think, larger than the whole area of New South Wales. This is a tremendous natural resource. This is something which can make the Australian people rich. Do not let us give it away for peanuts. Do not let us sell our birthright for a mess of pottage. Again I say that the Government is justified in encouraging the foreign investor who is a pioneer and who brings to us techniques which we would not otherwise get and which are of value to the whole Australian economy. I am sorry to have been so discursive but I think that the House at some stage may have to think in terms of a new land policy.

Mr JAMES:
Hunter

– It is somewhat surprising and gratifying to hear the honourable member for Mackellar (Mr Wentworth) coming a little towards Labor policy which the Australian Labor Party has been propounding in this House for some years now in relation to the gradual takeover of Australia by foreign investors. I do not hesitate to pay tribute to the honourable member for Mackellar. I think it is the persistent raising of this matter by the Labor Party that has had an effect upon him and caused him to make the remarks he has just made to the Parliament.

Mr Speaker, it is my intention in the short time available to me to give a shining example of the bitter in-fighting that is going on between members of the Liberal Party and the Australian Country Party, particularly in the State of New South Wales, and it is my desire to inform the House of the contents of a letter written by a member of the Liberal Party in New South Wales quite recently to the Premier, Mr Askin. The letter is as follows:

Parliament House, Sydney. 9th February 1967.

The. Hon. R. W. Askin, M.L.A., Premier of New South Wales, SYDNEY.

Dear Bob,

You will recall that on a number of occasions you have stated that before the Minister for Agriculture, Mr. Chaffey, went to the Agricultural Council the members of the Party would be given an opportunity to express their views on margarine quotas. You also stated that Mr. Chaffey would go to the Agricultural Council armed with the expressions of the members.

Yesterday when the Party met you mentioned that there were a number of important matters to be discussed, for example, the question of margarine and chemists. On three occasions you mentioned this, and always in that order.

You will also recall that at approximately midday you left the chair when the Deputy Premier, Mr. Cutler, occupied the chair.

At the conclusion of Mr. McCaw’s remarks concerning his proposed bill, Mr. Cutler called on Mr. Jago to discuss the matter of chemists and regulations appertaining thereto, lt was thus at approximately 12.45, when most of the members had left, that Mr. Cutler called on Mr. Chaffey to open discussions on margarine quotas. You will, of course, realise that in a quarter of an hour no proper discussion could take place on such an important subject.

You will also see from the foregoing that the order of discussion, which you had outlined, was changed by Mr. Cutler. I do not think this was an accident.

The discussion initiated by Mr. Chaffey consisted of words from him and cross-questioning by me, with a few words from Mr. Cross.

The discussion, if 1 may say so, was closed very rapidly at that point by Mr. Cutler.

During Mr. Chaffey’s comments he contemptuously made this statement - “During November, December and January, Marrickville Margarine produced only 336 tons of margarine and, in fact, in January they produced only 7.9 tons. I leave it to your imagination as to whether they are deliberately withholding stocks from the shops to create a shortage of margarine.”

At the conclusion of the meeting I rang Marrickville Margarine and asked if this was in fact so. The reply I received was: “Yes, it is, and this is the reason - since we were reduced to our quota tonnage on 10th November 1966 and up to 3rd February our Company has produced 320 tons of table margarine. During that period from 22nd December until 18th February the factories were closed down for anual leave and maintenance.”

During the early afternoon I rang you and was informed that you were not in your office. 1 left a message for your staff to ring me when you returned, but although I waited until five o’clock no call came from your office to me. 1 also rang Mr. Chaffey and I said to him: “ During this morning’s meeting you made certain allegations about the tonnage produced by Marrickville Margarine. Do you know the reason for this small production?” to which Mr. Chaffey replied: “Oh, I suppose it was because of the Christmas shutdown.” 1 said to Mr. Chaffey: “ Why aren’t you honest with the members of the Party? Why didn’t you tell them this? “ He said, “ Oh, if there had been a long discussion this would probably have come out.” I put it to you Bob–

He is addressing his Premier - that this would never have come out because no one was aware of the answer to this allegation.

Now, you know that I have supported you to the utmost all my days in Parliament, but I cannot accept what Mr. Chaffey has done to this Company.

The next two lines I will omit, Mr Speaker, because they make reference to the social habits of Mr Chaffey. The letter continues:

Furthermore he has allowed his close friendship with Mr Harry Richardson of Vegetable Oils to dominate his thinking in respect of Marrickville Margarine. The time has come, with respect, when I say Mr Chaffey should be dismissed from his office as Minister for Agriculture.

