House of Representatives
26 October 1967

26th Parliament · 1st Session

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

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Mr TURNER presented a petition from certain citizens of Australia praying that the Australian Government set 1% of the gross national product as a target for the annual allocation of aid to the developing countries.

Petition received and read.

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– I address my question to the Minister for Health. Has the Minister’s attention been drawn to a newspaper report of an argument between the Victorian Minister for Health and the Hospital Employees Federation which indicates that the Secretary of the No. 2 Branch of the Federation has described some of Victoria’s private hospitals as death houses’ and ‘fire traps’? In view of the fact that money in the form of Commonwealth benefits is paid to some of these hospitals, is the Minister satisfied that the nursing and medical care provided is of a proper standard? Will he also indicate what machinery exists in the Department of Health to enforce satisfactory standards?

Minister for Health · BARKER, SOUTH AUSTRALIA · LP

– 1 have seen newspaper reports on this matter. Indeed, I took the opportunity of the presence of the Victorian Minister for Health in Canberra yesterday to discuss it with him. He informed me that this is a matter for which the Victorian Government takes full responsibility. My Department is satisfied that benefits are being appropriately paid in respect of the institutions for which they are intended.

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– My question is directed to the Treasurer and is complementary to a question asked recently by the honourable member for Ballaarat and directed to the Prime Minister owing to the fact that the Treasurer was away from the country. I ask: Is it intended that the incentive to seek export sales now given by means of a remission of payroll tax will be continued at least at the present level of effectiveness when the present legislation ends next June? Can the Treasurer assure exporters that they can continue to cost tenders for overseas contracts at least on the same terms as far as this incentive is concerned?


– The question of payroll tax incentive is now before Cabinet on a submission prepared by the Minister for Trade and Industry and myself. A decision will be announced as soon as Cabinet has decided what has to be done. I cannot give any assurances to the honourable member until Cabinet has made the decision. However, he can be certain that the assurance given by the Prime Minister in this House that incentives will be continued will in fact be put into the law.

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– I direct my question to the Minister for Territories. I ask: Has a report of an interview by Ian Moffit with a public servant in the Native Welfare Branch of the Northern Territory who is at present on leave in Sydney, come to his notice? Is it a fact, as stated by the public servant in the interview, that he was removed as native welfare officer at Wave Hill because he was sympathetic to the Aboriginals who were on strike and are now encamped on the Gurindji tribal grounds at Wattie Creek? Is it a fact that it is the policy of the Native Welfare Branch and other branches under the Minister’s control to force these Aboriginals off their tribal grounds? Would the Minister appoint an all-party committee to investigate the grievance of the Gurindji tribe and allow members to visit the area so that they can make a fair assessment of the conditions under which this tribe is living?

Minister for Territories · MCPHERSON, QUEENSLAND · CP

– I am perfectly aware of the honourable member’s interest in the matter of Wave Hill because I understand he is an associate of Mr Frank Hardy who, in my opinion, has made every endeavour to stir up this trouble. Several members in this House who have quite an understanding of this Aboriginal situation have made remarks on the subject. One of the problems that exist in the Aboriginal situation is that we have a political group in Australia which makes every endeavour to use Aboriginals not for their own good but for political purposes. This is something that I am not going to accept as far as the Northern Territory is concerned because there the Commonwealth is responsible for administering Aboriginal affairs. The Government is making every endeavour to advance the Aboriginals and is meeting with very considerable success.

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– My question is directed to the Minister for Social Services. I ask: Did the Opposition, by holding up the Aged Persons Homes Bill from 5th April when it was first presented until this month, rob hundreds of aged people of homes that would otherwise have been built by now?

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

– I thank the honourable member for Barton for this question because it is true that many councils throughout Australia have expressed an interest in receiving subsidy assistance on the same lines as charitable and religious organisations receive it under the Aged Persons Homes Act. As a result of the passing of this legislation, there is no doubt that many local government bodies will be able to take advantage of the subsidy assistance. It is true, as the honourable member has suggested, that many people in Australia have been denied benefits that would otherwise have accrued to them because of the action taken by the Opposition.


– I ask the Minister for Social Services whether it is not equally true that the Government, by delaying until this late period the introduction of this legislation, for years has deprived the aged people of this country of the necessary accommodation that they should have received in any community that calls itself Christian or humane?


– It is interesting to note the concern of the honourable member, who has been one of those responsible for the delay of over 6 months in the passing of this legislation. As every honourable member is aware there has been a tremendous benefit to aged people in the Australian community as a result of the subsidy introduced by this Government. This subsidy was introduced in 1954. It has been progressively extended and many organisations throughout Australia have taken advantage of it. Any delay in the introduction of the extended benefit is, without doubt, directly related to the Opposition and to its failure to accept the advantages of extending this subsidy to local government bodies.

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– I refer to the Treasurer’s announcement yesterday in relation to Commonwealth aid for the drought affected States of Victoria and South Australia. As there appears to be some dissatisfaction on the one hand and confusion on the other as to the amounts that will be allocated immediately and the estimated total that each State will receive, can the Minister clarify the position by stating what money will be made available immediately? Will the $15m mentioned be the total amount allocated to the States, particularly if the need is found to be greater?


– There has been, it is true, some misunderstanding in some sections of the Press, though not all. If the honourable member looks at the reports in the ‘Age’, the Melbourne ‘Sun’, and the Financial Review’ he will see . accurately reported what I said. In fact, what I said was that the Commonwealth Government had agreed to make initial amounts of $lm available to each of the Governments of South Australia and Victoria and that the Commonweatlh Government had estimated that the amount that probably would be involved this year was something of the order of $15m for the two States. If that amount is not sufficient, then representations can be made to the Commonwealth Government, which will consider such representations on exactly the same basis as the requests now made by the two State Governments.

I also point out that it has been agreed that towards the end of the year the Commonwealth again will consider the matter in conjunction with the two State Governments in order to determine whether or not the payments are to be continued into the subsequent financial year, 1968-69. Also if it were found that the appropriation of $15m was not sufficient, then the Commonwealth Government would have to look at the matter in order to ensure that its policy is, in fact, carried out. I make only one other comment: The attitude of the Commonwealth Government is shown by what has been done in the case of Queensland and New South Wales. Over $43m has been appropriated to those Slate Governments for drought relief and other purposes. The Commonwealth Government will approach the problem confronting Victoria and South Australia in exactly the same way.

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– I ask the Prime Minister whether he made a statement in Adelaide recently intended to reaffirm the Government’s present tariff policy? If so, what policy was he reaffirming? Was it the policy that the Tariff Board referred to in its Annual Report’ as neither being possible nor appropriate in the 1960s?

Prime Minister · HIGGINS, VICTORIA · LP

– I was speaking at a dinner held in Adelaide under the auspices of the Chamber of Manufactures. It was a very representative gathering of some 700 people from various walks of life in South Australia. In the course of my speech I said that in my view, such was the need in Australia for a steady expansion of manufacturing industry in order that we could absorb the growing work force, particularly that addition to it which came to us from migration, that I did not see any need for a fundamental change in the policy of encouraging Australian industry under adequate tariff protection. The basis on which adequate tariff protection is given is that the Tariff Board recommends a tariff rate which it believes to be necessary to sustain economic and efficient Australian industry. That broad phrase has, I think, been taken as the guide line by the Board and by the Government now for a considerable period of years. For the reasons I have outlined, we see no occasion to change that basic approach. I would be very interested to learn whether honourable gentlemen opposite disagree with that as the fundamental approach of tariff making in this country.

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– My question is addressed to the Minister for External Affairs. In view of the nature of some of the Press reports about the appointment of an information officer in the Department of External Affairs, will the Minister give the House some particulars of the duties of this officer?

Minister for External Affairs · CURTIN, WESTERN AUSTRALIA · LP

– I am glad to have the opportunity to draw a distinction between the appointment of an information officer in the Department of External Affairs and the custom that has grown up of having public relations officers attached to the personal staffs of Ministers and of the Leader of the Opposition. This is a Public Service appointment. It is not an appointment to the personal staff of the Minister for External Affairs and never has been such an appointment. Hence, the selection of the person concerned and all responsibilities of the officer are a matter between the officer and the permanent head of his Department. The Minister for External Affairs does not come into the matter at all. 1 may say that personally I take a rather strict view about the position of public servants, and some may think a rather narrow view. 1 believe that public servants must be protected in the security and independence of their own office and they must be in a position, no matter what political changes may take place in the country, to be able to serve any government with equal integrity. So I have always refrained from doing anything that would make any officer of the Public Service feel either that he was beholden to me as Minister or that he was required to please me as a person rather than carry out his duty to his own permanent head. The information officer in the Department of External Affairs is an experienced and senior officer selected by the head of the Department to do the job. His duty as a member of the Department is to supply information according to the instructions of the permanent head of the Department.

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– I ask the Prime Minister whether his attention has been directed to a lengthy report by Mr V. Kharkov, commentator for the official newsagency ‘Tass’, in which he said:

Australia’s decision to increase its contingent in Vietnam was an aggressive action and obviously taken under Washington pressure.

The article went on to say, amongst otherthings

The Australian authorities are responding with amazing readiness to every American escalation in the war.

Armed intervention in Vietnamese affairs by the United Slates and Australia, its accomplice in aggression, leads to growing tensions in South East Asia and throughout the world.


-Order! Is the honourable member quoting from a publication? He may make such reference to a publication as is sufficient to make his question intelligible but he may not make a direct quotation from the publication. If he does so, his question will be out of order.


– I am referring to it, Mr Speaker. It went on to say that the best contribution that this Government could make to stability in South East Asia was not to take any part in the escalation in the war against the Vietnamese people. Has the Prime Minister seen a report of that statement? In view of the fact that the Government considered that petitions to the Governor of Hong Kong signed by Aus.ralian trade unionists were damaging Australia’s image in Asia, does he consider that even more damage is done to our prestige in Asia and throughout the world by the further commitment of Australian troops to Vietnam and his Government’s contribution to the escalation of the war under his irrevocable commitment to go all the way with LBJ?


– I have seen some Press account of the report to which the honourable gentleman has referred. I do not know whether he adopts the comment himself, but from the tone of his remarks I rather suspect that he adopts the comment of this Communist news agency as his own view on the matters under discussion. Many times this Government has publicly made clear why we are participating in the Vietnam conflict. We require no threat from any other Government to induce us to make the kind of contribution which we believe to be within our capacity and which accords with our sense of the importance of the issues that are involved in the Vietnam conflict. Again, we have stated those issues and their importance many times. I would think that there was little need for repetition of them in this place.

They concern not merely the freedom and wellbeing of the people of South Vietnam but also the welfare of the whole of South East Asia and, indeed, ultimately of free peoples wherever they are to be found. The honourable gentleman has asked whether we are damaging Australia’s image in this area of the world. I have travelled round several of the coun tries of the region and I have found that our image is far from being damaged. I believe that Australia is respected and applauded for coming to the aid of those who are under threat and are experiencing actual aggression by Communist forces and who are subjected to terrorism and subversion from the same sources. In the free countries of South East Asia, there is commendation for what Australia is doing. I am sure that the growing co-operation that we are experiencing in the fields of both diplomacy and trade reflects the recognition of the contribution that Australia is making in this conflict.

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– My question, which is addressed to the Minister representing the Minister for Repatriation, concerns representations made to the Government by the Returned Services League of Australia about the inadequacy of existing war pension rates. Wilt the honourable gentleman indicate to the House whether the Government intends to review these pension rates?

Minister for Civil Aviation · DARLING DOWNS, QUEENSLAND · LP

– Over the years, it has been the custom for the Returned Services League and other ex-service organisations, before the end of one financial year, during the preparation of the Budget, to make submissions to the Government for consideration in the next financial year. That was done as usual earlier this year and the submissions made at that time by the RSL and other ex-service organisations were duly considered. Throughout the year, there is a continuing review of repatriation matters. It is customary for any major changes such as changes in basic pension rates to be made in the context of the Budget. I do not doubt that the RSL and other ex-service bodies will make submissions to the Government again before the end of the current financial year. Those submissions will receive the Government’s full consideration in the context of the next Budget.

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– In view of the Treasurer’s obvious interest in Australian tariff policy and his Department’s role in its formulation, are he and his departmental advisers prepared to be counted among the supporters of a tariff policy that the Tariff Board has stated is more than 30 years out of date? Does the right honourable gentleman’s view on this matter differ from that of the Minister for Trade and Industry?


– My attitude to tariffs can be stated quite simply. I agree with the Government’s policy as a whole and I believe that the policies of the Minister for Trade and Industry are correct. For political reasons, altogether too much has been made of an alleged difference between the Minister for Trade and Industry and myself on tariffs. The simple fact is that I have never made a statement on tariffs since I have been Treasurer, and I have never expressed an opinion on tariffs outside the Cabinet room since I have been the Treasurer

Mr Clyde Cameron:

– But the Treasurer does do a bit of whispering.


– That is all right for the honourable member. I have never known anyone who does more whispering behind the back of his Leader than does the honourable member. I have never known anyone - if I can use a dreadful phrase - who sucks up to Liberal members like the honourable member for Hindmarsh does, to the discredit of himself and the dishonour of his own Leader.

Mr Barnard:

– I think the Treasurer is in trouble.


– I do not think I am in trouble. I am a pretty busy person as Treasurer, and I have not read the Tariff Board’s report so I cannot make any comment on it. Nor have I discussed the matter with my Department or received any minute from it, and I do not think I will unless the Minister for Trade and Industry initiates a paper before Cabinet, in which case I would take my part in the discussion in the same way as any other Minister would do. I support the policy of the Cabinet and of the Minister for Trade and Industry to the limit of my capacity. I believe we ought to support efficient and economic industries, and I believe in the independence of the Tariff Board.

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– Has the attention of the Minister for Health been drawn to the reported statement of Sir Leonard Mallen in today’s ‘Canberra Times’ that everyone is worried by the gradual taking over by government of so many facets of medicine? Will the Minister confer with the Minister for the Interior and the Attorney-General with a view to preparing an ordinance of the Australian Capital Territory to provide requirements in relation to the maintenance of professional ethics, the standard hearing aid performance, training of personnel for hearing tests, and the fitting and maintenance of hearing aids so that the development of private clinics of medical specialists, psychologists and audiometrists in the Australian Capital Territory will be encouraged and a lead given to the States in this regard?


– I am afraid that I have not seen any statement by Sir Leonard Mallen, but I will be very glad to look at the interesting suggestion of the honourable member. I know, from past experience, that because the Australian Capital Territory is, in a sense, an island in New South Wales, it is not always practicable to take action in matters of this sort unless similar action is taken in New South Wales as well. I will be glad to look at the situation to see whether it is possible, in this case, to take some action along the lines suggested, more or less to give a lead. -

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Dr J F Cairns:

– I ask the Minister for Trade and Industry a question. Does he agree that the Tariff Board has indicated in its annual report for 1966-67 that what it calls the Government’s traditional guidance is more than 30 years out of date and that, to quote the Board itself, as a result large sections of the tariff which may involve substantial over-protection have not been examined for many years? Does he agree with the Board that there is a need to bring up to date the Government’s traditional guidance? If he does not, will he give the reasons why he does not agree with the Board? If he does agree with it, will he soon make a statement in the House which will bring the Government’s traditional guidance up to date, and will he say whether the Board is equipped to carry out the tasks it has outlined for itself in the 1966-67 report?

Minister for Trade and Industry · MURRAY, VICTORIA · CP

– I made the observations which I thought to be necessary when I tabled the Tariff Board’s report, and I have nothing to add to them. The Tariff

Board has operated for more than 30 years under the general concept that it is invited to conduct an investigation and reach a conclusion as to whether an industry is economic and efficient, and, if it is, to recommend whether and by what means protection should be accorded it. At no time since its inception, and certainly not in its recent annual report, has the Tariff Board suggested that any other limitation should be placed upon its judgment than the simple criterion of its own opinion of economy and efficiency. I have told the House on several occasions that without making a recommendation I have invited the Cabinet to consider whether anything should be added to this general licence to the Board to form its own judgment. On each occasion on which this has been considered the Government has, after a full discussion, reached the conclusion that it was better to leave the Board with the very high degree of freedom and discretion that it possesses.

As to the Board’s intimation in its most recent annual report that it would classify industries into high, low and medium protection groups, I have made no other observation than that it has long been the practice to accord an industry protection only after a very careful and generally quite lengthy and detailed inquiry. I made what I thought was an observation pertinent to this proposal when I said that there could be unexpected repercussions if great care were not taken in classifying industries without thorough inquiry. I had in mind the possible consequence if people drew the conclusion that an industry might get the axe; the consequence for further investment in the industry or the effects on Stock Exchange values of the shares in the industry. I repeat that this is a matter that must be approached with very great care if a quick judgment is to be made rather than a judgment following careful inquiry.

As to the proposal of the Tariff Board that there should be a review of industries in which the protective schedules have not been altered or examined for many years, this is a suggestion that the Board is entitled to make and which, to my knowledge, it has made now for the first time. The Board suggested for review Chapter 84 which covers, so my advisers tell me, the entire regimen of machinery items. I made a general reference of the textile industry to the Tariff Board in 1960, and the report following that reference was made a few weeks ago. Chapter 84, ] am advised, covers a range vastly wider than the textile industry. What I think is the most practical thing to do - this is no change in policy - is to take certain sections of the Chapter which the Tariff Board has referred to and have them examined. If the Tariff Board cares to indicate that in its opinion there is a greater urgency in respect of -some sections than others, I would react to that suggestion.

Apart from the Tariff Board it is within the competence of any interested party which is sufficiently broadly based - I do not mean any Joe Blow down the street but a great organisation - to seek a review of a tariff item or a group of tariff items. Indeed, the Woolgrowers and Graziers . Council has recently asked me to make a reference in respect of agricultural machinery, many items of which have not been reviewed for many years. Following what has been the traditional course, this very interested group of farmers and graziers is entitled to make this request. I have already reacted to the request by signing a reference to the Tariff Board requiring it to conduct an inquiry into the item. This is the picture of the procedures. I frankly see nothing new in the Tariff Board’s proposal. There is nothing novel in it. It is not an innovation.

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– I ask a question of the Minister for Territories supplementary to that asked by the honourable member for Reid. Is the Frank Hardy referred to in the Minister’s earlier answer as an associate of the honourable member for Reid the well-known Communist, and is he the same gentleman who some years ago contested as a Communist candidate an election in the Division of Mackellar against the present member for that division?


– Yes. he is the same gentleman, a recognised Communist and an associate of the honourable member for Reid. He stood against the honourable member for Mackellar as a Communist candidate. There is no doubt about his credentials in this regard.

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– I ask the Prime Minister a question. I refer to the technical report on the effect of nuclear weapons, which has recently been produced in the United Nations. Will the Prime Minister ask the Minister for External Affairs to ensure that full copies of the report are made available to honourable members when the House assembles next Tuesday? In view of the fact that this matter is of far greater importance to the people of Australia than any matter discussed in the House this session, and in view of the urgency of the matter by reason of current United Nation discussions, will the Prime Minister ensure that the House has an opportunity for adequate discussion of the report before Christmas, even if this should involve the recall of the House after the Senate elections?


– I shall be glad to discuss with my colleague, the Minister for Externa] Affairs, the requests made by the honourable gentleman, both in relation to the provision of copies of the report and the further request he has made. I have not had an opportunity to study the report or to assess whether it would justify a resumption of the Parliament in the circumstances indicated by the honourable gentleman, but further consideration can be given to this aspect in the light of my discussions with my colleague.