I do not propose any longer to allow this man to control my actions in relation to margarine quotas. Therefore I ask that you take action before he leaves for the Agricultural Council to say to him that the elimination of quotas on table margarine produced from all Australian edible oil foods will be approved.

Yesterday afternoon I received a Press statement issued from your office in which it was stated that Cabinet had given consideration and expressed its views in respect to margarine quotas. Wilh respect, I say to you that no member of the Party knows these views, and this is a direct contradication to the statements you have previously made in respect to this matter.

I will be glad to discuss this matter further with you for I intend, if satisfaction is not given, to take any steps I consider to be right and proper to expose Mr Chaffey and his handling of this margarine issue. I do not want to do this. I do not want to hurt you or the Government, but 1 cannot tolerate this man’s attitude any longer. 1 do trust you will read this letter in the belief that I am acting in accordance with my principles of free interprise. 1 am concerned that justice should be done, and would point out that at the last meeting of the Agricultural Council Minister after Minister from State after State said that if there were to be any increased quotas then, in their opinion, Marrickville Margarine should not share in any such increase. To this Mr Chaffey subscribed- and this is directly opposed to what you have publicly stated- there shall be no vindictive attitude adopted against this company.

I can assure you Bob that in writing this letter I have only the welfare of this Party at heart for I believe sincerely that the great mass of people in this State, and in particular those in the metropolitan area, want to be able to buy whatever brand of margarine they desire.

With kind personal regards, Yours sincerely, Bernard S. L. Deane, M.L.A. for Hawkesbury

So the cat is out of the bag. We have all seen this continual infighting between the Liberal Party and the Country Party resulting from the illegal marriage of the two. We have heard repeated disclosures in this House by the honourable member for Grayndler (Mr Daly) about the great injustice that has been done to Marrickville Margarine, a company that is using wholly Australian products. This company’s grievance screams for redress. Action is urgently required to pull the Liberal and Country Parties into gear in New South Wales and to see that justice flows down like a mighty stream, so that the people who have been harshly treated will get the fair deal to which all Australians claim they are entitled.

Mr UREN:
Reid

– The honourable member for Mackellar (Mr Wentworth) has raised tonight the subject of overseas investment in Australia. We know that there have been rumblings on the Government side about this for quite some time. We know that the Deputy Prime Minister (Mr McEwen) has said that we are selling a little bit of our farm every year and that we are in fact selling out our heritage. We know that the honourable member for Balaclava (Mr Whittorn), the honourable member for Bradfield (Mr Turner) and many others on the Government side have expressed concern about overseas investment in Australia, but we have seen no attempt on the part of those members to ensure that a national outlook is adopted on the question of selling out our heritage.

I raised this matter on 23rd February. I asked the Prime Minister (Mr. Harold Holt):

Will the right honourable gentleman consider setting up a committee, including representatives of both Government parties, the Australian Labor Party, manufacturing and rural industries, the stock exchange and the trade unions, to inquire into all aspects of overseas investment in Australia.

The Prime Minister refused my request. The Government, however, will not consider this because it knows that it might cut off what it looks upon as its lifeblood of reliance on foreign investment. We know that during this Government’s administration it has run up a deficit of some $5,535m. We are indebted to that extent. From 1st January 1950 to 30th June 1966 our deficit with our traditional allies amounted to $4,506m in the case of the United Kingdom and $4,280m in the case of the United States of America. Our total deficit in dealings with those two countries alone was more than £8,700m. Fortunately, we had credit balances with countries like Japan and China leaving us with an overall deficit of approximately$5,500m. The honourable member for Mackellar has not suggested any remedy to rectify this imbalance of trade.

We know that this Government has sold out our heritage. An editorial in the Melbourne ‘Age’ of 14th September 1966 stated under the heading ‘Riches under the Earth’:

How are all these new riches to be developed, in what priorities, and under what kind of control? The time has passed in which they could have been allowed to develop haphazardly.

Of course we know they are being developed haphazardly yet this Government allows our iron ore and other rich mineral deposits to be handed over at bargain basement prices to foreign investors. This applies also to real estate in the cities. I have here an article published in the ‘Australian’ newspaper of 14th October 1966 which stated under the heading ‘Overseas Funds of $131m in Australian Buildings’:

Overseas investors have provided about $64 5m, or about 40% of the funds for major nongovernment buildings erected in Sydney since 1959.

This is almost half of the total- about $131m - invested by these sources in all cities in the same period.