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– Is the Prime Minister aware that the Director of the Northern Division of the Department of National Development has resigned to accept an appointment overseas because of the Goverment’s apathy and delaying tactics in initiating development of northern areas? Is he aware that Australia is losing a man who is recognised as one of the most highly trained and experienced in the field of animal industry in tropical Australia?

Mr Harold Holt:

– I think this question should properly be addressed to the Minister for National Development.

Minister for National Development · FARRER, NEW SOUTH WALES · LP

– I am very sorry indeed that the honourable member has seen fit to make an attack of this sort on this gentleman who has given valuable service.

It is most unfortunate in view of the circumstances. This gentleman recently suffered a grievous accident in which his son was killed. He has been offered a job in Tanzania at a considerably higher rate of salary than he has been receiving here. He has approached the head of my Department and has said, firstly, that this offers opportunities for him to gain a greater salary and to make a contribution in the field of animal industry and, secondly, he feels that it would be good if he and his family were enabled to go overseas and perhaps overcome some of the sorrow which they sustained in their grievous accident. In these circumstances, naturally, we were only too happy that he was able and prepared to accept this invitation. I am sure that he will do remarkably well, as he has done remarkably well for the Government in his present position.

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– I address a question to the Minister for Trade and Industry. I refer to Britain’s application to join the European Common Market. The right honourable gentleman will recall that when the first application was made the then British Government gave assurances that the position of Commonwealth trade would be considered earnestly and sympathetically. I ask: Do those assurances still stand, particularly in the light of the fact that one is left with the impression from reported statements by the British Prime Minister that it is a case of ‘at any price*?


– Various spokesmen who spoke with authority for the British Government have said that Britain would wish to join the Common Market, but would join only if her own interests and the interests of Commonwealth countries were sufficiently protected. This was a form of words which was used repeatedly and upon which we and other Commonwealth countries put our own evaluation, taking them at what would be their face value. It appears to me now to be quite clear that Britain intends to put varying interpretations on those words, so far as Commonwealth countries are concerned. Firstly, in relation to sugar producing countries of the Commonwealth, and within the terms of the Commonwealth Sugar Agreement which since its inception in 1951 has had a continuing forward duration of 7 years, Britain will at all times be conscious of that contractual obligation to Commonwealth sugar producing countries. Beyond that it appears that Britain is aware, as we are all aware, of the very special dependence of New Zealand on butter as an item of export. But apart from that it appears quite clear to me that neither in respect of any other developed Commonwealth country nor of any other item of trade does Britain intend or expect to gain any greater concession than a phasing out of our preferential position over a period of years. We have no idea what the period of years regarded by Britain as satisfactory would be.

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Mr Clyde Cameron:

– My question is addressed to my good friend the Treasurer. By way of preface I state that yesterday 1 asked a question of him concerning VIP nights, in respect of which he said as part of his reply:

Frequently, too, 1 use VIP flights so that officials can come with me in order that 1 may discuss with them matters that require my immediate attention.

Can the Treasurer tell the House on how many of the 38 occasions on which he flew from Sydney to Canberra or from Canberra to Sydney he was accompanied by officers of the Treasury?


– I cannot give the details and obviously 1 would not be able to do so. However, I can emphasise that whenever I use VIP aircraft I work in them during this time between Sydney and Canberra and between Canberra and Sydney. The reason for this is clear. It has been pointed out in this House that it is not permissible to use classified documents or to open classified documents in public aircraft. I emphasise that on most occasions when I travel in a VIP aircraft I read documents and that if I did not do so I would not be able to get through my work. I regard this as an essential part of being able to do the work of the Treasury. Whenever I feel that it is desirable, I take officials of my Department with me to explain the contents of documents.

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Ministerial Statement

Minister for Defence · Paterson · LP

– by leave - I wish to inform the House of decisions taken by the Govern ment on the appointments of Chairman, Chief s-of -Staff Committee and Chief sofStaff of the Royal Australian Air Force and the Royal Australian Navy to take effect from early next year. Lieutenant General Sir John Wilton was appointed Chairman, Chiefs-of-Staff Committee on 19th May 1966 for a 2 year term. It has been decided to retain the benefit of his extensive knowledge of joint service affairs and lengthy military experience by extending his term for 12 months to 18th May 1969. It has also been’ decided to extend Air Marshal Sir Alister Murdoch’s term as Chief of the Air Staff for 12 months. This will mean that Sir Alister’s appointment will now be for 4 years, terminating on 31st May 1969. The retention of his valued services is highly desirable at this stage of the RAAF’s development.

Vice Admiral Sir Alan McNicoll will retire as Chief of Naval Staff and First Naval Member on reaching the retiring age of 60 on 3rd April 1968. He has given distinguished service to his country and the Navy over a period of 45 years. Vice Admiral McNicoll will be succeeded by Rear Admiral V. A. T. Smith, at present Deputy Chief of Naval Staff. Rear Admiral Smith has also held the appointments of Flag Officer Commanding the Australian Fleet, Second Naval Member and Fourth Naval Member, and is a graduate of the Imperial Defence College. He will be promoted to Vice Admiral on taking up his new appointment on 3rd April 1968.

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Ministerial Statement

Minister for Territories · Mcpherson · CP

– by leave - I wish to tell the House about proposed changes in the constitutional arrangements for Papua and New Guinea arising out of further recommendations of the select committee of the Territory House of Assembly on Constitutional development. The Committee was appointed in May 1965 and has presented three reports. The first informed the House of Assembly of progress then made. I referred to this first report in a statement to the House on 31st March 1966. The second report recommended that the composition of the House of Assembly be altered so that the membership would be increased to 94, the number of open electorates to be increased by 25 and the 10 seats now reserved for non-indigenous candidates to be replaced by 15 new seats restricted to candidates with specified minimum educational qualifications. This report was circulated in the House of Representatives on 20th October 1966. The proposals were accepted by the Commonwealth Government and were put before the Commonwealth Parliament in the form of amendments to the Papua and New Guinea Act which were adopted by the Parliament.

The Committee has now presented its third report to the House of Assembly. This report was unanimously adopted by the House of Assembly on 6th June 1967. The report deals with increased participation by elected members in executive government and copies have been distributed. The recommendations in the report are based upon the proposition, which is stated in paragraph 7, that until the people of the Territory determine their own political and constitutional future the duty and responsibility of administering the Territory rests with the Administrator acting on behalf of the Australian Government. Subject to this, the report recommends that the Administrator’s Council, to be renamed the Administrator’s Executive Council, should be the principal instrument of policy of the executive government of the Territory.

It is not suggested that the formal powers of the new Council should be enlarged. At present the Administrator is required to consult with his Council where this is required by ordinance and he is authorised to consult with his Council in his discretion in other cases. The Administrator is not in either case required to act in accordance with the advice given to him but where a matter is referred to the Council under an ordinance he is required to table reasons in the House of Assembly where the advice given is not accepted. Quite independently of the report of the select committee and following constitutional discussions held in Canberra in April last year, the Administrator has been consulting the Administrator’s Council increasingly. The select committee’s recommendations therefore accord with developments which are now proceeding.

The report recommends that in general membership of the Council should be related to participation in the executive government. The new Council would comprise the Administrator, three official members and seven holders of ministerial office; the Administrator would also have a discretionary power to nominate an additional elected member who is not the holder of a ministerial office. Members of the Council would not publicly oppose policies approved by the Council. The Committee proposes that the seven elected members of the Administrator’s Executive Council holding ministerial office should each be responsible, with the departmental head, for departmental policy and for the overall activities of one of the departments of the Administration. The holders of these ministerial offices, whom the select committee considered should be called ‘Ministers’, would represent the department in the House of Assembly by answering questions, introducing legislation concerning the department and by giving the departmental view on resolutions and motions affecting the department. In the event of a disagreement between the Minister and the departmental head the matter would be referred to the Administrator for decision.

For departments not represented by Ministers the committee considered that a form of junior ministerial office should be created to enable additional elected members to work with the departmental head and to undertake specified work of a ministerial nature. In essence these officers will replace the present parliamentary under-secretaries. The committee considered that the responsibility for nominating the members of the House of Assembly to hold ministerial or junior ministerial office for appointment by the Minister for Territories, should be shared by the House of Assembly and the Administrator. For this purpose it is suggested that a standing committee of five elected members of the House of Assembly should be established which would consult the Administrator and agree upon the list of nominated appointees with him. The Committee would then submit these nominations to the House of Assembly for approval. This procedure would operate also for the termination of appointments and for the filling of casual vacancies.

The other principal recommendations of the report concern the Territory budget. The Committee studied possible methods of giving elected members control over locally raised revenue. It considered the possibility of the House of Assembly becoming responsible for the preparation of a separate budget based on revenue raised in the Territory. It also considered the alternative of members of the House and the Administration being jointly responsible for the formulation of a single budget based upon both internal revenue and the Australian grant. The Committee concluded that a single budget would best serve the ‘ordered development of the Territory at this stage’, with the Administrator’s Executive Council having the ‘final responsibility within the Territory for advising the Administrator on budget policy and planning’. Holders of ministerial offices also should participate more fully in detailed departmental planning and through this would play a greater part in preparing departmental budget estimates. In addition, there would be a budget standing committee comprising five elected members not appointed to office. Members of the House would be able to channel budget proposals through this committee which would refer them to the Administrator’s Executive Council or to the Minister concerned. The Committee would have no executive authority but would make recommendations.

The Government accepts the scheme of administration proposed by the Select Committee. It considers the proposed arrangements appropriate for the present stage of development of the Territory. The changes in the form of executive government represent an important step towards selfgovernment. All the recommendations of the Select Committee are acceptable to the Government with a single exception which is a matter of terminology, not of substance. Since the proposed ministerial officers will not be exercising the full executive responsibility and authority which is the universal characteristic of those who elsewhere are designated ministers, the Government’s view is that it would be misleading to call them ministers’. The adoption of the term could in practice have an effect on the working of the constitutional arrangements so that they would tend to operate in a way contrary to the intentions expressed in the Select Committee’s report, in particular at paragraph 7. It is therefore proposed that instead of the expression ‘minister’ the term ministerial member’ be used. The use of this term is not intended to imply and will not involve any reduction in the responsibility and duties which the Select Committee considered to be appropriate for these ministerial offices. For the same reasons it is proposed that the term ‘assistant ministerial member’ be adopted instead of ‘assistant minister’.

As I have pointed out previously, the basic policy of the Government towards political development in Papua and New Guinea is self-determination. This means that if they wish to do so the people of the Territory are free to terminate their present Territory status. On the other hand, they are free to remain an Australian Territory for as long as they choose. The Government believes that the pace and nature of the changes which should be made at any time should accord with the wishes of the majority of the people of the Territory and that the scheme of government now proposed by the Select Committee does accord with the people’s wishes. The Government has made it clear that it will not be slow to make changes for which there is widespread support. On the other hand, it will not impose changes which the majority of the people do not want. The need for balanced development in each of the political, economic and social spheres is widely recognised in Papua and New Guinea.

Because of the time taken in holding elections, the new House of Assembly will not meet until May or June 1968. Amendments to the Papua and New Guinea Act will be necessary to give effect to the Government’s acceptance of the Select Committee’s recommendations and it is intended to introduce a Bill during the autumn session for this purpose. I present the following papers:

Papua and New Guinea - Constitutional Development - Ministerial Statement, 26 October 1967. House of Assembly - Select Committee - Final Report - and move:

That the House take note of the papers.

Debate (on motion by Mr Barnard) adjourned.

page 2310


Report of Public Accounts Committee


– As Chairman, I present the following report of the Public Accounts Committee:

Ninety-third Report - Expenditure from Advance to the Treasurer Fund.

In approaching its inquiry into the Consolidated Revenue Fund results for 1966- 67, your Committee retained the principle endorsed in recent years of conducting a single inquiry but presenting two separate reports to the Parliament. This Ninetythird Report relates to the twenty-six items under inquiry in respect of which expenditure was incurred from the Advance to the Treasurer.

In assessing the expenditure results of departments your Committee is mindful of the fact that new and changed functions of Government bring new problems. Funds must be provided for new and expanding services as Australia expands and technological changes occur. As a consequence, those responsible for assessing financial needs are perpetually confronted by new concepts, new horizons of administration and new challenges to their ingenuity and skill. In this process your Committee has a significant part to play by examining the bases on which estimates are formulated and by comparing these estimates with the actual expenditure that has occurred. On many occasions your Committee has been able, through this process, to provide helpful guidance and positive assistance to departments in the realistic formulation of their estimates.

During our inquiry this year a number of cases were detected in which, due to clerical errors that had occurred, amounts had been charged to the Advance to the Treasurer without warrant authority. Errors of this nature and the failure to detect them indicate a pressing need for improved supervision of clerical work in the finance areas of the departments concerned.

The evidence taken during the inquiry reflected also a clear need for the central offices of departments to obtain from their regional offices and overseas posts adequate supporting detail to enable reliable judgments to be made regarding expenditure levels in those offices and posts and the validity of draft estimates which they have prepared for inclusion in the Budget and Additional Estimates.

The inquiry also highlighted a need for closer liaison between accounts and finance organisations in departments where these functions operate -independently. Your Committee believes that unless a close relationship exists and adequate and prompt communication is maintained between these organisations, the estimates prepared by the departments concerned must contain large areas of uncertainty. A further unsatisfactory feature revealed in evidence was that in which estimating officers failed, through oversight, to include known requirements in either the original or the Additional Estimates. 1 commend the report to honourable members.

Ordered that the report be printed.

page 2311


Melville Rehabilitation Centre, Western Australia

Minister for Works · Wakefield · LP

– 1 move:

That, in accordance with ‘the provisions of the Public Works Committee Act 1913-1966, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for investigation and report: Proposed rebuilding of Melville Rehabilitation Centre, W.A.

The proposal involves the provision of new accommodation for patients, sisters’ quarters, recreation, dining and kitchen facilities and a combined administration and medical block, all in permanent construction. The estimated cost is $700,000. I table plans of the proposed work.

Question resolved in the -affirmative.

Technical Testing and Laboratory Centre, Garden Island

Minister for Works · Wakefield · LP

– I move:

That, in accordance with the provisions of the Public Works Committee Act 1913-1966, the following proposed work be ‘ referred to the Parliamentary Standing Committee on Public Works for investigation and report: Proposed new technical testing and laboratory centre, Garden Island, N.S.W.

The proposal is to construct a three storey brick and concrete building which will enable several specialised facilities, now accommodated in scattered and generally unsatisfactory buildings, to be concentrated in one area. The estimated cost is $570,000. I table plans of the proposed work.

Question resolved in the affirmative.

page 2312


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

Second Reading

Minister for the Navy · Higginbotham · LP

-I move:

The purpose of this Bill is to correct some unsatisfactory features of section 41 of the Naval Defence Act 1910-1966, so far as it relates to the employment of civil staff in the Department of the Navy. The civil staff involved numbers approximately 7,500, comprising about 2,800 salaried staff and 4,700 wages staff. This staff, which is distinct from the administrative and clerical staff of the Department employed under the Public Service Act, is mostly employed in naval dockyards and other naval establishments, for the most part on professional, technical, skilled and unskilled work relating to the design, construction, maintenance and logistic support of naval ships, aircraft and associated equipment.

There are two main problems arising out of section 41 of the Naval Defence Act as it now stands. In the first place, it requires the regulations to prescribe the periods for which persons are engaged. This is impracticable because the staff is not engaged for specified periods, but is employed either on a permanent basis with a specified retiring age or on a purely temporary basis. Secondly, section 41 requires the regulations to prescribe all conditions of service, although certain conditions are not suitable for prescribing in regulations, being too variable or unpredictable. For example, when a ship is refitting, specific tasks may arise which entail particularly dirty work in very cramped conditions in small compartments. In such cases, unions claim additional rates of, say, 12 to 20c an hour and the management assesses such rates and eventually pays a special rate. Such special allowances arise on the average two or three times a week at each dockyard. It would be administratively impracticable to prescribe these variations in regulations. Similar provisions for determining variable allowances exist in the Public Service Act, which for example empowers the Public Service Board to determine all overseas allowances rather than prescribe them in regulations.

Flexibility in determining conditions of service is essential in administering industrial undertakings such as the naval dockyards in Sydney and Melbourne, so that the ships of the Royal Australian Navy can be kept operational and planned operations and exercises can be carried out according to programme. This flexibility is at present provided by regulation 5 of the Naval Establishments Regulations which provides that the Naval Board may determine conditions of service so long as they are not inconsistent with the regulations. Although this regulation has been in existence for many years, some doubt is now felt as to whether it is legally consistent with the present terms of the Act. The proposed Bill resolves the situation by including in the Act itself power for the Naval Board to determine terms and conditions of service, within, of course, the general administrative instructions governing the conduct of Government business.

The regulations will continue to provide for the discipline of salaried staff and other important features of the existing section 41 are being retained. I refer here to Public Service Board control over the classes of work in which persons can be employed under the Naval Defence Act and to Public Service Board control over the fixing of rates of salary.

The opportunity has been taken to include provision for the preservation of accrued and accruing rights in the occasional case of an officer of the Public Service who transfers to employment under the Naval Defence Act. It will be necessary to validate certain payments of pay and allowances made under the existing section. This will be provided for in a separate Bill to be brought down later, which will also provide for validation of certain payments made to members of the defence force. I commend the Bill to honourable members.

Debate (on motion by Mr Barnard) adjourned.

page 2312


Social Services - Taxation - AboriginalsThe Parliament: Newspaper Report - Voluntary Liquidation of Company - Murray Irrigation Area - AgroMeteorology - Postal Charges - Vietnamese Children

Question proposed:

That grievances be noted.


- Mr Speaker, I bring to the attention of the Parliament a serious and grave human problem that often arises when children are denied benefits under the social services legislation of the Commonwealth. Honourable members will know that when a widow receives a pension certain allowances are paid in respect of her children also. These allowances are stopped when the mother dies, and this leaves the children without an income. Often, they may be left in the care of a neighbour, a friend or a near relative. In New South Wales, however, if they are made wards of the State, they are entitled to the payment of certain State benefits, subject to a means test. The denial of benefits to children unless they are made wards of a State raises an important human problem. I believe that the Parliament ought to be ready and eager to resolve it. Children naturally want to live in the environment that they know. They want to continue to be able to associate with the playmates that they know. They want to remain with relatives, if they have any choice in the matter, and do not wish to become wards of a State. They wish to live the normal sort of life that they were able to live before both their parents were taken from them.

I have particulars of a case with me now, but I shall not mention any names. In 1961, a competent journalist who was paid a high salary and, who with his wife and four sons, lived in a happy home and enjoyed what was by normal standards a high standard of living, was killed in a motor accident. The mother continued to maintain the home and to give the four boys her loving care. Later she became seriously ill and she died this year. At the time of her death, two of the boys were attending primary school and two were attending secondary school. They were quite happy at school and with their neighbours and relatives. The last request of the mother was that the children should be reared by an aunt - her late husband’s sister. The aunt readily accepted this responsibility and took the children into her own household. Added to her own family, they made it a quite substantial household, but it was a happy family. The four orphaned boys were able to continue at their schools and to enjoy the companionship of the school mates that they knew, and this was of great advantage to them since they were without the loving care of their own parents. They were close to the affection of their grandparents, their aunt and the neighbours that they knew so well.

When continuation of the social service allowances that had been paid in respect of the children when the mother was alive was sought, the reply was that in accordance with the social services law of the Commonwealth payments could not be continued, though the ordinary child endowment payments would continue. The aunt who had taken the children into her care has heavy responsibilities of her own in trying to maintain her own family. Yet she was happy to rear the four additional children in comfort in her own household and to try to give them all the opportunities that they would have enjoyed, first, if their father had lived, and secondly, if the mother had survived. But this was not to be. The New South Wales Department of Child Welfare and Social Welfare stated clearly that if the children were made wards of the State, certain payments would be made on their behalf, subject to a means test, to help maintain them. I wrote to the Commonwealth Minister for Social Services (Mr Sinclair), who gave me the correct reply. He stated the law and the conditions that exist at present. 1 raise this matter today not in any spirit of bitterness but to urge some new approach to these problems of child welfare and social welfare, with particular emphasis on social services. Is it good enough that children must be made wards of a State to receive benefits that would be theirs in the normal course? This situation ought to be reviewed. Indeed, I go further and say that the time is long overdue for State legislation on child welfare and social welfare and Commonwealth social services legislation to be merged into a composite scheme so that the prime consideration will be the welfare of our citizens, especially children, rather than the mere observance of State or Commonwealth rules. The wellbeing of citizens, whether young or old, should be the primary consideration in a composite and all embracing social services programme that will protect the interests of everyone and, above all, of parentless children who are entitled to the best opportunities that this country can afford them. Most of us would think that this would be the normal approach. A child with living parents hap opportunities. But an orphan child is denied an income unless it becomes a ward of a State. As a ward, it may be farmed out to someone who may be either a good foster parent or a bad one. The person into whose care the child is given by the State of which it is a ward may shower opportunities on it, but a certain element of risk is involved. If an aunt, carrying out a dead mother’s request to care for orphaned children, is prepared to accept the responsibility, the State Department of Child Welfare and Social Welfare should not hesitate to make any normal payments to the aunt so that she may rear the children properly and give them the opportunities that would have been theirs if their parents had lived.

I raise this matter today in the hope that my remarks will bc noted not only here but also in New South Wales and the States generally. Reform is needed. This situation should be corrected. I can only hope that my remarks today will lead to some sort of dialogue in the consideration of this problem of child welfare and social welfare, based on the existing- social services situation, that will bring about much desired and long overdue reform. I return to the crux of the matter - the welfare of the children. I suggest to the Minister for Social Services, to whom I have written on the subject, as 1 have mentioned, that he might take the matter up with his opposite number in New South Wales and ask for a review. Finally, I urge that the whole question of social service benefits in both the States and the Commonwealth be reviewed at the ministerial level in order to solve problems such as these, for they cause grievous hurt to young and innocent children and deny them opportunities to which they are justly entitled. I rarely speak in the Grievance Debate, but I believe that the matter that I have raised today is of prime importance* I have brought it to the attention of the House and the Minister in an effort to render a service to a deserving group in the community and to rectify a wrong.


- Mr Deputy Speaker, the honourable member for Macquarie (Mr Luchetti) has raised a matter of basic significance. I have no doubt that his submission will be duly considered by the Minister for Social Services (Mr Sinclair). I take the opportunity afforded by the Grievance Debate procedure to raise the subject of the deductibility for income tax purposes of donations made to organisations that undertake voluntary aid activities overseas. I recognise the very creditable achievements of Australia’s official foreign aid assistance. In this field, we now rank second only to France, and our contribution is the equivalent of almost 0.8% of our gross national product. Donations to most nongovernment organisations providing education, health and social welfare services within Australia are allowed by the Commonwealth Government as concessional deductions for income tax purposes. However, donations made by an Australian citizen who wishes to alleviate poverty in, say, Africa or Asia by helping to feed hungry people or by supporting a project aimed at increasing food production, at creating more employment or at extending education, are not allowable as tax deductions. This policy applies to donations to organisations such as the Freedom from Hunger Campaign, Inter-Church Aid, Catholic Overseas Relief, Overseas Service Bureau, Save the Children Fund, Community Aid Abroad and the United Nations Appeal for Children. I believe that many more Australians today are anxious to assist in campaigns against international poverty. They are accustomed to government encouragement of citizen participation in Australian welfare and community service activities by way of income tax concessions. They are puzzled and perturbed to learn that the Commonwealth does not give the same encouragement to overseas aid activities.

The Department of External Affairs has estimated that the total overseas aid contribution by voluntary bodies in 1965-66 amounted to about $6m. This is an estimate, however, as there is no accurate method of determining the actual figure. Member organisations of the Australian Council for Overseas Aid believe that the estimate is excessive. If $6m were contributed and taxation deductions were allowed, the Treasurer (Mr McMahon) has calculated the loss to the revenue as about $2m depending on the income bracket of the donor. I refer members to the Treasurer’s reply to a question I asked him in the House on 9th March. I consider that this calculation is high as most donations come in small amounts from low to medium income groups. About 80% to 90% of all donations to overseas aid activities are understood to be under $2. In other words they would not be eligible for deduction purposes, even if tax exemptions were granted. The Australian Council for Overseas Aid estimates that the outflow of private funds from Australia for foreign aid projects is about $1.8m a year. If this figure is considered by the Government to be inaccurate, then the Government has the responsibility to indicate how its own assessment is determined.

There can be no greater challenge today than the need to bridge the widening gap between the rich and poor nations of the world. Whilst the solution to this problem lies basically in the trade, investment and productivity fields, a more generous aid scheme will help build a better basis of co-operation between Australia and neighbouring countries. The Commonwealth Government’s existing aid contribution of almost 0.8% of our gross national product is an estimable record. This is usefully supplemented by the work of voluntary agencies involving a people -to people nongovernmental commitment, the efficacy of which should not be under-estimated. The work of these agencies should be recognised and encouraged through the positive medium of tax deductions. But what is the effect of tax deductions not being allowed on donations to overseas aid organisations? Firstly, the present disallowance creates the impression that the Government is at least reluctant in its approval of non-government overseas aid activities and, secondly, the amount of aid that might otherwise be available is considerably reduced. Donors with larger incomes, business firms and trusts quite naturally take into account whether or not donations are tax deductible when assisting welfare activities at home and abroad. Many people plan their giving on this basis and tax deductions are a powerful argument for donations. For example, one appeal makes the point that a gift or $200 from a person with a taxable income of $6,000 really only costs the donor $116.

What objections has the Government raised to the extension of this facility? In explaining present policy, the Government has said that donations to support activities within Australia are allowable deductions because the money stays within this country and, in effect, saves the Commonwealth spending more on education and other approved services. The Government has pointed out that Australia accepts responsibility for assisting South East Asian neighbours but that this is met through amounts of aid made available particularly through the agency of the Colombo Plan. However, as overseas aid is accepted as an Australian responsibility, the Government could regard the cost of tax concessions as a charge against its own foreign aid appropriation. This would have the effect of stimulating a greater flow of aid through the non-governmental sector and increasing the total of Australia’s overseas aid without increasing Government contributions to foreign aid if this is, in fact, the Government’s intention.

The Government has indicated that tax concessions would be a direct subsidy to organisations and that . the Government would have no means of ensuring that its contribution by way of tax concessions would be beneficial. But the Commonwealth is able to satisfy itself as to the maximisation of effort when aid is directed through such channels as the Colombo Plan. The objection of the Government on this score can be overcome by establishing standards and criteria for the approval of organisations to whom tax concessions would be granted. The criteria could be established by the Department of External Affairs which could assure itself of the value of the work of the agencies applying for tax concessions, and it would be appropriate for control to be exercised through the Australian Council for Overseas Aid. A number of overseas countries presently operate this facility. The Canadian Government gives tax deductions on donations to overseas aid organisations, but limits the deduction to 10% of the taxpayer’s taxable income. The New Zealand Government similarly makes a tax deduction available to a limit of £NZ25 per taxpayer. The British Government makes tax deductibility possible for taxpayers who enter into a written covenant to make recurrent donations to a given organisation for 7 or more years without power of revocation, and this applies to organisations engaged in welfare work both in Great Britain and overseas. The policy of American tax legislation has been to promote people to people aid at home and abroad. Thus the tax laws have long granted American taxpayers encouragement to make donations for private charitable, educational, cultural, religious and other purposes. 1 believe that these overseas examples manifest the degree to which other countries have sought to stimulate voluntary external aid activity through the granting of taxation concessions. Tax deductibility for donations to voluntary external aid is a practical and constructive concept. The extent of the concessions can be controlled in implementation, and I have no doubt that the granting of this facility would represent a desirable extension of our existing policy. I commend this matter to the Government’s attention.


– During question time this morning I referred to the attitude and action of the Department of Territories in relation to the Gurindji tribe at present stationed at Wattie Creek near Wave Hill. My question was prompted by an article I read in last Saturday’s ‘Australian’ regarding an interview given by Mr Bill Jeffrey, a member of the Native Welfare Branch, in the Northern Territory, to Mr Ian Moffitt. I asked the Minister for Territories (Mr Barnes):

Has a report of an interview by Ian Moffitt with a public servant in the Native Welfare Branch of the Northern Territory who is at present on leave in Sydney come to his notice? Is it a fact, as stated by the public servant in the interview, that he was removed as native welfare officer at Wave Hill because he was sympathetic to the Aboriginals who were on strike and are now encamped on the Gurindji tribal grounds at Wattie Creek?

The Minister gave no reply at all to this section of my question. He did not say what his attitude was. He simply struck out with a charge that a Mr Frank Hardy, because he had a certain background, was involved in this matter and was stirring up the trouble. The Minister gave no constructive answer whatsoever. I asked further:

Is it a fact that it is the policy of the Native Welfare Branch and other branches under his control to force these Aboriginals off their tribal grounds?

Again the Minister made no reply. Again we had nothing but irrelevant charges that the trouble had been stirred up by Mr Frank Hardy and also, of course, by those having the same political leanings as Mr Hardy has. I then asked:

Would the Minister appoint an all party committee to investigate the grievance of the Gurindji tribe and allow members to visit the area so that they can make a fair assessment of conditions in which this tribe is living?

That seemed a pretty rational proposition. I simply wanted an all party committee appointed so that it could get at the truth of the matter, and I wanted facilities provided to allow members to visit the area. Anyone familiar with travel facilities in the Northern Territory knows that if a person manages to get to Wave Hill he must stay there for at least a week, and of course there is no hotel or other place to stay. Unless one has a VIP aircraft, such as those which I know the Minister uses on many occasions, one finds it very difficult to get to the area in question.

Let me say something about this smearing accusation about Mr Frank Hardy. If Mr Hardy has in fact challenged the Government and has unearthed something in this area which does not reflect credit upon the Government, whether he is a Communist or not is quite irrelevant. Of course the Minister arranged for the honourable member for the Northern Territory (Mr Calder), who is a member of the Minister’s own political party, to ask a Dorothy Dix question about Mr Hardy because the Minister wanted to make it known that Mr Hardy is looked upon as a Communist. Of course if the Government can brand a person a Communist that person is considered pretty sinister. The Government never says what kind of Communist a person is, whether he follows the hard line or the soft line or whether he is Peking orientated or Moscow orientated or, in fact, follows an Australian orientated outlook.

Mr Hardy may be, after all, a good Australian. He may have made a worthwhile contribution to the Australian community. Like every other Australian, he has the right of free association, the right of criticism and the right of protest. We all remember that an earlier Liberal-Country Party Government tried to outlaw the Communist Party and failed. Certainly Mr Hardy has the right of free association with other persons in the community. Are the officers of the Australian Broadcasting

Commission to be considered suspect because they associated with Mr Hardy by screening the ‘Yarns of Billy Borker’ on television? Are the persons who collaborated with Mr Hardy in publishing certain books to be considered suspect? Of course such propositions are utterly stupid, but they reflect the mentality of this Minister.

I understand that the public servant Mr Bill Jeffrey has received a ‘please explain’ from the Northern Territory Administration. I understand (hat he has confirmed that what appeared in the article in the Australian’ was correct. I remind the Minister that these grave charges have been made not by Mr Hardy but by Mr Jeffrey, a public servant employed by the Northern Territory Administration. The people of Australia voted overwhelmingly at the recent referendum for a better deal, a fair go, for our Aboriginals. For far too long this minority section of our community has suffered injustice, cruelty and inhuman treatment. Most sane and rational people in Australia want to ensure that the Aboriginals get a better deal. The eyes of the world are upon us. We are being watched particularly by those in the AfroAsian bloc, and we should be trying to win the minds of these people. For far too long we have been fobbed off with the excuse that the Commonwealth has no constitutional power in the matter, but the Minister who is now trying to interject knows that he has had the necessary power for many years. We have had constitutional power to give Aboriginals in the Northern Territory a better deal and a fair go.

What have the Aboriginals done in the case in question? First of all, as employees of a foreign monopoly, Vesteys, they struck for better wages and conditions.

Mr Barnes:

– Organised by-


– Yes, of course, organised by some sinister people! Every group of workers that has ever struck has been organised by some sinister group, we are told. Every trade union that has ever called a strike has been organised by some sinister minority group, according to honourable members opposite. This Minister for Territories, who is living in the Victorian age, should be excluded from the Ministry. He is the greatest blot on the Holt-McEwen Administration. As I was saying, these

Aboriginals struck, and after the wet season they built a village for themselves at Wattie Creek, near Wave Hill. The Wattie Creek area is their traditional dreaming ground. I understand there are cave paintings in the area to show that this is one of their traditional places. They petitioned the Governor-General for 500 square miles of territory so that they could run their own cattle station, but they were refused. They were told that Vesteys have a lease of the land until the year 2004. They were told to get off the property and I believe that the Administration has been trying to force them to leave. Mr Jeffrey stated clearly when he was interviewed that he is on the side of the Aboriginals, whether he is a public servant or not. The article in the Australian’ said, referring to Mr Jeffrey:

He is sick of the sonorous recitation of acts and regulations which paper over glaring injustice to Aboriginals. And so he unleashed a blast yesterday which has been building in him since last year’s historic Wave Hill (Northern Territory) Aboriginal strike - an attack which he hopes will shame Australians who value security above commitment.

That seems a pretty fair and rational attitude resulting from a courageous decision by Mr Jeffrey. But what happened to this public servant? Towards the end of his interview he said:

The Welfare Branch moved me against my will from Wave Hill to another post because 1 was doing what I thought was right.

It is most frustrating to be a public servant in these circumstances, striving and struggling for what is right. Mr Jeffrey clearly states that many regulations are broken by the station owners, but, as he said in his interview:

A Welfare officer might file a report, but once it goes to Darwin that’s it - it disappears.

Any statement made in criticism of the station owners and in favour of the Aboriginals is pigeon-holed as soon as it gets to Darwin. Why is this so? Because the Administration in the Northern Territory is an extension of this Commonwealth Government, which is a sectional government, a government that looks after only the wealthy foreign monopolies and the wealthy section of our community, lt is not concerned about improving the conditions of the Aboriginals. For 16 years it has had the power to do something towards giving Aboriginals a better deal in the Northern Territory, but it has done very little. From one end of. Australia to the other the people have said that they want a better deal for the Aboriginals, and it is about time they got a better deal.


Order! The honourable member’s time has expired.


– I rise to speak in this grievance debate because I am aggrieved by newspaper reports of what was said to have taken place in the party room of the Government Parties yesterday morning. Newspaper reports have contained many references to suggestions that backbenchers in this Parliament are mere rubber stamps. They have said that I was one who spoke against one of my colleagues who advocated certain reforms. This latter statement is utterly untrue. But the suggestion that backbenchers in this Parliament are mere rubber stamps is both untrue and unfair. It is time the nation realised that the expression of comments such as these may well have a personal as well as an official motivation. If any backbencher seeks to tell you that he feels his life has been largely wasted then there is reason to ask why he feels that way. If a member feels that he has failed in this place it may be that it is not just a matter of having failed to reach ministerial rank but of having failed to find and to fulfil the proper role of a backbencher. If he has. not had direct influence on the formation of policy, such a person may well ask whether at least part of the cause is to be found in himself as well as in the system.

I have been here for 4 years and I know no such frustration, although I admit to being cross, even hopping mad at times. I have advocated reforms in the parliamentary system as late as the recent debate on the Estimates, when I pointed to the inadequacy and inefficiency of the debating system as we know it. We know that most matters of importance are largely determined in the caucus or party rooms before we come into the House. But I feel eminently satisfied with the degree to which I personally have been able to influence policy. Let me list one of two things. Because I speak to the electors in my electorate and to the people of Australia generally who have a reason to ask what their representatives can do in this place, I must necessarily be purely personal, if not egoistic. I apologise for that, but no doubt my colleagues on both sides of the Parliament could give similar catalogues. I found in the first year that I was here that, because I had certain experience and had conducted certain research into matters relating to the petroleum industry, I was not only able to speak on this matter to the then Prime Minister, Sir Robert Menzies, but when the important matter of petroleum and crude oil pricing arose, the then Prime Minister invited me into the Cabinet room, giving me H hours there together with his senior colleagues and departmental heads so that I might present what I felt to be the answers to some of the problems confronting the Government. For all this time I was faced with their questions and comments and I believe that I was able to make some little contribution to Government policy.

A little later there was a debate in the Parliament about social services and in the party room one of my colleagues and 1 advocated the granting of a rebate of telephone charges to pensioners. Sir Robert Menzies said that the Cabinet would look into the “suggestion. We were supported by so many of our colleagues that eventually a one-third rebate was granted. When the Government Members Immigration Committee was told by the Minister for Immigration of the intention to change the form of the naturalisation ceremony and to drop the renunciation of former allegiance, we opposed the proposal and advocated the precise wording of the present oath of allegiance. When the new range of benefits was announced for pensioners due to the liberalisation of the means test, I and my colleagues on the Government Members Social Services Committee met. There was some suggestion that medical benefits might not be extended to the new range of pensioners. We got together fourteen or fifteen people to make a deputation to the Government. As a result of this or very much influenced by it the Government adopted a policy which it is hoped will soon be implemented when the medical profession sees fit to accept it.

With regard to the current legislation dealing with offshore petroleum, I, like many of my colleagues, have spent many long hours studying this subject. In fact, 1 deprived myself of the company of my family during most of the last weekend, working on this matter, consulting experts in the field and meeting during the last few days, often until midnight, with my parliamentary colleagues working on the Bill. We have been very busy making suggestions and investigating it with the Minister for National Development (Mr Fairbairn) and his departmental officers. On the subject of providing hearing aids for pensioners - the Bill was recently passed in the House - members of the Government Members Health Committee and the Government Members Social Services Committee met with the Minister for Health (Dr Forbes) not just for half an hour but for hours, discussing implications of the proposal. As a result of our submissions the Minister has kept open the possibilities of reform in terms of the introduction of new methods in the private enterprise approach.

These are a few of the ways in which I believe I have been able to be effective, not just in working at routine tasks as an ombudsman within my electorate but in being able to bring some kind of influence to bear on policy. Yet the Press this morning and at other times has taken up a juvenile attitude of attacking any request made by me and my colleagues for facilities to do the job - facilities that an average business executive needs to carry out his ask. I assert that I need these things and I challenge anybody to disprove it. I demand more adequate facilities, not for myself but to enable me to do my job for my constituents and for the country. Here is one backbencher who certainly will not be frustrated if he is not taken into the Ministry. I am appalled at the burden which our top Ministers carry. I had 30 minutes with the Prime Minister (Mr Harold Holt) a fortnight ago at 9.30 p.m. in order to discuss a vital matter affecting Government policy. I left completely frustrated, but in one way only: I could not see how the Prime Minister, under the present system, can be relieved of the relentless demands that make his eyes red and heavy by that time of night. I see this person carrying a burden that must call for the sacrifice of several years of his life expectancy in the service of the country. What does he get when he asks for a few ordinary facilities to enable him to carry out his duties as a top business executive, such as executive aircraft? There are puerile and unworthy attacks and sneers about his going spearfishing.