That report came from the Rural Bank of New South Wales. This has been the record of the Government in its dealings with foreign investors. For many years the Australian Labor Party has argued that there should be some plan to control indiscriminate and uncontrolled foreign investment in Australia. We have asked that some conditions should be laid down. The inflow of foreign investment into Australia during the administration of this Government has totalled $5,069m. Some $3,584m was new foreign investment coming in and S 1,450m represented undistributed profits. These undistributed profits were made by the great monopolies and their costs structure was borne by the Australian consumers. These monopolies or oligopolies have been developing their industries at the expense of the Australian taxpayers yet there has been no attempt to control them. This Government has entered into very favourable double taxation agreements particularly with the United States of America and the United Kingdom. Those countries and their investors have been saving a great deal of taxation under these double tax agreements to such an extent that the double tax agreement with the United Kingdom will be reviewed in this House within this session. We hope that this Government will take some action to benefit Australia in the review of the double taxation agreement with Britain.

We hope also that it will take action similar to that mentioned in the recent report of the Vernon Committee of Economic Inquiry. That Committee stated that foreign companies in Canada that did not allow a Canadian equity of at least 25% had less favourable depreciation allowances for plant and equipment than other companies. They also have fewer taxation concessions. No guidance has been given by the Government to foreign-owned companies in Australia to enter the export trade and do something to assist us to solve the problem of our imbalance of trade. No action has been taken in this sphere despite the fact that that problem has existed for sixteen or seventeen years. We have heard the honourable member for Mackellar (Mr Wentworth) and the Deputy Prime Minister (Mr McEwen) speak of the problem of foreign investment in Australia, but they have done nothing about it but utter words. Have they any positive action in mind? If the Government were to suggest positive legislative action to prevent takeovers and the loss of our Australian heritage to overseas investors, we on this side would support it. All that the Government has done so far, however, bas been to utter words. In politics, we need more than words. This Parliament is the place where legislative action should be taken. Legislative power to control and plan the future of the country is in the bands of the Government.

We know that great difficulties are arising through the imbalance of payments. We live in an affluent society. The trade deficit, including the cost of invisibles, at the moment is running at the rate of something like $500m a year. It seems to me that the Government’s policy is to allow an inflow of foreign investment so as to close this gap. There has been no planning of imports, nor has there been any real effort to build up exports. There has been no attempt to guide the people’s money into governmental development of the mineral assets that exist throughout Australia. We know that there are problems of State boundaries involved here, but we know also that great mineral deposits have been found in the Northern Territory and they could be developed by the Commonwealth. However, the initiative has not been taken by the Government and the honourable member for Mackellar and all other honourable members on the other side stand condemned.

Mr SPEAKER:

-Order! The honourable member’s time has expired.

Question resolved in the affirmative.

House adjourned at 11.48 p.m. unto Tuesday, 4 April at 2.30 p.m.

page 830

ANSWERS TO QUESTIONS UPON NOTICE

The following answers to questions upon notice were circulated:

National Service Training (Question No. 20)

Mr Webb:
STIRLING, WESTERN AUSTRALIA

asked the Minister for Labour and National Service, upon notice:

  1. Was a request made at a recent meeting of Commonwealth and State Ministers that police be exempt from national service?
  2. If so, what was the decision?
Mr Bury:
Minister for Labour and National Service · WENTWORTH, NEW SOUTH WALES · LP

– The answers to the honourable member’s questions are as follows:

  1. Yes, at the Premier’s Conference in June 1966.
  2. The whole matter has been given further consideration as the Prime Minister promised at that Conference. The Government can find no new factors to cause it to depart from the existing policy that liability for service should be universal and of not granting exemption to anyone on the grounds of occupation or industry, other than the long established principle of exempting those dedicated to the religious life.

Civil Aviation

Question No. 69)

Mr Devine:
EAST SYDNEY, NEW SOUTH WALES

asked the Minister for Civil Aviation, upon notice:

  1. Did an Ansett-A.N.A. Viscount aircraft, because of an uncontrollable engine fire, make an emergency landing at Mangalore on 4th August 1965?
  2. If so, what engine modifications involving the fitting of higher capacity type bearings have been carried out on all engines?
  3. How many aircraft are currently flying with unmodified engines?
  4. Following the finding of metal in the oil fillers in Viscount aircraft, how often has investigation revealed defective second stage compressor bearings?
  5. Has the maintenance of Fokker Friendship F27 engines since the Mangalore accident revealed compressor bearing failures in any of these aircraft .
Mr Swartz:
Minister for Civil Aviation · DARLING DOWNS, QUEENSLAND · LP

– The answers to the honourable member’s questions are as follows:

  1. Yes. The aircraft concerned was Viscount VH-BMJ. The fire developed following a rear compressor bearing failure in No. 1 engine.
  2. Higher capacity type rear compressor bearings to Rolls Royce Modification No. 1196 are being fitted to all Dart engines used in

Viscount 810 series and Fokker F27 Mark 2 aircraft as the engines undergo overhaul or major repair.