On Tuesday night 1 chaired a committee of Government members which two senior Ministers attended. They spent nearly 3 hours with us. We adjourned at 1J.45 p.m. They came to discuss tentative, formative, exploratory matters affecting future Government policy - matters which will have a vita] effect on the future of Australia. Am I frustrated? Yes, because I have only 24 hours in the day and I need 7 hours sleep; because I see so little of my wife and family; because the Press seeks to lampoon and denigrate me and my colleagues as excrescences who are botting on the pensioners. I am frustrated when I hear a senior backbench colleague, a man whom I like and admire for his clear thinking on many issues, yielding to the temptation to express his personal frustration in ways he has done. I am frustrated when I see all the things I would like to do and to read but I do not have the time. I am frustrated that I have precious few facilities to tackle necessary tasks.

But I am not frustrated as a backbencher. I am satisfied to be able to do this job. It is worth while every tune an old person thanks me for what I have been able to do to relieve hardship. This is not something to be looked down on and sneered at as unworthy. This is one of the essential tasks for any honourable member. Sure I have criticisms, and plenty of them, but for me this is an important job. I will not be unduly hurt or depressed if the Prime Minister does not see a place for me in the Ministry in the future. In many ways I will be relieved I know what demands such a task would make. My life is full, effective, interesting, even fascinating, and I completely reject the appellation of a frustrated rubber stamp in the hands of the Executive, because it is not true.


– The matter to which I refer affects about 100 people. I refer to the liquidation of the Berwyn Manufacturing Co. Pty Ltd of Brooklyn, Victoria. The company was associated with a company called Super Krome, which is also in liquidation. I was informed of the liquidation by one of my constituents. After getting in touch with the agents for the liquidator 1 was told that arising out of the liquidation of these companies employees had not been paid wages due to them. I note that in the statement of receipts and disbursements there appears a secured debt to the Commonwealth Trading Bank of $56,542. The money that became available as a result of the voluntary liquidation was $83,511. Bearing this in mind 1 wrote to the Treasurer in the hope that some consideration would be given to the employees to whom wages were owed. I said that in my view first consideration should be given to them. I informed the Treasurer that 100 people were involved and that they were unable to take the matter to the law. 1 believe that 1 did the right thing in taking up this matter on their behalf. Although I wrote to the Treasurer on 2nd August it was not until after repeated representations for some finality to be reached on the matter that I received a reply last week, which was in the negative, of course, over the signature of the Minister for Air (Mr Howson) who is also the Minister assisting the Treasurer. Before I was given an answer by the Minister I received a letter from Messrs Weigall and Crowther, a Melbourne firm of solicitors who were acting on behalf of another of my constituents. He is one of the 100 who had been deprived of wages as a result of the voluntary liquidation of this firm.

The Minister assisting the Treasurer has declined to intervene to obtain the wages that are due to these employees, despite my requests. I do not altogether quarrel with his decision. Under the Australian Capital Territory Companies Ordinance, section 292(b), the payment of wages is a secondary consideration and must take second priority. In Victoria the payment of wages is a fourth priority. There are other things, such as workers’ compensation, the cost of winding up the company and taxes due to the Commonwealth which come before wages, salaries and leave. In replying to my request the Minister referred to section 109 of the Bankruptcy Act which was passed by the Parliament last year and referred also to section 22 IP. of the Income Tax Assessment Act. He said it was this section which provided an overriding priority in bankruptcies and company liquidations for the payment of tax instalment deductions to the Commissioner. He continued:

In these circumstances I think you will agree that the law should not be changed in this respect, and that it would not be proper for me to circumvent the legislation by waiving the taxation priority as an act of grace.

I agree with what the Minister said about the law, but I point out to the House that the Bankruptcy Act 1966 was assented to on 1st June 1966 but . has not yet been proclaimed. It will not be proclaimed until February next year. Nevertheless, the Minister is resting behind this Act, which is not yet law, in saying that he would not intervene in an endeavour to gain from a Commonwealth institution such as the Commonwealth Bank payment from the $56,000 of the amount which is due to the employees as wages. I do not want to enter into a debate on the law as it stands; if I were to do so 1 would probably have some interjections from the honourable member for Moreton (Mr Killen).

Mr Killen:

– Perhaps I could say that the Bankruptcy Rules have not been drafted and that is the holdup.


– Yes, and the Minister is sheltering behind it. This is a grievance of a real kind. In this case 100 people have been denied wages and, probably, superannuation which is due to them. Again I appeal to the Minister to review his decision and to see whether he can get from the coffers of the Commonwealth Bank enough money to pay these people the wages for which they have worked. It is no fault of these people if the company which employed them over-reached itself and got into trouble which resulted in voluntary liquidation. The employees did their work honestly and in good faith. It was a great surprise to them when the company went into liquidation. They had no idea that this was going to occur. If they had known beforehand, probably most of them would have sought other employment and would have received wages for work performed. But they stuck with this company until the axe fell and in return were deprived of their wages.

I ask the Minister for the Interior (Mr Nixon), who is now at the table, to take this matter up with his colleague the Treasurer (Mr McMahon) who is the man who should make the decision, to see whether something can be done for these people, even before the Bankruptcy Act is proclaimed. I ask him to try to induce the Commonwealth Bank and other creditors to take out of the money held by them as agents in the liquidation enough to meet the wages due to these employees. I believe that a terrible injustice has been done. As one who has earned his living by the sweat of his brow and has done an honest job, I am distressed to find that other people in the community, particularly within my electorate where they are mainly working people who are struggling along, have been deprived of their wages by some Act which has not yet been proclaimed. I appeal to the Treasurer to be a little sympathetic to this case and to take some action to ensure that these people are given the wages to which they are entitled.


– 1 should like to draw attention to three matters. These are not necessarily put forward as grievances because in each case I have spoken to the Minister and I believe that in due course the matters will be considered sympathetically. The desperate situation which now exists in the Murray irrigation area is not generally known. This situation has been brought about by drought and has been added to by the fact that when this area was being developed a number of the land holders who had come from Victoria and who had a background in and knowledge of irrigation laid out large areas of land and were able to obtain more water than their present water rights entitle them to. It was natural that they should do this at that time. I do not consider that the Water Conservation and Irrigation Commission, of New South Wales was altogether blameworthy in allowing this situation to develop as plenty of water was available at that time. The rationing of water for irrigation purposes was to have been phased out in about the middle 1970’s, but we have now reached a situation in which the supply of water is simply not there. In a great many cases land holders have used their entire annual entitlement of water under their water rights, despite the fact that the summer has not even begun.

It is not within the province of the Minister for National Development (Mr Fairbairn) to make a decision in this matter, but I have asked him to use bis influence to have more water released for this area. I am sura that he as Chairman of the Murray River Commission will look sympathetically at my request and, if possible, give consideration to releasing from Lake Eucumbene some of the water which is being stored there for hydro-electric purposes. I know that the supply in the lake is very low. Although the amount in reserve should be 1,020,000 acre feet of water, at present only 130,000 acre feet is held. I realise that this is not an easy matter to decide, but I believe that in this case a calculated risk is warranted. The area to which I am referring particularly had virtually no dairying only 10 years ago. Last year the largest co-operative operating in the area, Murray-Goulburn, paid about $2m to dairy farmers for their products. When converted into secondary production this represents a tremendous revenue earning source for Australia. It is not only the dairy farmers who are suffering at the moment but they are the ones who will be suffering to the greatest extent in the immediate future.

Incidentally, although it is possibly too soon to make emphatic statements about the productivity of this area as a dairying centre, the production per cow is right up in the top figures for Australia. But this acute water shortage does not apply only to the dairying area. It applies to many areas which cover a wider field of agricultural and pastoral activity. I know that there is a tremendous problem here.

The second matter that I want to refer to is of a technical nature. I have already spoken to the Minister for the Interior (Mr Nixon), who is at the table, about it. Incidentally, I take this, my first opportunity, to congratulate him on his rise to the Ministry. I am certain that he is a young man from whom we will hear a lot more. This country is very lucky to have this type of young man in Parliament. However, I know that my remarks will not influence him to give more than the normal consideration to what I am about to ask him to do.

I understand that there was a Commonwealth officer at Griffith who was an agrometeorologist. I do not want to give the impression that I am an expert in agrometeorology, but it is merely short term forecasting for intense crop culture. It is practised in many countries and has been found to be of inestimable benefit. I am not quite certain whether this person was an officer of the Commonwealth Scientific and Industrial Research Organisation or of another department, but he was transferred to Canberra. I now ask that very earnest consideration be given to the appointment of a permanent agro-meteorologist at Griffith, not only to offer a service to growers and other interested agriculturalists but to concentrate on determining methods by which such a service could be improved by closely relating meteorological information to the use of agriculture.

The importance of agro-meteorology to farmers - particularly intense farmers - is not generally appreciated or understood. But there seems little doubt from the information that I have been given from very reliable and informed sources that forecasts particularly arranged for agriculture can be greatly improved. This is because more is known about what is required and with various’ satellites now orbiting the earth more precise data of conditions over distant oceans are now available. This information is becoming important now that a greater range of crops - quick growing crops that can be affected by the weather, frost, etc. - are being grown. From what I know has happened in the Griffith district, I feel confident that agro-meteorology forecasts can bring great benefits to farmers and greatly help the general management of farming processes. I am certain that the Minister, who knows the value of science and technology but above all is a man who has applied this knowledge practically, will look at my request sympathetically.

The third matter that I wish to bring to the notice of the House is the new bulk postal charges. These rates are now affecting country newspapers because an article of less than 2i ounces cannot be forwarded at bulk postal rates. This penalises almost all country newspapers except provincial dailies. It is having a very detrimental effect on costs. I think that we should appreciate the role that the country newspapers play in decentralisation. After all, television and radio, of which we all have knowledge and which are part of our way of living, are over and finished following the broadcast but the Press record of what has happened is a permanent record for succeeding generations to see. I pay a great tribute to the standard of journalism in my area. It is extremely free of sensationalism. 1 earnestly ask the Postmaster-General (Mr Hulme) to look at this aspect to see whether something can be done to ease this burden on the country Press.

I want to refer now to what I might describe in moderate terms as the scurrilous attack which the honourable member for Reid (Mr Uren) made on the Minister for Territories (Mr Barries) this morning. As somebody who has grown up, attended school, worked and lived with Aboriginals, I claim to have a fair amount of knowledge of them. I do not think that I would be boasting if I said that I have a far more intimate knowledge of these problems than the honourable member for Reid has or will have. I have not the time to talk about the Wave Hill situation in the Northern Territory in particular but when I was in Katherine during June of this year I talked to a number of individuals and I talked to a number of prominent residents. I believe that the Aboriginals have been led into an entirely wrong situation because a wrong aspect of the problem has been put to them. Tragically, these particular people themselves are the ones who are suffering most. Earnest efforts are being made to lift up the Aboriginal people and it is quite wrong to suggest that this Government is not well aware of this situation.


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


– I wish to make some remarks concerning a petition that I have received from the Australian Committee of Responsibility for Children of Vietnam. This petition is addressed to all Federal members of Parliament. The covering letter with the petition, from a Mrs Margaret Watts, stated:

We feel you will be interested to see that there are people in your area who are concerned about the situation of the innocent children of Vietnam.

I am certain that all honourable members are concerned about this situation. But what concerned me particularly was that when I looked through the list of signatories to the petition, which is appended to the letter that was sent to me, I saw that three people had given their, occupation as member of parliament. They were: L. Cortelle, MHA, 346 Mount Street, Burnie; M. Gleverett, 30 Daymyrne Road, Hobart; and W. R. Whoon, 40 Coomikill Street, Rose Bay, Tasmania. I think it is regrettable that people should give their occupation as member of parliament when in fact none of the three gentlemen whose names are appended is a member of the State Parliament of Tasmania or of the Federal Parliament. I feel that it does the Australian Committee of Responsibility for Children of Vietnam little justice that names such as these, and misinformation, are appended to its petition.

I feel that the petition is well intentioned. It concludes with a recognition of the excellent civilian aid that is already being given in Vietnam by the Government and voluntary assistance’. In the body of the petition reference is made however to burned and injured children. It is stated:

Recently 130 cases were flown to Europe from South Vietnam by ‘Terre des Hommes’-

I believe that this organisation is centred in Switzerland - and we know that among these were thirty burned and injured children, some of whom are still receiving extended plastic surgery in England.

Official records show that two Vietnamese children suffering from body burns entered Britain for plastic surgery for each of the years 1966 and 1967. These burns were not necessarily caused by war injury. Therefore four Vietnamese children went to Britain for treatment. I emphasise again that these burns were not necessarily caused by war injury. I believe it is unfortunate that there has been misrepresentation in various quarters as to this question of burned children. I do not suggest for a moment that the people responsible for the organisation of this petition did this intentionally. However, I think it is unfortunate that in the Australian community efforts are being made to misrepresent the question of burned and injured children in Vietnam.

Reference has already been made in the House to a publication known as ‘Ramparts’. I direct attention to independent surveys made by qualified medical people and in particular to a visit made to Vietnam in March 1967 by Dr Howard Rusk who, as honourable members probably know, is Director of the New York Institute of

Rehabilitation and Professor of Physical Medicine at the New York University. He is one of the leading experts on rehabilitation in the United States. His findings were reported in the ‘New York Times’ of 12th and 19th March. Dr Rusk made an intensive survey of Vietnamese hospitals and personally saw every burn case in the twenty hospitals he visited. In his summary Dr Rusk said:

The picture that has been painted by some in the United States of large numbers of children burned by napalm in Vietnam is grossly exaggerated. The major problems are severe orthopaedic injuries, compound fractures and tha complications of infections.

He added that for every case of burns resulting from war there were scores of cases of burns resulting from gasoline. I mention this because I would not want the people who signed this well worded petition with good intentions to be misled. The petition was organised by such people as Margaret Watts, Gordon Barton, David Duffy, Alan Hamilton, Carol McLean, Dugald McLean and Sheila Rowley. I am sure that some of these names would be known to members of the Parliament.

As I said earlier, I think that honourable members on both sides of the House are concerned with this problem. We should have it examined factually, without misrepresentation and without gross exaggeration such as was done in the publication Ramparts’. Again, I feel it is a matter of regret that three non-existent members of parliament from Tasmania have appended their names to the petition. I do not intend to go through all the occupations. Even if I were to do so I would not be able to assess them properly. Being expert, as it were, in the limited sphere of members of parliament, I am able to recognise the three names on the petition as not being those of members of parliament. As I have said, this is a grave injustice to the cause of responsible people who have signed the petition. I believe that this action has put under a cloud the bona fides of the whole petition and the signatories to it. I have today written a letter to the honorary secretary of the Committee, Mrs Watts, and I hope to have a reply in due course. I have directed her attention particularly to this misrepresentation and I hope by doing so that it will not occur again.


– Of course the honourable member for Denison (Mr Gibson) ignores the fact that children are being burned. He is looking only at the legalistic concept of the situation and the kind of occupation that is put at the end of the document. I want to address myself to the question of the Aboriginal people of the Northern Territory. I rise, as did the honourable member for Reid (Mr Uren) earlier, to speak on behalf of Gurindji tribe in the Northern Territory because their own member does nothing but traduce them and say they are being misled and are subversive. Because they are not being led adequately in this place, other voices have to be raised. The honourable member for Riverina (Mr Armstrong) said a moment ago that he has lived with the Aboriginals and knows some of their problems. It is people such as the honourable member and his colleagues who have created most of the problems.


-Order! It being 12.45 p.m., under standing order 106 I put the question:

That grievances be noted.

Question resolved in affirmative.

page 2324


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

That so much of the Standing Orders be suspended as would prevent Notice No. 1, general business, standing in the name of the honourable member for Bendigo being moved on his behalf by the honourable member for Dawson.

page 2324


Motion to Disallow Regulation


– On behalf of the honourable member for Bendigo (Mr Beaton), I move:

That Regulation No. 45a of the Trade Practices Regulations made under the Trade Practices Act 1965-1967 and contained in Amendment No. 2 in Statutory Rules 1967, No. 125, be disallowed.

The operation of section 106 of the Trade Practices Act 1965-67 was explained by the previous Attorney-General on 8th December 1965. The amendment to section 106, as moved by him, was to allow exemption of specified organisations which carried out responsibilities in connection with the marketing of primary products. In explanation of that clause, when moving an amend ment to it, the then Attorney-General stated:

The proposed new sub-clause is clear in its terms. It seeks to give effect to one of the elements of the scheme as published by my distinguished predecessor, that is, to give exemption to statutory marketing boards. I am sure that the amendment is entirely in accord with the views of the Deputy Leader of the Opposition (Mr Whitlam).

In other words, the explanation given by the then Attorney-General was that the particular section was concerned with giving exemption to statutory marketing boards. The Opposition, when considering this matter, was concerned with certain aspects in relation to the Australian Canners Association. This was because the Association was not a statutory marketing board. However, it seems from the regulations that organisations other than statutory marketing boards can be included in this regulation. Therefore, it would seem that the Australian Canners Association can be included in the Act. On the other hand there is the explanation by the then Attorney-General that the provision applies specifically to statutory marketing boards. As I have pointed out, the Australian Canners Association is not a statutory marketing board. That is the first point.

The second point, and certainly a point more pertinent to the argument, is the fact that one large organisation, the National Association of Retail Grocers of Australia, which purchases very large quantities of canned fruits and distributes them to consumers, contends that certain operations of the Australian Canners Association constitute unfair practices which, in effect, places a burden on or discriminate against independent grocers and consumers and particularly those located in areas outside the metropolitan cities, such as the small country grocer and the consumer who buys from the small country grocer. The National Association of Retail Grocers of Australia claims that the trading terms of the Australian Canners Association, as prescribed in its publication entitled ‘Canned Deciduous Fruits Orderly Marketing and Incentive Discounts’, discriminate against one section of the retailing community and the people who buy those goods. The Association of Retail Grocers says that maximum discounts are available to national chains. Some

Independent group retailers and their wholesale warehouses, which are capable of buying on a much larger scale than the national chains, are unable to avail themselves of the discounts given to the national chains. As an example, the Association of Retail Grocers cites the case of the 4 Square group, operating autonomously in each State - rather than being a national chain - purchasing, say, $400,000 worth of canned fruits for each State. The rate of discount to that group would be 2.9%, but under the arrangements with the national chains the discount for an equivalent amount would be about 5%. The reason is that those who are operating autonomously in each State are unable to aggregate their purchases and consequently their discount is less than the discount offered to one firm which could aggregate its State purchases. This, according to the grocers, is unfair discrimination.

The Opposition wants to make it quite clear that it is not putting forward a brief for the grocers and the consumers, nor is it putting forward any condemnation of the Australian Canners Association; it is simply raising a point because it believes that, if there is any doubt as regards unfair practices, then this doubt should be clarified, not by this Parliament but by the Commissioner who has been appointed specifically for that purpose.

Mr Giles:

– The honourable member believes that there is a doubt?


– A doubt has been raised specifically by the Association of Retail Grocers which is reported to sell over $90m worth of produce a year. That Association has raised the doubt and given specific examples. All the Opposition is asking is that if there is any conflict the Commissioner and his organisation should determine the matter. Otherwise the Australian Canners Association is put on an exempted basis which will cause further conflict with grocers and consumers. On the other hand the Opposition wishes to state that the Australian Canners Association has maintained that its marketing arrangements are not injurious to the public. We accept that statement in the spirit in which it is made. As I emphasised, it is not for the Opposition or myself to question that statement. The Australian Canners Association in fact has forwarded a statement regarding the provisions of its orderly marketing schemes. It states that the products marketed under the orderly marketing scheme comprise peaches, pears, apricots and nurtures of these fruits. Marketing agreements for canned deciduous fruits have operated for many years in Australia. However, as a result of a serious price instability during 1962 and 1963, caused by increased production arising from soldier and closer settlement orchard schemes, a series of industry meetings was held from which the current orderly marketing scheme was evolved. It was considered that stabilised marketing was essential and ‘ the Government, when introducing excise legislation on canned deciduous fruits in late 1963, made a condition of its agreement to the legislation in the following terms: That the industry be informed that, as a condition of Government acceptance of the plan, the Government expected the industry to adopt a rational approach to the domestic marketing of canned deciduous fruits and to continue its promotional activities at home and overseas.

The Australian Canners Association, in its statement, also says that under the current orderly marketing scheme independent retailers are enjoying greater protection from the large national chains than was the case in earlier years when there existed a larger differential between the upper and lower limits of trade discounts. The Australian Canners Association recognises that any marketing scheme requires constant supervision and review and therefore has always been prepared to consider proposals from any retailing interest, including NARGA, many of which interests are already in recognised retail buying groups. The Australian canning industry must maintain a stabilised domestic price structure to continue its present level of operation, for over 70% of annual production is required to be exported. Overseas exchange earnings from these exports exceed $40m per year. The industry’s position is identical with that of dried fruits, sugar, dairy produce and other similar primary industries operating acceptable uniform pricing structures within the Australian market. As a result of the introduction in 1963 of orderly marketing within Australia, backed by an excise charge against canners, it has been possible to extend markets in Europe, Canada and other countries, for the benefit of Australia generally. In fact, there has been a very substantial increase in the production of canned fruits - for example, in 1967 a total of 180,000 tons, which was valued at approximately $ 17.5m.

It is also important to note that the great majority of people concerned in the processing of canned fruit arc co-operatives. Therefore it must be accepted that the principal beneficiaries of the canned fruit industry are primary producers. There is no question at all about that. It must also be accepted that the Australian canned fruit industry is playing a substantial part in the development of this country and is directly responsible for about 5,000 employees. About 3,000 orchardists are involved in supplying the canned fruit organisations with fruit. Therefore we have the two conflicts: A claim made by a responsible Australia wide organisation on behalf of retail grocers and consumers and on the other hand a claim-

Sirring suspended from 1 to 2 p.m.


– Before the suspension of the sitting, I said that the Australian Canners Association is making a valuable contribution to the development of certain areas of Australia, not only by providing employment but also by earning export income and encouraging the development of associated or ancillary industries. The Opposition does not question the importance of the canning industry. The Association has made it clear that the implications of the marketing within Australia of canned deciduous fruits extend far beyond the industry itself. The stabilised marketing of canned deciduous fruits is important for the welfare of many industries. It is important for the welfare of the pineapple industry, which is concentrated principally in my home State, and of the apple and berry industries in Tasmania. Various surveys carried out by the Bureau of Agricultural Economics show that most of the income earned by the berry fruit and other fruit producers in Tasmania is dependent directly on the sale of canned fruits.

It is well known, of course, that the canning industry is one of the biggest users of sugar in Australia. This has . been recognised in the domestic Sugar Agreement between the Commonwealth and the

State of Queensland. The relationship of the canning industry to the sugar industry is established by the machinery of the Fruit Industry Sugar Concession Committee. The maintenance of the present level of production of the canned fruit industry is of particular importance to the sugar industry, and this must be accepted. They are complementary industries. Any reduction in the consumption of canned fruits means a reduction in the use of sugar for canned fruits. On the other hand any increase in the consumption of canned fruits means an increase in the use of sugar. Therefore, the Australian Canners Association has a significant part to play in the development of the sugar industry.

This does not mean that we can ignore completely the claims of the other party to the conflict, the National Association of Retail Grocers of Australia, or of the consumers who buy their canned fruits from retail grocers. However, I emphasise again that the Opposition is not opposed to the operations of the Australian Canners Association; nor does it support or oppose the submission of the National Association of Retail Grocers.

Mr Nixon:

– What does the Opposition do?


– If the Minister wants to speak on this subject, he should do so later.

Mr Nixon:

– The honourable member should tell me what he wants to do.


– Was the Minister not listening before?

Mr SPEAKER (Hon. W. 3. Aston)Order!


– The National Association of Retail Grocers has claimed that the operations of the Australian Canners Association are detrimental to the public interest. The Australian Canners Association has claimed that this is not so. All we say is that if the Act gives total exemption to a body that is not, according to the previous Attorney-General, specified in the Act, surely it is up to the Commissioner of Trade Practices to be the referee and determine whether the Association should be included in or exempted from the provisions of the legislation. Any argument that failure to exempt the Australian Canners Association would cause injury to the sugar industry, the manufacturers of tin plate, cartons and labels, the suppliers of fuel and others associated with the canned fruits industry is completely irrelevant. The Australian Canners Association has said that all its operations are above board and are not in any way injurious to the public interest. Therefore, it is simply a matter of the conflict that exists between the Australian Canners Association and the National Association of Retail Grocers, which has given reasons in support of its claim. The ‘ Australian Canners Association has defended itself, as it has every right to do. The point made by the Opposition simply is that if there is any doubt it should be cleared away not by this Parliament but by the Commissioner of Trade Practices and the organisation specifically appointed for this purpose by the Parliament.

That is the argument we have advanced not only in this House but also in the other place. If there is no justification for the claim of the National Association of Retail Grocers, this would be made clear by the Commissioner of Trade Practices. The Attorney-General (Mr Bowen) should also state clearly whether, in view of the statement made by his predecessor, the Australian Canners Association has the right to be exempted under the regulation. The previous Attorney-General said explicitly that this exemption applies only to statutory marketing boards. The Australian Canners Association is not a marketing board.


– Is the amendment seconded?

Mr Devine:

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

AttorneyGeneral · Parramatta · LP

– The Government opposes the motion to disallow regulation 45a. By this regulation exemption from the provisions of the Trade Practices Act is accorded to any agreements made by or practices of the Australian Canners Association that relate to the marketing of canned deciduous fruits. The regulation is made under the power given by section 106, sub-section (2.) of the Trade Practices Act which provides:

Regulations under this section may provide that all or any of the provisions- of this Act shall not apply to or in relation to all or any agreements made by, or practices of, a specified organisation or body that performs functions in relation to the marketing of primary products.

The first reason for disallowance advanced by the honourable member for Dawson (Dr Patterson) is that when sub-section (2.) of section 106 was introduced into the House - it was introduced by way of amendment of the Act - my predecessor as AttorneyGeneral said it was to enable exemption to be given to statutory marketing boards. We are not concerned here with a statutory marketing board. All this has been clarified and discussed in the Senate, and the honourable member for Dawson, when he makes that comment, knows perfectly well that that was a slip of the tongue and that statutory boards are covered by sections 38 and 39 of the Trade Practices Act. He well knows that the comment was directed to the situation in which bodies were similar in character, like the Australian Dried Fruits Association, and in which, for various reasons, such as the operation of section 92 of the Australian Constitution, the statutes designed to support them had been struck down by the courts, or in which they were supported by governments otherwise than by being made statutory boards. He knows all that. So why he should come forward in this House and repeat this very trivial, argument for disallowance passes my’ understanding: This seems to me to be a somewhat petty activity.

The main reason that the honourable member advances for the disallowance of the regulation is that a claim has been made by the National Association of Retail Grocers of Australia to the effect that the conditions that the Australian Canners Association applies in relation to discounts are contrary to the public interest. He affects to pass no judgment on this claim or, indeed, to consider it at all. He has not told us in any detail what the claim is. This, too, has been discussed and it has been shown in effect that there is no substance in the claim. However, the honourable member advances this as a reason for the substantial step that the Opposition wants to take, namely to remove the benefit of this exemption from a great primary industry. Honourable members opposite are prepared to attack the exemption accorded to this great primary industry for these flimsy reasons. It is rather surprising to find the honourable member for Dawson launching this kind of attack on the canners organisation, for his proposal would introduce uncertainty and a degree of disturbance into its orderly marketing scheme. After the exemption had been disallowed, the National Association of Retail Grocers and anyone else who liked could bring the Canners Association under attack before the Trade Practices Tribunal. I shall return to this argument later. 1 would now like to point out to the House the reasons behind the exemption of various, primary producer and associated bodies. Industries such as the dried fruits industry, the canning fruit industry and the dairy industry, being primary industries, are subject to all the vagaries of climate and the onset of pests and the like which greatly affect their output and their capacity to supply the market. In the instances that have been given exemption, they are concerned also with export trade and are subject to the fluctuations of world markets. We must have orderly marketing schemes for the local and domestic market to protect producers in these industries, whether they are growing fruits for the production of dried fruits or fruits to be canned and marketed in that form, or whether they are engaged in the dairy industry. These orderly marketing schemes have been a feature of the Australian economic scene for over half a century. I understand that the Dried Fruits Association was formed in 1907. Indeed, it was supported by legislation not only by the Commonwealth but also by States until the James case, which went to the Privy Council in 1936, and in which it was held that the legislation infringed section -92 of the Constitution. It was only after that decision that the Commonwealth Government encouraged the Association to continue orderly marketing schemes for the industry and supported it short of legislation that infringed section 92. These are longstanding orderly marketing schemes for primary industries. They are government supported, government assisted and, of course, government scrutinised.

The Australian Canners Association, which is one of the bodies accorded exemption, falls into this category. Honourable members may think that it is somewhat illogical for governments, if they support these schemes as a matter of policy, to submit to another tribunal - either a judge or a judge and two lay members - established for a different purpose the question of whether such a scheme should continue. There is an apparent lack of logic in this. Indeed, the attack now made by the Australian Labor Party on the exemption of the Canners Association, I suggest, is to be explained only on the basis that honourable members opposite are prepared to have this exemption withdrawn. Apparently, they want it struck out, whatever they say about the value of this industry. The honourable member for Dawson tried to have a little each way by saying what a valuable industry the fruit canning industry was and what a large export income it earns for Australia - $40m a year. He did this, but at the same time he did not withdraw his attack on the Association. I hope that the primary producers in this industry will note the action that has been taken in this House by the Labor Party. If they do, they will know how much they can rely on what that Party does as distinct from what its members say about the value of the industry.

The Australian Canners Association is not as old and longstanding as the Australian Dried Fruits Association, but it markets the product of an extremely large and important section of primary industry. There. are some 3,000 growers whose fruit goes to this Association, and their annual payroll is of the order of $5m. In addition, employment in actual canning operations is upwards of 5,000 employees, with an annual payroll of $6m. The canners spend more than $20m annually on goods and services provided by other Australian industries, including the sugar industry. As the honourable member for Dawson pointed out, the fruit canning industry earns for Australia an annual export income of $40m. Seventy per cent of its annual production has to be exported. The picture was not always so good. This industry has had its troubles. In Queensland, the State to which the honourable member for Dawson belongs, in relation to pineapples the industry is at present to some extent at risk.

The Australian Labor Party has to take the responsibility for its attempt to expose this primary industry to the uncertainty and difficulties inherent in the withdrawal of this exemption that it has been accorded. In 1963, the Federal Government went to the assistance of the industry under the terms of its excise legislation of that year and of the Canned Fruits Export Marketing Act of the same year and by giving general assistance. It was only from that time on that orderly marketing was put on a sound footing, and it is really only since then that the industry has made considerable progress and increased its output substantially. The Federal Government has supported the industry by these means and also by means of the sugar price concession that it extends to the canners provided it is satisfied that they are paying the fruit growers proper prices. The Government, having supported the industry in that way, would take a ridiculous step if it were now to say that the whole ramifications of this orderly marketing arrangement should be submitted to the Trade Practices Tribunal.

May I say a word or two on the main reason advanced by the honourable member for Dawson for seeking to withdraw its exemption? He says that a claim is made by the National Association of Retail Grocers of Australia that the discount provisions are unfair or against the public interest. It is true that in the rules of the Canners Association provision is made for discounts for quantity buying. If the orders involve a value of more than $3m in a year there is a discount of 5.5%. There is a sliding scale. If the orders involve less than $40,000 a year the discount may get down to 1.25%. This type of quantity discounting is well-known in all industries, and not only in primary industry.

Dr Patterson:

– That is not what they are saying.


– The honourable member did not explain to the House what the complaint is about. He had better listen to me and I will give him details. He had a responsibility, if he were going to challenge this-

Dr Patterson:

– The Minister came in late.


-I heard the whole of the honourable member’s speech. He had the obligation to tell the House the basis of the claim so that honourable members could determine whether there was sufficient in it to justify taking the serious step of withdrawing the exemption of this industry. The complaint in relation to the quantity discount is that there is a provision in the rules of the Association stating, in effect, that the policy of the Association is that purchases will be aggregated for calculating the rate of quantitative discount only when a sole proprietor or company or its wholly owned and operated subsidiary is buying and/ or retailing for its own trading purpose. What that means is that if it is claimed that over $3m worth of orders is being obtained from this organisation, the purchases have to be made by either a sole proprietor, a single company or a subsidiary of a company. In other words, there has to be one hand receiving the purchases, one person to deal with and one lot of paper work involved.

Of course, the National Association of Retail Grocers is a group of a large number of small grocers. If those grocers like to form themselves so that they have one hand and one company representing them to deal with the Australian Canners’ Association they could get the discount on that basis, but so long as they want to be divided into a multiplicity of individual units they can hardly expect a discount that is calculated on the basis of one lot of paper work, one hand to look to, one debtor to sue and one person responsible. It would be a simple matter, in practice, for them to form themselves into one body so that they would have one hand. All of this was explained in another place, but the honourable member for Dawson did not even take the trouble to explain to the House what the complaint was.

I suggest that if a complaint of this general character were substantiated to any degree the Government, which has a constant scrutiny over these bodies, would be in a position, if it were so minded, to withdraw the exemption. This policy was clearly stated by the Minister for Primary Industry (Mr Anthony) in a speech at the annual canning convention in Canberra recently, when he said:

It is essential that the canners ensure that their scheme operates in the fairest possible manner and does not discriminate between groups of traders.

The recent publicity given to this issue will ensure that the operations of the Canners

Association will be kept under the closest scrutiny, particularly by the small shopkeepers, and it is incumbent on the canners to ensure that their operations are completely above reproach.

L’ am certain that no-one has overlooked the point that it is a very simple matter for the regulation to be withdrawn at any time.

That, I suggest, is the proper way to deal with this particular situation. It is not a question of withdrawing the exemption in order to take care of what, after all, is only an unsubstantiated claim. If I am wrong in my assessment of this claim, and there is real substance in it, then it is still open to those who wish to put the claim forward to do so and to support it with better evidence and better submissions than so far have been put with a view to the Government’s supervising the operations of the Canners Association. This course is open and it is the proper way to deal with the matter.

In conclusion I suggest one thing is clear - this is a great primary industry and it should have this particular exemption which is in the interests of the growers in the industry and in the interests of Australia. It would be against the interests of those persons if there were dislocation, disturbance or uncertainty at this time, having regard to the market and to the general difficulties of the industry. Nothing has. been said to justify a withdrawal of the exemption. Steps can be taken in another way should there be substance in the claim raised by the honourable member for Dawson. I oppose the motion.

East Sydney

– I wholeheartedly support the motion for the disallowance of this regulation under the Trade Practices Act. The regulation seeks to exempt the Australian Canners Association from the provisions of the legislation. I am of the firm opinion that no organisation should be excluded from the scrutiny of the Commissioner of Trade Practices. If an organisation - whether it be a primary producer organisation or a manufacturer organisation - is trading legitimately and has nothing to hide then it has nothing to fear from coming under the scrutiny of the Commissioner. The main purpose of the legislation is to police certain organisations that are acting contrary to the public interest. If the Parliament gives a lead by exempting specific organisations then the States, which have power under section 38 (b) of the Act, can exclude organisations which operate within their boundaries. The Premiers of the States could exclude certain organisations or could give favourable consideration to other organisations which may support their policies. This could well happen in the future and this legislation would become farcical.

I am aware that there could be court proceedings and if an organisation not exempted by the regulations were taken to court and it proved that another organisation which was exempted was doing exactly the same as the organisation before the court, it would be hard for the court to record a conviction. We might reach the stage where, in court proceedings, the court might impound papers and material that belong to a statutory corporation and a Minister or his Department might invoke Crown privilege and the court might not be able to look at any of the trading actions of the statutory corporation.

In the United Kingdom no primary industry organisation is excluded from the corresponding legislation. The only industry that has had no scrutiny of it by the commissioner responsible for the administration of this legislation in the United Kingdom is the gravel suppliers industry. I do not know whether that can be regarded as a primary industry but, generally, no primary industry in the United Kingdom is excluded and all primary industries may be scrutinised by the Commissioner. In the United States of America the anti-trust laws protect the public from trade practices that are contrary to the public interest. This Parliament should be careful in its approach to these matters because it could give a lead to the States and we might find various State Governments granting exemptions to organisations trading within those States. I do not know what would happen if a company trading interstate had trouble with a company which was granted exemption by a particular State Government. What protection would be available to such a company under these regulations?

The organisation with which the Opposition is mainly concerned on this occasion is the Canners Association. The honourable member who led on behalf of the Opposition in this debate outlined the reasons why we maintain that the canners should not be exempted, but personally I would like to know whether the canners themselves wanted the exemption. Did they make representations to the Government to be exempted or did the Government simply grant exemption without any such representations? I ask the Attorney-General (Mr Bowen) whether he agreed to the granting of exemption or whether pressure was applied by certain Government supporters to have him grant exemption? I remember certain action which was taken by the Canners’ Association and which was complained of by the grocers’ organisation. The canners substituted 15-ounce cans for 16-ounce cans. They did not inform any of the other organisations affected by the change, and the price of the item itself was not reduced, but the effect was that the canners saved one can for every fifteen cans of fruit that were sold. Many grocers were not aware that this action had been taken until it was pointed out to them by housewives who realised that they were being touched. They raised the matter with the grocers who laid complaints with their parent organisation which in turn made a complaint to the Canners’ Association. This is an example of the kind of unfair trade practice that can be indulged in, and this is one of the reasons why I say that none of these organisations should be exempted from the scrutiny of the Trade Practices Tribunal.

I want to remind the House of the way in which many of the marketing authorities operating in Australia at the present time are becoming monopolies. They dictate the home consumption price of the various commodities in which they are interested, and in the long run it is the Australian public that has to pay for the operations of these various bodies. We know that many of these organisations have responsibilities in connection with our overseas trade, and we do not deny that overseas trade is necessary. But the fact is that secondary industries also have export earnings and we must safeguard our overseas trade in secondary products. I believe that all the primary industry marketing authorities should come under scrutiny. Take the Australian Wheat Board as an example. We know that the Board is selling wheat to Communist China at a lower price per bushel than is being paid by the people of India. This is in accordance with the policy of the Australian Government. If the Wheat Board incurs any loss the Australian public will have to pay for the subsidy which is given to Communist China.

We have a rice board which controls 95% of Australian rice sold both inside and outside the country. In the last 6 months the price of rice has risen by 5c per lb, which represents about a 50% rise in the home consumption price. How do we know what price will be quoted by this authority for Australian rice sold to Communist controlled countries or to the United Kingdom or to the United States? How can we know what prices will be quoted by these various marketing authorities for primary products sold in other countries? This is why I believe that marketing authorities should come under the scrutiny of the Trade Practices Tribunal. We ought to know what is going on. The present cloak and dagger method is not good enough. We find that primary producers’ organisations are exempted while various other enterprises and persons in the community come within the scope of the legislation. These include banks, hairdressers and bus proprietors. The Trade Practices Tribunal has authority to scrutinise agreements between newspapers for fixing advertising rates. It can exercise scrutiny over commission received by estate agents. Amongst others not exempted are electricians, motor vehicle repairers, dry cleaners, plumbers and road hauliers who fix freight charges. Nevertheless many primary industry organisations are in the fortunate position of being exempted.