  1. Over two-thirds of the affected engines owned by Australian operators have now been modified, leaving approximately 30 unmodified engines still in service. Special precautions were taken to ensure that the safety of aircraft was not affected by the operation of the unmodified engines.
  2. Safe operations of aircraft fitted with unmodified engines is assured by frequent mandatory inspection of the rear compressor bearing scavenge fillers which have all been fitted with magnetic particle detectors to ensure the effectiveness of this inspection. The inspections are carried out daily except in special circumstances when a maximum of fifteen hours flying time between inspections is allowed. Since the introduction of these inspections, live incipient failures of bearings have been detected at a very earlystage, all being found from traces of metal appearing in the scavenge oil filters.
  3. Yes. Of the five previously mentioned incipient bearing failures, three occurred in engines fitted to Fokker F27 Mark 2 aircraft.

Civil Aviation (Question No. 70)

Mr Devine:

asked the Minister for Civil Aviation, upon notice:

  1. Is it a fact that there is still no Ansett-A.N.A. engineer at Mount Isa and only one based at Canberra?
  2. If so, and as a result, is there no engineer on duty to service aircraft stopping overnight at these places?
  3. Does the ‘Overnight Intransit Inspection’ of Viscount engines call for a check of gear box and engine oil tank level, the latter to be carried out as soon as possible after engine shut down?
  4. Is it possible, especially in the case of Mount Isa where overnight stops are preceded by a flying stage of considerable length, for an excessive oil consumption or an oil leak to go undetected and thereby cause an otherwise avoidable accident?
Mr Swartz:
LP

– The answers to the honourable member’s questions are as follows:

  1. Yes. There is no Ansett-A.N.A. engineer based at Mount Isa and only one based at Canberra.
  2. Normally there is no engineer on duty to perform the servicing of aircraft stopping overnight at Mount Isa or Canberra, the engineer at Canberra being off duty at night.

Under these circumstances the pilot performs a pre-flight inspection in accordance with procedures specified in the company’s operations manual. This inspection includes a check of the aircraft for evidence of oil leaks.

Should maintenance beyond the capacity of the pilot be required at Mount Isa, the maintenance facilities of Trans-Australia Airlines at that base are utilised. In similar circumstances at Canberra, the company engineer would normally be brought back on duty.

An overnight intransit inspection would not normally be required at these locations as a maximum period of forty-eight hours is permitted between such inspections.

  1. Yes. The overnight intransit inspection does call for a check of the gear box and engine oil tank contents, the latter to be carried out as soon as possible after engine shut-down.
  2. It is most unlikely that an excessive oil leak would go undetected during a pre-flight inspection.

Warning lights are provided in the cockpit to give an indication of low oil pressure in any engine or gear box of the aircraft. Gauges are also provided to indicate the oil pressure of each engine. In the event of excessive oil consumption or oil leakage, these provisions should give sufficient warning to enable the particular engine to be shut down without serious consequences.

Telephone Services (Question No. Ill)

Mr King:
WIMMERA, VICTORIA

asked the Postmaster-General, upon notice:

  1. Can he say how many telephone subscribers were receiving automatic service in each State at 30 June 1966?
  2. If so, how many of these subscribers in each State were in the (a) metropolitan and (b) rural areas?
  3. How many subscribers were still using manual or semi-automatic telephones in the various States in the (a) metropolitan and (b) rural areas?
Mr Hulme:
LP

– The answers to the honourable member’s questions are as follows:

Postal Services: Newspapers (Question No. 117)

Mr Luchetti:

asked the PostmasterGeneral, upon notice:

  1. How many newspapers were registered al the General Post Office for transmission by post as a newspaper in each State and Territory in each of the years 1926, 1946 and 1966?
  2. Of the total numbers registered in each year how many were (a) provincial papers, (b) weekly publications and (c) free papers?
Mr Hulme:
LP

– The answers to the honourable member’s questions are as follows:

  1. The number of newspapers registered at the General Post Office for transmission by post as a newspaper in each State in each of the years 1926, 1946 and 1966 is as follows:

    1. Number of weekly newspapers included in (1):

Cite as: Australia, House of Representatives, Debates, 16 March 1967, viewed 6 July 2017, <http://historichansard.net/hofreps/1967/19670316_reps_26_hor54/>.