In the long run I believe the Australian people will have to pay for these exemptions. We should not have set an example to the States by exempting people or organisations from the operation of the restrictive trade practices legislation. The method we have adopted will lead to the adoption of similar methods in the States, and we will find in the future that the restrictive trade practices legislation will not operate effectively. While I am aware that this matter has been debated in another -place I think it is right for us to raise it also in this House. Various regulations are gazetted from time to time, but this is the first occasion since I have been a member of this Parliament that I have heard a debate in this chamber on a motion for the disallowance of regulations. I know that there is a committee in another place that looks at many of the regulations that are gazetted, but I think the Parliament as a whole might be much better off if we in this House looked moTe closely at certain regulations. I support the motton proposed by the honourable member for Dawson (Dr Patterson). Although the Attorney-General has made a statement to the Parliament I do not think there are many people who are satisfied with that statement. I do not think the organisations concerned approached the Government with the object of obtaining exemption. I believe the main reason for these organisations being included amongst those exempted is to hide the cloak and dagger methods of some other primary industry organisations that are operating in Australia.


– I must admit that I find this a most surprising debate. We have heard the honourable member for East Sydney (Mr Devine), who I imagine is a great authority on the canning of fruit, propounding his views. I did not mind this so rauch because his own interest in the matter is a by-product of the thinking behind the motion that has been proposed. The honourable member says he believes that all organisations should come within the ambit of the trade practices legislation. I cannot remember any move by the honourable member for East Sydney, or by anybody else on the Opposition side, to disallow not just one regulation but two attempts at a regulation that were made a short time ago. So I simply say to honourable members opposite that they cannot have their cake and eat it. People become a trifle suspicious when members of the Opposition miss the bus completely on one ocassion and then get up at an inappropriate time and make a fuss about almost nothing. Another point made by the honourable member was that the United Kingdom has all industries covered and none excluded by their trade practice act. The very point about industries that have been excluded from our legislation is that not only is there heavy government involvement in one way or another and heavy government scrutiny but also the fact that these industries have a heavy export component. It is this export component that is the prime reason for their exemption under this Act. Having been on a scholarship to England many years ago I know that there is no export of primary industries from England, except for a few dozen eggs a year. So that excludes that line of argument if you put it in parallel with the reasons for the Government’s action in the case of those primary industries exempted from this legislation.

I was interested also in the honourable member’s ability to set up Aunt Sallies and try to shoot them down. There was no substance to his Aunt Sallies, even if there appeared to be to the honourable member. It is useless to ask whether pressure was put on the Government to have the Australian Canning Commission excluded and then try to suggest all sorts of fearful reasons for the fact that it has been excluded. If the Association did not request this - I would think it did not - this increases the value of its case. In other words, people in responsible places have seen fit to exclude this Association. You cannot go around insinuating foul reasons for an action when you do not know the reasons. However, I am not particularly perturbed with the honourable member for East Sydney. I am more intrigued by the fact that the spokesman for the Opposition on rural matters, the honourable member for Bendigo (Mr Beaton), has had this motion standing in his name for some time. I am sorry that he is unwell and is not available to lead the discussion, because I would have been amused to see him trying to get out of what is quite obvious, namely the fact that the Opposition is expressing doubt about the business activities of the Australian Canners Association. There is no other way to look at the matter. If there is no doubt, why bring it up. If there is some doubt it is so easy to blame the national grocers organisation and raise the matter under that guise. So we are treated to the unusual spectacle of the honourable member for Dawson (Dr Patterson) devoting the major part of his time to a speech in which, having brought to bear this area of doubt, he proceeded to attempt to balance his argument by saying what good fellows members of the Australian Canners Association were. I would go along, with that view but I did not express a doubt in the first place.

I think there is another angle which the Opposition has missed. 1 trust that it has not missed it, but I suspect that it has. If you look at the complement of the Australian Canning Association you will find that a lot of proprietary firms are listed. I think honourable members opposite have let their zeal run away with them or have allowed their suspicion of proprietary firms to cloud their judgment. They try to isolate these proprietary firms from the exemption provisions of the Act. The facts of the matter are that although the co-operatives are small in number on the Association’s list, they handle most of the fruit canned in Australia. 1 think that is a conservative statement; they handle the major part of the fruit canned in Australia. I noted that the Attorney-General (Mr Bowen) asked the honourable member for Dawson what his complaint was, because the Minister could not discern it. I would ask the honourable member for Dawson whom he is complaining about. Where is the fault? Where is the worry? Is the Opposition aiming at the naughty proprietaries or at the overall manufacturing industry? I do not know. Nobody on the other side in two speeches has told mc exactly at whom he is pointing the finger in this matter.

Having studied the debate in another place I can only presume that what the Opposition is trying to do is force a prong into the industry and isolate the proprietary firms who produce the smaller quantity of canned fruits in Australia. But this cannot be done in all logic. You cannot do it on several scores. Firstly an industry looks after its own manufacture in its own way. The whole thing is wedded together. As the honourable member for Dawson knows, the Fruit Industry Sugar Concessional Committee laid down conditions under which firms must buy fruit from primary producers. A level is set if they have an export component in their manufacture and they do not get their rebate against the home consumption price of sugar unless they meet these demands. So you are faced with a situation in which, try as you may, you cannot just bleed off the proprietary section from the industry and isolate the co-operative section. In the area from which I come the co-operative manufacturing side of the canned fruit in- dustry is by far the greater segment of the industry. The only representatives of the other segment of the industry in that area would be the Piper company and the Jon Products company.

By and large the Riverland fruit cooperative cannery would be the major processor of canned fruits. But it does not matter whether the honourable member for Dawson is shooting at the proprietary section or the co-operative section because in either case be is shooting at the growers who have funds invested in either of these forms. As I know to my cost in my area, more than one primary producer has got into financial difficulties with fruit canning firms as they themselves have got into financial difficulties. So the grower himself in some cases, in order to place his fruit, is financially implicated in the proprietary firms to a very large extent. If you are to tackle the entire industry you are tackling every primary producer in my area who has funds invested in the co-operative movement and in the manufacturing process of his product. I do not know whether the honourable member for Bendigo would have handled this matter as did the honourable member for Dawson, but the implication seems clear to mc that if you have some doubt about the business activities of the Australian Canning Association you are having a go at every primary producer who grows fruit under grave difficulties today and you are having a go at every section of the industry. 1 can only stand here in blank amazement and wonder what on earth has motivated the Opposition to make this onslaught. 1 do not understand it. I have no idea what the Opposition is trying to do. I know that throughout the cross sections of industries with which I am fairly conversant there will not be much sympathy for the point of view advanced by the Opposition today.

I do not believe that there is a lot to be gained by too tedious repetition of the arguments that have been put forward this afternoon. However, J would briefly refer to one matter that directly bears on this case. This is a problem which affects peaches and, to a lesser extent canned apricots and to a still lesser extent canned pineapples and mixed and tropical fruit salads. I refer to the implications of the recent Kennedy Round negotiations. I do not know how these negotiations hit the industry in the area represented by the honourable member for Dawson, but in the area which I represent the loss of preferences due to a lowering of the most favoured nation tariff rate on the United Kingdom market represents a value of about $19 a ton. This is to be spread over a 3 year period and the full effect is not to be applied in the first year. An increase of $6 per ton is due to a movement in the price of sugar. Honourable members will be well aware that the canned fruit industry is a very heavy user of sugar. I would certainly be the first to come to the party and suggest that the industries have got together and worked out an arrangement which, I imagine, is of some satisfaction to both.

If the fruit industry, which is a big user of sugar, purchased its sugar at world parity prices, obviously the Queensland sugar growing industry would not be able readily to quit its surplus and would be left with much of the production that it now has. I believe that that is a fair statement. But on the other side of the argument it is fair to say that the formula worked on for the home consumption price of sugar has within it a margin from which the sugar industry can in effect subsidise the rebates for the canned fruits industry so that the Australian sugar industry can be roughly in competition on a world basis. In other words, its aim through the Fruit Industry Sugar Concession Committee is to bring the price of sugar used in the canned fruit industry down some way towards, if not frequently right to, the world parity price of sugar. So there is a mutuality between these two industries, although one is at the northern tip of Australia and the other is in the southern areas of Australia. I have rather lost sight of pineapples which are a rather important industry in Queensland. The mutuality of the arrangements to which I have referred is important and demonstrates that two industries, if they can only learn to work together, can benefit. These two industries have received a lot of Government guidance, considerable temporary finance and much supervision. The co-operation between these two industries, with the Government playing a very important part in the picture, represents a high degree of orderly marketing in many ways.

I was always under the impression that the Australian Labor Party believed in orderly marketing. I presume that if honourable members opposite were tested they would still show themselves to be in favour of orderly marketing, but I am becoming a little fed up with hearing words flow from their mouths about the value of the marketing without seeing any demonstration from them that they believe in this policy. The honourable member for Fisher (Mr Adermann), who is now sitting on the back bench, will be aware of the many moves throughout various industries for orderly marketing. For many years he has borne the brunt of industry demands for orderly marketing. This Government has always met reasonable demands in this direction. If enough of those in an industry have believed it to be right and proper to have an orderly marketing scheme, the honourable member for Fisher has been the first one to listen to their ideas and, with the department which he formerly administered, evolve a scheme which could be considered a workable one. Orderly marketing schemes have been going on for years. From the way some members of the Opposition talk one would sometimes suppose that this side of the Parliament had never done anything in this direction. The more we look about us the more schemes we see in various industries and particularly in those primary industries which have a high export component. Where orderly marketing has been introduced it has been brought in by the Government. Although we do not generally go about making a dreadful din about what we have done, I am sure that many people are grateful far the personal endeavours of the honourable member for Fisher and for the consideration that has been given by the Government.

I propose now to go very briefly over the points that I have touched on. First I should say that honourable members opposite cannot, at a flick of a finger, suddenly get up in this place and say they do not want the Australian Canners Association exempted from the regulations made under the Trade Practices Act. It is quite impossible to do that without bringing into the net the entire co-operative movement and bringing into it also every grower. There would be a great many implications of such a move. It cannot be suggested that this is not orderly marketing. As the Attorney-General (Mr Bowen) explained extraordinarily well, it is quite obvious that in this Association there are the ingredients of a statutory body, by implication if not in fact 1 have found it very difficult to discern exactly What the Opposition wants from this debate. I point out that there are great implications in this scheme between the sugar industry, the entire fruit industry and many hard working, dedicated, sincere people who have tried to do their best.

I conclude by making one practical comment. Everyone in this place who buys canned fruit knows very well that there has been a buyer’s market for this product for some time. From an industry point of view, from a co-operative point of view and from a proprietory point of view, it has not always been easy to quit bulk supplies of canned fruit. Frequently canneries in my area have been held to scorn by other sections of the industry which suspect that the canneries have been giving discounts beyond those which are normal. I can think of one small canning factory in my State at Murray Bridge. This is not an export canning firm and so has not been able to get the benefit of the rebated sugar prices, lt found life very difficult when chain stores, such as Woolworths Ltd, were adopting what frankly could be called cut throat tactics to get prices down to a minimum before they would buy. I point out to honourable members opposite that the other side of the implication of a buyer’s market over the years is that the housewife has not had to put up with over-pricing in this field. There is no question in my mind that if it had been a seller’s market this would not have been the case to the same extent over the years. So no matter which way it goes, I personally accept the information brought forward by the Australian Canners Association which was referred to by the honourable member for Dawson.

I have noted that in another place this matter has been dealt with more fully. At this point I cannot see any value in upsetting what is a very intricate state of balance within the industry. We are facing enormous increases iri crops through soldier settlement and through other areas producing greater volumes of deciduous fruit. I feel that it is most urgent that nothing should be done to upset the delicate balance that exists in this industry at present. I have pleasure in saying that I shall vote against the motion.

Question put:

That the motion (Dr Patterson’s) be agreed to.

The House divided. (Mr Deputy Speaker- Hon. W. C.


AYES: 33

NOES: 61

Majority 28



Question so resolved in the negative.

page 2336



Ministerial Statement

Minister for National Development · Farrer · LP

– by leave - I refer to the questions asked by the honourable member for Mackellar (Mr Wentworth) and the Leader of the Opposition (Mr Whitlam) on 19th October of the Prime Minister (Mr Harold Holt) and the Attorney-General (Mr Bowen) respectively in which they sought the tabling of offshore exploration and production titles for oil and gas which have been issued or are in the course of issue either by the Commonwealth or a State and which it is proposed to recognise under the legislation before the House. Clause 146 of the principal Bill accords recognition to the production titles issued by the Minister of Mines for the State of Victoria to Haemitite Explorations Pty Ltd and Esso Exploration and Production Australia Inc in respect of the Barracouta and Marlin fields. The form of these titles is set out in the third schedule to the principal Bill and the areas covered are indicated in the map which I now table.

Clause 147 of the principal Bill accords recognition to the Barracouta and Marlin fields pipeline licences granted on 10th October 1967 under the relevant legislation of Victoria to the same two companies. Copies of these pipeline licences are being made available to honourable members. Clause 148 of the Bill accords recognition to a lease granted on 7th February 1967 under the Petroleum Act of Western Australia to West Australian Petroleum Pty Ltd. Copies of this lease are being made available to honourable members.

The foregoing documents cover all the production licences for oil or gas that have been issued by Commonwealth or State which are accorded any recognition by this legislation. The pipeline licences are the only commitments in connection with those production titles which the legislation recognises. As regards offshore exploration titles, over fifty of these have been issued by State governments and the Administrations of Commonwealth Territories which are still current. These titles are ‘prescribed instruments’ within the meaning of clause 141 of the principal Bill. It is not practicable to lay copies of these numerous documents on the table of the House but I now table the following:

  1. A map and explanatory key showing the exploration titles that had been issued up to December 1966, and the persons to whom they were issued;
  2. A summary of offshore petroleum titles prepared as at 30th June 1967 showing the State or Territory, the title number, the holder of the title, area, date of expiry and whether or not the title is wholly offshore;
  3. As regards New South Wales, a copy of Exploration Licence 112 to Shell Development (Australia) Pty Ltd. This title is typical of other licences issued in New South Wales;
  4. As regards Victoria, a copy of Permit Number 57 issued by the Minister to Shell Development (Australia) Pty Ltd, together with a copy of the relevant regulations under which the same was issued. This permit is typical of all exploration permits issued in Victoria;
  5. As regards Tasmania, a copy of Exploration Permit No. 5/67 issued by the Minister for Mines to Magellan Petroleum Southern Pty Ltd. This permit is generally in line with other exploration permits issued in Tasmania;
  6. As regards South Australia, a copy of the prescribed general form which licences issued in that State must follow. Individual licences issued in that State are not public documents but are treated as confidential by the State authorities. They are therefore not available to me for tabling;
  7. As regards Queensland, a copy of Authority to Prospect 127P issued by the Acting Minister to Corbett Reef Ltd. The text of this Authority generally follows thatif all previous offshore authorities to prospect issued in Queensland;
  8. As regards the Northern Territory and the Territory of Ashmore and Cartier, a copy of a typical offshore exploration title;
  9. As regards the Territories of Papua and New Guinea, a copy of a typical offshore exploration title;
  10. As regards Western Australia, a copy of Permit to Explore 27H issued to West Australian Petroleum Pty Ltd. This title is typical of other exploration permits issued by Western Australia.

page 2337


Second Reading

Debate resumed from 19 October (vide page 2066), on motion by Mr Bury:

That the Bill he now read a second time.


– The dispute between the airline operators and the Australian Federation of Air Pilots has been going on for some time. There seems to be more unrest between Qantas Airways Ltd and the pilots than there is between other airlines and their pilots although from time to time the domestic airlines have been involved, as they are at present. The dispute between Qantas and the Australian Federation of Air Pilots is to be regretted. Anyone who has taken pride in the great achievements of Qantas cannot fail to be dismayed at the continuous disputation between the management and the pilots. The Minister for Labour and National Service (Mr Bury) in his second reading speech seems to be happy to lay all the blame on the air crews and their organisations, particularly the Australian Federation of Air Pilots. The Federation, on the other hand, lays the blame on the management of Qantas and the Minister himself.

The purpose of this Bill is to hold a big stick over the heads of the pilots, the engineers and the navigators and to make tame cats of them. Independent people blame both sides for the disputes that have occurred over the years. The financial editor of the ‘Sydney Morning Herald’ on 9th December 1966 had this message for the Qantas protagonists:

Both sides in the Qantas dispute deserve stiff lectures. I shall begin with the pilots, although it is the Qantas board and management that have to learn the most fundamental lessons.

I do not intend to go right through the article because it is extensive. However, I would like to quote what the editor had to say in regard to the board, although he was critical of the pilots as well. He said:

To the board and management of Qantas an enormous educational programme in industrial relations is obligatory.

The company’s administrative structure is disasterously wrong for its required purpose. The chronic tendency to impute the worst motives to the pilots, to fear them as an alien necessity and, because of the fear, to attempt to repress and goad them, are inherent in the structure.

For 18 months the Qantas board and the Departments of Labour and Civil Aviation have been sitting on a report prepared by five highly qualified officers of the Commonwealth Department of Supply.

Ostensibly dealing with ‘Aircrew Fatigue in International Jet Transport Operations,’ the authors of the report (while rinding the fatigue question to be one of some seriousness) found themselves inevitably drawn to the perplexity of the subject of the existing in management-pilot relations.

They pointed out the feeling of pilots of being, on the one hand, given entire responsibility for the aircraft and its passengers and then, on the ground, being ‘pushed around by every little clerk in the office.’

They warned that the very qualities that made an outstanding air captain are ‘likely to be possessed by the type of person who reacts strongly to what he perceives as unnecessary restrictions, petty bureaucratic practices and attempts to “push him around”.’

At The end of their study of air fatigue, the scientific research team took it upon themselves to urge action ‘to eliminate the atmosphere of mutual distrust and suspicion which has prevented effective co-operation between management and flight staff, and contributed to the stresses to which crews are exposed’.

I direct attention to that because at least it shows that some people do not blame only one side for the trouble that has existed in this dispute. The Bill is directed at the air crews at a time when agreement has just been reached between Qantas and the Federation. The Minister for Labour and National Service, during the course of his second reading speech said:

J am glad to say that, under the chairmanship of Sir Leslie Melville, agreement was recently reached between Qantas and the Federation, but not without threats by the hitter’s representatives of direct action and of walkout from the conferences when matters were raised of which those representatives disapproved.

The Minister indicates in this portion of his second reading speech that the Federation representatives were prepared to walk out. I do not know whether he realises it but that is not a correct statement. I was handed an article by Mr Gosbell who is chairman of the overseas branch of the Federation. The article states:

Wall reference to the statement about that “walk out from the Conference when matters were raised of which those representatives disapproved’.

At no time did the Australian Federation of Air Pilots representatives remove themselves from the negotiating arena. Certain Qantas pilot negotiators did not attend some of the last meeting; but the Australian Federation of Air Pilots was always represented, and had a full mandate from all branch members. This (and other statements) is indicative of the Minister’s repressive and vindictively inaccurate approach to a situation which can only be described as a storm in a tea cup. A climate is being deliberately constructed to conform with the Government’s desires apropos proposed legislation.

The Minister should be certain of the facts. He would have the House believe that the Federation walked out of the conference when it was the Qantas pilots who walked out. As a matter of fact, Captain Brown, who is one of the domestic airline pilots, came to the conference and took their place although he was not at the conference originally and was not supposed to be there at that time. The Minister has said that the agreement has been arrived at. One might reasonably assume, referring to the agreement, that the matter would have been allowed to rest for the time being at least, to see whether peace had at last been restored to this very important industry.

Noticeably, the Minister waited until the agreement was arrived at before he introduced this one-sided measure. Had he introduced it earlier, possibly Qantas and the Federation would not have reached agreement. In his second reading speech’ the Minister said:

The Bill before us provides for a new Part IIIA within the Conciliation and Arbitration Act 1904-1966 which will provide orderly means for the prevention and settlement of industrial disputes involving pilots, navigators, and flight engineers.

Although the dispute was with the pilots the Minister has brought navigators and flight engineers within the ambit of the Bill. Flight engineers are already registered with the Conciliation and Arbitration Commission and are in fact operating under an award of the Commission. Two groups of workers who are classified as part of the flight crew have been left out of the Bill. I do not know whether they are complaining about this. They are flight stewards and hostesses who, of course, form part of the flight crew. As I have mentioned, the only body at present registered with the Conciliation and Arbitration Commission that now comes under this new provision is the Australian Airline Flight Engineers Association. That body has had only one stoppage in approximately 10 years of being registered. Surely there was no justification for altering that setup.

The Pilots Federation was registered, but by its own decision placed itself outside the powers of the Conciliation and Arbitration Commission. Who can blame the Federation for taking that action, when many other unions at present registered have been contemplating taking the same action? There is deeper discontent in the trade union movement because of recent onesided decisions of the Commission, including the recent total wage decision for which this Government must bear quite a lot of responsibility because of the submmissions its representatives made to the Commission during the hearing. The Airline Navigators Association, as I mentioned, was never registered under the Conciliation and Arbitration Act. This Bill brings that Association also within the ambit of the Act. I do not know whether there has been any disputation with the navigators or not, but they are being brought under the provisions of the Bill. The special tribunal to be established will be known as the Flight Crew Officers Industrial Tribunal. The Minister said:

We could approach this legislation as providing an insurance policy for the future. But it is rather more than this. The fact of the matter is that currently there is no machinery for handling the industrial relationships of the pilots and the airlines.

What the Minister should have said was that the Bill was a means of disciplining aircrews and forcing them to accept whatever conditions the tribunal likes to impose, whether such conditions affect safety or not. This Bill is levelled mainly at pilots, but it brings in the domestic airlines’ engineers and the navigators, who have never been registered. I understand that the reason why they have not sought registration was that they did not have sufficient numbers to become registered. Even so, there was no reason why the Conciliation and Arbitration Act should not have been amended, if they wanted to be registered. to bring them in with their lower numbers. I understand that they have a membership of 92. I have always been of the opinion that a union or an association registered under the Conciliation and Arbitration Act should comply with the decisions of the Commission and if they are dissatisfied with any decisions they should use the normal channels that are available to alter those decisions. That has always been my belief.

Surely a different situation arises in this case. Here the Pilots Federation and others are not desirous of registering, but there is power in this Bill to declare a body and that body then comes within the ambit of this Tribunal. The Minister said:

Next, there is power to declare a body. This is a second insurance provision.” Just as the representative order provisions are designed to cope with the tactics I mentioned a moment ago, so the provisions about declared bodies take account of the fact that neither the pilots nor the navigators’ associations are registered organisations, and could be replaced by other unincorporated bodies under the new system.

That provision is containued in section 88z of the Bill. This raises a rather interesting point. Section 143 of the Conciliation and Arbitration Act contains a provision for the deregistration of a union under certain conditions. Since 1958 industrial action has been mentioned as one of the grounds on which action can be taken. That is contained in section 143(l.)(h) of the Act. There is also provision for deregistration where an organisation has wilfully neglected to obey an order of the court - section 143 (1.) (g). The new ground that was added in 1958 provided for deregistration for continued breach or non-observance of an award by an organisation or its continued failure to ensure that its members complied with and observed an award. Prior to 1958 the court bad a discretion to deregister, but the section now provides that upon one of the grounds that I have mentioned being made out the court shall deregister unless it considers to do so would be unjust. This, in itself, has always been considered to be a punishment because it deprives the members of any deregistered organisation of the protection of the award. The organisation ceases, under those circumstances, to have any force or effect. That would be so in relation to an organisation that sought registration under the Conciliation and

Arbitration Act. Deregistration could have no worries for an organisation such as the Pilots’ Federation or the Airline Navigators’ Association, which are to be declared bodies and brought under the Conciliation and Arbitration Act against their own wishes. When a body has been declared under section 88z it can be forced to be a party to proceedings before the tribunal. Section 88z (4.) provides that for the purpose of enforcing an order of the court against a declared body, process may be issued and executed against any property of the declared body, or in which the declared body has, or any members of the declared body have, in their capacity as such members a beneficial interest. Sub-section (5) applies in relation to an order of the court against a person in respect of anything done, or omitted in his capacity as an officer, or a person acting in that capacity. Sub-section (4) has the effect that penalties can be enforced against the property of the declared body. Sub-section (5) ensures that a penalty imposed upon an officer of a declared body can be enforced against the property of the declared body. Sub-section (6) ensures that the property of branches of a declared body is available for payment of penalties imposed on the declared body, or an officer of a declared body including a branch officer. This means that certain funds are in jeopardy. For instance, there is a Loss of Licence Insurance Fund just for the purpose of protecting pilots or engineers who may lose their licence due to ill health or some other reason. A high standard of fitness is set for pilots and engineers. I understand that they have to be medically examined at frequent intervals. There is always the possibility of losing their licence due to ill health. Under this legislation that Fund could be in jeopardy. Also, there are provident funds that could be in jeopardy under that section of the Act. I point this out to show the bad effect that the section could have on the workers concerned in this industry. Dealing with section 88za the Minister said:

Under the proposed Section 88za the Tribunal will be able to appoint a conciliation committee upon request by an organisation or persons directly concerned if it considers that the appointment of a committee is reasonably likely to lead to a settlement of the industrial question. A committee will consist of the Tribunal as chairman, and an equal number of representatives from both sides. Its function will be to endeavour, by discussion and negotiation, to formulate terms for the settlement of the industrial question. If the representative members agree unanimously on the terras of settlement, the Chairman may certify the agreement. It will then be deemed to be an award of the Tribunal. If the Chairman is satisfied that further proceedings of the committee are not likely to produce an agreement, he may terminate the proceedings and, as the Tribunal, determine the matter in dispute.

It should be noted that if the representative members agree unanimously on the terms of settlement the Chairman may certify the agreement. Section 88za (5.) provides:

The Chairman may refuse to certify such a memorandum if he is of the opinion -

the terms of settlement contain provisions which the tribunal has no power to include in the award; or

it is not in the public interest that the memorandum should be certified.

I am concerned about the wording of subsection (5.) (b). This is a stupid subsection, in my opinion, which could prolong a dispute rather than settle it. The greater part of the Minister’s speech dealt with the difficulty of getting the parties to reach agreement and, having reached agreement, to abide by such agreement. In this legislation he places an obstacle in the way of the agreement being certified, even if it has been reached unanimously. In my view, when an agreement has been reached no obstacle should be placed in the way of its being certified.

Perhaps the Minister can answer this question: Who is to define public interest? What in fact is meant by public interest? One would think that the prompt and unanimous settlement of a dispute would be in the public interest. Once a dispute arises, every effort should be made to bring the parties into harmony and when agreement is arrived at such settlement should be accepted and certified. The word conciliation’ comes first in the Act. It is placed before ‘arbitration’ in importance in the title ‘Conciliation and Arbitration Act’. I have said before that insufficient emphasis has been placed on conciliation. People have become accustomed to speak of the system we have as the arbitration system and there is a tendency to forget that the title of the Act is ‘Conciliation and Arbitration Act’. The placing of the word ‘conciliation’ before ‘arbitration’ is clearly significant.

Proposed new section 88za (5.) recognises the likelihood that the parties to an industrial dispute will themselves arrive at an agreement to govern their industrial relationships. However, an obstacle is placed in their way by this sub-section which provides that, even if the parties agree unanimously, the Chairman, who is in fact the Tribunal, may refuse to certify it if in his opinion it is not in the public interest. Proposed new section 88z(2.) provides that, apart from the new sections that appear in the Bill, sections 109, 109a, 110, III, 117a, 119, 138 and 188 shall have effect as if a declared body were an organisation within the meaning of this section.

Sections 109 and 111, as the House will know, are commonly called the pains and penalties sections by the trade union movement. The pilots, engineers and navigators will be subject to the penalties provided by these obnoxious sections. The Australian Council of Trade Unions and the Australian Labor Party have been pressing for the repeal of the injunctive and contempt provisions of sections 109 and 1 11. As a result of amendments that were persistently sought by the Opposition until they were at last granted a little time ago, before the punitive provisions are applied notification must be given that a breach or non-observance is likely to occur. The notification must be given without delay, unless there is reasonable cause for delay, and there is provision for a cooling off period of 14 days before the penal provisions can be used. There is no doubt that these amendments improved ‘ the situation. However, in my view, the mere fact that these sections are in the Act is bad. We have the strongest objection to the amending Bill, particularly when the organisations are not registered under the Act but are forced to come within its provisions.

Section 119, which applies to declared bodies, provides for the enforcement of orders and awards. It also provides for maximum penalties to be imposed by magistrates and local courts. 1 have already mentioned the section that enables an order to be enforced against the property of a declared body. Other disciplinary powers are possessed by the court, apart from the vicious penal provisions of sections 109 and 111. I am not suggesting that they should ever be used. The authorities can go to another Act if they wish to take action. Sections 30j and 30k of the Crimes Act enable such action to be taken. Section 30j provides in effect that, in the event of a proclamation being made of the existence of a serious industrial disturbance prejudicing or threatening trade or commerce - those are very important words - with other countries or among States, which involves strike action in connection with the transport of goods or passengers in overseas or interstate trade, it is an offence to continue such action. Section 30k deals with threat or intimidation. The Act also refers to boycott or the threat of boycott of property. I mention this just to show that legislation already existed, if the Government had wanted to use it. I do not suggest that it should be used; I merely point out that it was already on the statute book.

When I dealt with section 30j, I mentioned an industrial dispute prejudicing trade or commerce. Those words are used in the Crimes Act. The Minister is using the trade and commerce argument in support of this Bill. Referring to proposed new section 88u, sub-section (1.), paragraphs lb) and (c), he said:

The jurisdiction is constitutionally complete as regards TAA and Qantas. For the rest, to the extent, if any, that the trade and commerce power is not relevant, the normal conciliation and arbitration power conferred by paragraph (c) will be available to the Tribunal.

He is attempting to use both powers to give legal effect to the Bill - the arbitration power, and where that does not apply the trade and commerce power. Some doubt exists as to the legality of the amending legislation. So even if it passes both Houses of the Parliament, its legality may be challenged in the courts.

Apart from our overall opposition to the creation within the Conciliation and Arbitration Act of a separate Tribunal to deal with flight crews, several specific objections should be made. I have already mentioned some of them. Another that I stress is the appointment of a person to constitute the Tribunal for a period of 5 years. This has considerable weaknesses, because it leaves the way open for considerable pressure to be applied on such a person if he wants to be reappointed. He is eligible for reappointment. Conciliation commissioners are appointed until they reach the age of 65 years and judges of the Commonwealth Conciliation and Arbitration Commission are appointed for life. This is a weakness in the structure of this Tribunal.

No-one can tell me that responsible bodies such as the Australian Federation of Air Pilots, the Australasian Airline Navigators Association and the Australasian Airline Flight Engineers Association, would authorise a stoppage of work or take part in disputes such as those that have occurred unless there was some extreme provocation. This cannot be a one sided argument. The finalising of the recent agreement was delayed because of the attitude of the management of Qantas. I want to quote from an article in the ‘Age’, another independent source, which dealt with this dispute. It said:

Far from burying their differences, the pilots and the management have approached the strike settlement talks with suspicion and hostility. That is the only possible conclusion when two groups of professional men sit down - allegedly to negotiate - and after talking for 33 days can only tentatively agree on one minor issue.

It went on -

The main issue in dispute is not pay but pilots’ responsibilities. The pilots feel the company’s terms stop little short of recrimination, and this has disrupted negotiations over a comprehensive form of pilots’ contract.

Mr Chaney:

– What is the date of that?


– It is not easy to read. This is a photostat copy from the Library. It looks like 31st June 1967, but the date could be checked. The article continued:

The pilots object strongly to Qantas demands that they obey all lawful instructions issued by the company, fly into any airport approved by the Department of Civil Aviation, and that the Australian Federation of Air Pilots undertakes not to instruct pilots to disobey company orders. The last submission particularly annoys the pilots, and Qantas would be wise to think again about asking the federation to render itself impotent as an industrial force.

It concluded:

It is time the pilots and the management realised that their inability to sit down and reason together is a luxury the Australian taxpayer cannot afford.

I agree with that observation. The Minister for Labour and National Service would have us believe that the fault lay with the pilots. That is my argument with him. Others at least have the decency to apportion the blame between pilots and airline managements. In my opinion, air crews should have the say in matters vital to safety. It is the safety not only of themselves but also of the passengers that is in jeopardy. Under the Air Navigation Regulations, the pilot is held responsible for the safe conduct of the aircraft and its passengers. He must be free of any pressure that would inhibit his right to exercise his authority. The objection of pilots to night landings at Djakarta apparently was reasonable. I am not an authority on these matters, but I understand that the Department of Civil Aviation has now issued instructions that crews are not to land at Djakarta at night. Indeed, for a time, I understand - this can be corrected if I am wrong - they were not allowed to land there even during the day. The Minister for Labour and National Service may like to say why a scientific report dealing with fatigue among crews employed by Qantas Airways Ltd was suppressed. I understand that it was critical of the Qantas management. As my authority for this statement, I cite a report in the ‘West Australian’ of 2nd December 1966, which appeared under the heading ‘Fatigue in Qantas Crews, Says Report’, and which states:

A scientific report which points to considerable fatigue among Qantas aircrews was presented to an international meeting in Sydney today.

A sixteen-page paper on the survey was read today to an international meeting on aerospace medicine in Sydney. Tonight the Australian Federation of Air Pilots alleged that a 150-page interim report on the survey had been suppressed because it was critical of the Qantas management.

That report dealt with a considerable number of items. The newspaper article continues:

The report was prepared by a five-strong Melbourne team of doctors, psychologists, engineers and social workers. It embraced detailed studies of the working conditions of 488 Qantas aircrew, including 106 captains and 207 first and second officers.

Points made in the complaints about fatigue by Qantas pilots and navigators were stated in these terms:

Complaints of fatigue by Qantas pilots and navigators had a real foundation. Under normal operating conditions this fatigue was considerable and in certain circumstances excessive. Navigators suffered even more than pilots from extreme fatigue because they had less opportunity for in-flight relief.

The problem of inadequate sleep during flights overshadowed all other complaints. The social and domestic consequences, especially on short trips, were unpleasant for the air crews and their families. Digestive upsets were the main medical complaints. . . .

Those who fly a good deal, and especially members of this Parliament who fly regularly to Western Australia, know that at the conclusion of a flight they are never feeling as fit as they did when they started.

Mr Chaney:

– They do not get as much money for it as the pilots do, either.


– That may be so. Members of the Parliament are not paid any more for those flights. I have here also a document in which is printed an article by Captain P. W. Howson, Director of Technical Services for Qantas. It is headed Safety is the Keystone’ and it is well worth reading. I do not propose to go through all of it. Among other things, it states:

We must accept the fact that pilots will always attempt to do the best job for their company: This in simple terms is to deliver the load to its scheduled destination at the hour set out in the timetable. It is demanding a lot of any person to have to exercise in one tour of duty the range of skill needed to operate a large jet aircraft into the variety of airports that exist throughout the world today when they vary from those with the most sophisticated aids to some that could almost be classed as primitive.

The article goes on to deal with the introduction of jumbo jets. Having stated that the airlines ought to do certain things, it continues:

After all, if they do not the pilots will, and in my opinion when the order of responsibility reaches the level of a ‘jumbo jet’ or supersonic transport they are entitled to do so if the airlines abdicate their duty.

There is in his article a lot of information that is worthy of note by all those who are interested in this matter. If the air crews and their associations take some form of direct action in the interests of safety, under the terms of this Bill they can be subjected to all the pains and penalties of our conciliation and arbitration machinery. That is the point that I am making. The present dispute over superannuation payments ought to be settled quickly. Surely the whole matter revolves around the question of whether there has been a breach of the agreement relating to superannuation. My understanding of the situation is that a formula was agreed on some years ago, based on gross earnings of a pilot over a period of 5 consecutive years, applied according to length of service. The gross salary was defined as ‘annual base salary including type pay’. Superannuation was based on the rate of earnings at a time close to or at retirement, I am advised. Increases in salary have caused appropriate increases in superannuation contributions deducted from salary. The airline operators suddenly, in July 1966, laid it down that superannuation payments would be based on earnings for 65 hours flying a month. The pilots, of course, claim that superannuation should be based on earnings for the hours that they work, which usually total more than this each month. The Australian Federation of Air Pilots decided to move for resolution of this problem under the Agreement on Industrial Relationships Procedures. After the Department of Labour and National Service had considered the matter, I understand, the Federation received from the Department on 20th June 1967 a letter that stated:

It is the view of both companies that this superannuation matter does not come within the ambit of clause 4(d) of the Procedures Agreement as you had proposed and that it is not a matter that should be dealt with under the Industrial Procedures.

Surely this is a matter that could have been considered by an independent mediator appointed in accordance with those procedures. I do not want to go into a lot of detail about the superannuation issue, but some facts have been stated to me by the Federation of Air Pilots as follows:

  1. The negotiated Agreement in 1964 took up the gross salary of the ordinary line pilot for superannuation purposes.
  2. ‘Annual base salary including type pay’ was simply the phraseology used to define what factors made up the salary for superannuation purposes under the old contract of employment.
  3. Increases from that time to July 1966 have been applied in accordance with this concept as was the’ intention when the Agreement was negotiated.
  4. ‘Base salary’ in the new contract is only $2,286 per annum. All other salary for the ordinary line pilot is type pay for the aircraft concerned and is collectively known as ‘gross hourly pay’.
  5. Pilots are obliged as a matter of normality to fly blocks of flying initially established at between 71i to 75i for jets and 76i to 80i for prop, aircraft.
  6. Sixty-five credited hours flying is not ‘base pay’ and has never had any relationship whatsoever with superannuation.
  7. A review of the current Agreement is not possible before January 1969.

This material that I have been given goes on to describe what gross pay is. I am not an authority on these matters, of course I can put to the House only what I have been told. This trouble has arisen apparently because of salary increases. It should be remembered that there is a compulsory retiring age of 55 for pilots. Therefore, a substantial retiring allowance surely is justified. The main point is: Was an agreement made? If so, has it been breached? The evidence seems to suggest that it was made and that it has been breached. The Minister may be able to say whether this is so. I understand that he has written to the airline operators suggesting that the pilots’ claim in respect of superannuation should be deferred until this Bill is passed. The reason for that is obvious. If he has done so, he is not assisting in the settlement of this dispute. The Minister is forcing the flight crews to come under the Conciliation and Arbitration Act because of their strong bargaining position. He is doing this to weaken the flight crews’ organisations. He should remember that a big section of the trade union movement believes that arbitration should be jettisoned and that resort should be had to collective bargaining. The Commission’s influence has been weakened because of recent decisions - particularly the recent total wage decision which was made at the request of the employers supported by submissions by the Government. Is it any wonder that the flight pilots want to keep out of arbitration and use their bargaining strength to get that to which they consider they are entitled?

I point out that direct action, or the strike weapon, is not illegal in Australia. It was illegal until 1930 when the prohibition on strikes was removed from the Act. True there is power under the Act to include a ban on strikes in an award. When that is done the contempt provisions of sections 109 and 111 come into force. However, it cannot be expected that a system of industrial arbitration will eliminate direct action. If anyone believes that, he is attributing to arbitration a condition it cannot possibly fulfil. The laws of the land are much more easily applied by the State to individuals for the settlement of disputes than by exercising compulsion over powerful organisations such as trade unions or, as in this case, to the Australian Federation of Air Pilots,

We are dealing with a powerful section of the community. A huge majority of people accept the fact that the summary and criminal law courts are enforcing laws with which they themselves agree, but in the field of industrial conflict the situation is different There is no set principle of what is just, reasonable and fair. The conciliation and arbitration system is dealing with a question on which the community as a whole is divided into two camps. Workers and employers have their own views on what is reasonable and just. The disputes that have been occurring between airline operators and flight crews surely emphasise this point. Here we have two bodies of professional people who cannot agree on what is just and reasonable in their own particular field. Despite recent doubts that have been created in the minds of the workers, to my mind there is no doubt about the value of our conciliation and arbitration machinery, but it is ridiculous to think that it could usher in a reign of peace in industrial relations.

Forcing the flight crews under the provisions of the Conciliation and Arbitration Act will not mean that all danger of direct action is removed. If the Minister thinks that it is, he is kidding himself. No-one can deny the value and importance of international law, but conflicts arise between States and these are so severe that all observance of the law is swept away. Hundreds of issues that arise are successfully settled by our arbitration courts, but the courts cannot settle all disputes. The system would be strengthened if the Government would accept the reality of the situation. There are issues and conflicts so acute that no tribunal can hope to achieve an acceptable solution. Tribunals are not likely to make decisions which involve too great a departure from existing decisions. Their aim is to stabilise, not to disturb. The pilots’ federation realises this and that is why it wants to remain out of the arbitration system. The point was made by Mr Justice Higgins when he said:

The Act requires me to prevent as well as settle industrial disputes, and 1 have to sec to it that 1 do not create other disputes in settling this - that I do not loosen a dozen nails by driving in one.

That is why this amending Bill makes provision for cases in which it is not in the public interest for a memorandum to be certified. Since the main objective is peace and stability, arbitration tribunals are not free to seek solutions that are absolutely just. They try to find solutions which will work, which parties are willing to accept and which will keep the wheels of industry turning. It is not a system that can wholly replace industrial action. The Minister will find that out when there is a further clash between airline operators and flight crew organisations if this legislation is carried.

I have expressed my views on this legislation on behalf of the Opposition. I am sure all members sincerely hope that the industrial unrest that exists in the airline industry will settle down and that a reign of peace will follow. We do not think that this Bill will usher in that reign of peace and so we propose to vote against the second reading and to oppose the other stages of the Bill.

Minister for Civil Aviation · Darling Downs · LP

– Where does the Opposition really stand in relation to the principle of conciliation and arbitration? It has been made quite clear by the principal speaker for the Opposition that members opposite are prepared to accept the principle of conciliation and arbitration for every industry in Australia bar one. Why this exception? Why does not the Opposition agree that the airline industry in Australia should come within the scope of our arbitration system? Has the Opposition’s policy changed, and has it decided that there are some special reasons why one industry should be treated differently from other industries? If so, we would like these questions answered by other speakers for the Opposition. In other words, what is apparently a principle in one case is not a principle in another. The policy that the Labor Party is prepared to apply over the whole range of workers in Australia is not to apply to one select group. What is the reason for this? It makes us very suspicious of the reasons why the Opposition has put such a case, especially as it has always stood for the principle of conciliation and arbitration.

It must be remembered that this particular measure, like the Conciliation and Arbitration Act generally, applies not only to employees but to employers at the same time. Why this objection to the principle being applied in this particular case? Why also was so much play made of a report dealing with fatigue? Why was this introduced? Was it done to try to side track the principal issues? The honourable member for Stirling (Mr We?bb) read from the report, but I am sure he does not know its origin. He quoted from a copy of a report which was submitted to the DirectorGeneral of my Department at his request to support some investigations which were being conducted into operational matters. It contained evidence given by a wide range of individuals who gave confidential and private information. Among those who gave information were pilots, other members of flight crews, representatives of the managements of Qantas Airways Ltd and other airlines. They gave, in confidence, information of a personal nature. It is quite obvious that this report, which was purely a departmental report submitted for operational purposes, was not designed to be made public. Today it has been suggested that this was a report which was to be made public and that it has been suppressed by the Government for some sinister reason. There is nothing more absurd than that statement.

While this was a report for the DirectorGeneral of my Department, we did provide to the Australian Federation of Air Pilots a copy for its information. The Federation had knowledge of the report and it has discussed it with my Department. It was rather strange that when the strike of Qantas pilots took place last year, the Federation released this report publicly. A lot of information which was quoted in the Press, and which was quoted by the honourable member for Stirling, came from the information that was provided at that time by the Federation. This, I believe, was a breach of confidence, because this was a report which was not of public distribution but which was designed to deal with operational matters only. It is my intention to summarise some of the major points of this report and at a later stage I hope we can make a summary of the general conclusions which will be made public. But the information and the evidence contained in the general report of course remain confidential, because they include personal and other information given by people in confidence when the survey was being made.

The honourable member quite rightly referred to the successful agreement which has just been concluded between the Qantas pilots and the Qantas management. This is now in the process of being prepared for ratification and the details are being thrashed out. I understand that a successful conclusion, after the initialling of the agreement, will be reached in the near future. We do hope, and 1 fully expect, as I have said publicly, that after the signing of this agreement there will be a period of industrial peace for Qantas and its pilots. The agreement will give them tremendous advantages and it should also be of advantage in the long term to the company itself. 1 was very happy to see the conclusion of this agreement. L am sure it has given great satisfaction to the pilots themselves and also to the management of Qantas.

We must also remember that the domestic operators concluded an agreement with their pilots. This brought great advantages to the pilots and it also held out the hope to the domestic operators that there would be a period of stability in the industry. We still hope that when some of the short term problems that have emerged, and some of the problems associated with the introduction of this legislation, have settled down, these new contracts, which are in the interests of the pilots and also further to a very substantial extent the stability aims of the operators, will bring within the industry a period of peace such as we have not seen over recent years.

The honourable member for Stirling questioned the introduction of this legislation. Of course he knows that what is contained in this legislation was one of the terms of settlement of the recent Qantas strike. The principle was agreed to by the Federation in the terms of settlement, and the legislation was designed to replace procedures which it was shown at the time were not successful. The honourable member for Stirling also quoted some Press criticism of the time taken for the negotiations between the pilots and Qantas. The very fact that the honourable member spoke for 45 minutes or so and spent most of that time dealing with this section of the legislation, and referred in some detail to some of the other matters associated with the contract itself, indicates the breadth of the negotiations which bad to be conducted. What was involved was a change in the whole foundation of the relationship between the pilots and the company, a change in the whole basis of the system. Not only were the principles changed in this contract, but also all the details flowing from those principles. This was obviously a matter for lengthy negotiations which, as I say, we are very pleased to know have now been successfully concluded.

The honourable member also referred to safety considerations. This is a matter which is outside the scope of the present Bill. It is also outside the scope of the contracts, although it does have some pertinent relationship to the matters in question. The honourable member specifically mentioned the situation of Djakarta. The question of the use of the Djakarta airport at the time when the Qantas strike was in progress was introduced as an operational matter. I am sure, to try to distract attention from the claims associated with the origin of the strike, which were basically claims for additional pay and other conditions personally affecting the pilots. But when it was found by the Department of Civil Aviation that there was some doubt in the minds of the pilots - and we had cleared Djakarta airport at that time for operational use by our aircraft in daylight and, under certain conditions, at night - we immediately closed the airport to Qantas for operational purposes. After the strike was over and some work had been carried out in the way of improving aids at the airport, it was reopened. The Qantas pilots agreed that they would be prepared to operate from Djakarta. But while this situation of agreement was being reached Qantas decided that no further flights would be made to Djakarta.

We re-examined the situation there because we are assisting the authorities in Indonesia in the testing of their equipment and we are assisting them to bring the airport up to the high standards which they require and we feel we require. It was then that we took action to close the airport again to operations by our international aircraft, and that is the situation today. We will not allow Qantas to use Djakarta airport at the moment, either by day or by night, even though the Australian Federation of Air Pilots’ is prepared to have its members fly into and out of Djakarta. In other words we in DCA have said that Djakarta will not be used but the pilots have indicated that they would be prepared to use it. I merely mention that matter to show that we place great importance on safety considerations. We will not take any risk of interfering with the safety of our aircraft operations. We are doing our best to assist with improvements at Djakarta. As soon as the airport has reached the required standard, which we hope will not take long, we will again open it for operations by Qantas, and no doubt services to and from that airport will recommence.

The honourable member for Stirling also referred to the present dispute on superannuation. This stems from the practice of the airline operators of basing superannuation payments on the basic rate of pay calculated on 65 hours a month. The pilots claim that the figure should be calculated on a higher basts. This is a matter for dispute between the domestic airlines and their pilots at the present time and I do not want to interfere with the situation because it has now been taken up on an industrial basis. But I thought that as the matter was raised I should merely refer to the change that has taken place in superannuation since the new contracts were agreed to last year and were finally signed by the domestic operators and the pilots a short time ago. Currently superannuation payments will be on the basis of ten times the salary of pilots at the age of 55. Prior to the coming into force of the new contracts, which as I said have only recently been signed by the domestic operators and their pilots, lump sum superannuation payments - and these figures are taken from the circular sent out by the Federation of Air Pilots - for a pilot retiring at the age of 55 amounted to a maximum, based on the previous formula pay system, of $92,000. Based on the present guaranteed minimum salary the figure will be $117,000. So when we talk about this dispute between the pilots and the domestic operators we should know what the figures are.

As has been stated by my colleague, the Minister for Labour and National Service (Mr Bury), the purpose of the Bill is to amend the Conciliation and Arbitration Act to set up a special tribunal to be known as the Flight Crew Industrial Tribunal to deal with industrial disputes in the airlines industry, involving pilots, navigators and flight engineers. There is some special advantage in this for flight crews. There is only one other industry in which such special facilities are provided. At this juncture, I make it clear that there is no possibility of awards or decisions of the Tribunal overriding the Air Navigation Act and Regulations and directions of the Director-General given under that Act. Proposed new section 88zc of the Act makes it clear that the Tribunal, or the person constituting the Tribunal, shall not make an award or certify a memorandum of an agreement that is inconsistent with the law of the Commonwealth or any instrument made or issued under such a law. As honourable members are aware, the Air Navigation Act and Regulations deals with matters concerning the safety of aircraft operations and this Tribunal set up to handle industrial issues could not, and will not, be permitted to interfere in this area.

My colleague has traversed the background leading to the need for this legislation and I believe he has fully presented the facts to the House. He briefly mentioned the strike of Qantas pilots in November-December 1966. Although I believe there would be no real point in my reviving the recriminations and misunderstandings which arose during the course of this dispute, the clear fact which did emerge was that no procedures were laid down which were adequate for handling such a dispute. The operations of Australia’s international airline were severely affected by this strike, causing as it did a complete stoppage of services for a period of 28 days. The strike coincided with the beginning of a peak traffic season and immobilised the entire Qantas fleet. Eight Boeing jets and an Electra aircraft were left parked at other ports outside Australia. Passengers in these aircraft and others booked’ to travel on Qantas services were considerably inconvenienced. Although fleets on some routes were operated on limited frequencies within 48 hours after the strike ended, progressive buildup to normal operations was not completed for almost 4 weeks. The effects of the strike were felt over a much longer period as some of the passenger and cargo traffic diverted to other international airlines was not regained for some time, lt has been estimated that but for the strike, Qantas revenue would have been at least $12m higher last financial year. 1 emphasise the serious effect which the strike had on Qantas operations as a means of underscoring the point that a responsible government must take all reasonable precautions to avoid such a situation again developing. Machinery must be provided for the parties to be brought together and for there to be an arbitrator to make, if necessary, a decision on the matters in dispute. At present, even a dispute about a relatively minor matter can be aggravated to a major issue. Differences of view between employer and employee must be expected as this is the very nature of industrial life. What the Government must endeavour to ensure is that these differences do not get out of hand.

The sole intention of the Government in bringing this legislation before the House is to provide sensible and orderly arrangements for the handling of industrial matters concerning flight crew employed by the various airline companies. What we are seeking is a new start in the conduct of industrial relations between the representatives of the companies and flight crew personnel, and I see no merit whatsoever in traversing in detail the rather sorry history in the post-war period of industrial negotiations concerning flight crew, or in seeking to apportion the blame for what has occurred. The legislation before the House is a genuine attempt on the part of the Government to devise a system under the Conciliation and Arbitration Act which is unique in many respects, but which will allow ample opportunity for negotiation and conciliation. Arbitration will be exercised only if negotiation and conciliation fails. It is an accepted part of industrial relationships that where discussion or negotiation cannot resolve differences between employers and employees, that there must be someone who has the power to make a decision and his decision must be binding upon both parties. The trade union movement and the Opposition have always supported arbitration and it is also accepted by the general community throughout this country. I accept that there may be arguments to be advanced against the method of handling industrial disputes and the stipulated procedures which will lead to arbitration, but it is clear that there is no alternative to arbitration as a last resort.

The unsatisfactory situation which has existed in recent years has, in my view, come about to a degree because members of the flight crew, except the flight engineers, have not been bound by arbitration in the settlement of industrial disputes. Having repudiated the agreement on industrial procedures, mentioned by my colleague, by striking in 1966, the pilots now have nothing laid down about the conduct of industrial relations affecting their salaries and working conditions and the navigators have insufficient members for an organisation representing them to obtain registration under the Conciliation and Arbitration Act. The Flight Engineers Association, being a registered body, is already covered by the Conciliation and Arbitration Act. We therefore are faced with an odd situation which, if allowed to continue, could result in anomalies and inequities in the future.

It is difficult to cite a more significant industry than civil aviation, where comprehensive rules and procedures, including arbitration, to govern industrial relations, could be more important. Industrial problems affecting the flight crew in this rapidly developing and important industry can have disastrous consequences on trade in the domestic and international spheres. It can cause a serious disruption to the speedy delivery of mail and have a very damaging effect on international communications. Despite all this, the Government is not saying in the legislation before the House that members of the flight crew should be brought before the Arbitration Commission with the application of existing machinery applied to them. They are, in effect, being given preferential treatment by the setting up of this special Tribunal which will handle exclusively industrial matters affecting this relatively small group of flight crew personnel employed by the various airline companies. Particular weight has been placed in the legislation on negotiation and conciliation as evidenced by the provision to establish conciliation committees. It is only after conciliation fails that the Tribunal would exercise the power of arbitration. The decision of the Tribunal will have the force of an award of the Commission and, if need be, the sanction provisions of the Conciliation and Arbitration Act can be invoked. I believe this Bill will be widely acclaimed throughout the community and I commend it to the House.

St George

– 1 support the Bill. At the outset I wish to make one or two observations about the honourable member for Stirling (Mr Webb) who in this debate has pursued a line similar to that which he pursued on the legislation concerning waterfront employment. The honourable member is in a vexed situation. With his background in industrial matters he must appreciate the importance of industrial peace. He is in a cleft stick. He has endeavoured to offer opposition to the legislation but he knows only too well that it is the first step towards solving one of the most vexing problems that we have had in industrial relations in this country for many years.

The honourable member suggested that the legislation is one sided. That claim will serve only to exacerbate the situation that has existed in this industry since the early 1950s. He did not lend weight to his arguments by indulging in recrimination for 45 minutes on the floor of the House. We all could pursue this line of argument and let the public judge the issues. We might take it to the High Court, we might take it to a commission or to a tribunal as is suggested in this legislation. If we were to do so we would not get very much more than we have at the moment. We would get only more and more detail. The situation in this industry called for strong action by the Government and the Government is now doing something about the situation. I believe that the honourable member for Stirling in his own mind does not really argue against this measure. He believes in this action. T appreciate his position.

Mr Webb:

– 1 have always argued against penal clauses.


– The honourable member did make a reference to penal clauses. They are no different from the provision in section 31, and in particular the veto which is already in force. The honourable member argued about this provision, but it is no different from other provisions which are already in existence. This type of measure has been accepted in industrial relations for years. The honourable member referred also to registration by the Conciliation and Arbitration Commission. Many of the arguments centre on this point. He made a rather feeble suggestion that because many other unions have contemplated this action, although none has really taken this action, this is justification for what the pilots have done. But the honourable member cannot give substance to an argument of this kind.

Mr Webb:

– Other organisations are registered voluntarily.


– That is right.

Mr Webb:

– This organisation is being declared.


– Other organisations are happy to accept this situation. So why not the pilots? This is a feeble argument.

Mr Webb:

– If these people want to accept it the machinery is there for them to accept it.


– 1 repeat to the honourable member that the whole thought permeating his argument for three-quarters of an hour was sheer vacillation. He was quibbling the whole way through his remarks and dying to sit down to have the thing over and done with. He knew the answer to the problem lay in just one step, that there was one obvious and major step necessary to solve this vexing problem. Honourable members know that the whole situation in this industry has been bedevilled since the early 1950s. This legislation is necessary and in fact is overdue. One might even be inclined to criticise the Government for being so tardy in not bringing legislation forward earlier. But in fairness to the Ministers concerned I should say that they have been trying through every avenue possible to solve the problem. However, it has gone on for years.

This situation might almost be described as a long duel between the pilots and the airline operators. I emphasise the pilots in this regard. The industrial relations between airline operators and other sections employed in the industry have not been marked by the attitude which has been shown by this small segment. If we must bring management in on this subject, I wonder whether the pilots have really considered their fellow workers when they have laid down their conditions so abruptly and arbitrarily on so many occasions. Their action has been unique in this field. There have been no riots, no storming at the gate or bloodshed in the streets. Surely this must be one of the most amazing and long-drawn out conflicts in industrial relations that we have ever seen. Yet it does not seem to have come much to the public notice. The situation in this industry was galvanised to the forefront in December last year by a strike which cost this country many millions of dollars. But the general situation has not been evidenced by the old-time battling in the streets. It has had permeating through it the subtle capacity of very able men on both sides with carefully selected phrases - sometimes phrases which were not very carefully selected - verbal comments and some clever moves, mixed up with some old-time standanddeliver tactics.

In this industry we seem to have got into a sophisticated conflict. At one stage it appeared that wc would be unable to extricate ourselves from the position in which we had been placed. This brings me back to the point that the Government had no option but to bring this legislation before the House. ] compliment both Ministers on the thoroughness with which they have gone into the detail of the measure. In this industry there has been a sickness that has gone on since 1954. This appears to have been the time when the pilots were getting under way as an organisation and were starting to make their presence felt. At that time they were taking action in the Arbitration Court. They met a few setbacks. There were even a few fines and a few rolling strikes. They made the decision at that time to withdraw from registration by the Arbitration Court and they took on a new name, the Australian Federation of Air Pilots. Since then the Federation has avoided the use of the Arbitration Court and later the Conciliation and Arbitration Commission and has sought to deal directly with the airline operators. The inability of the parties to work out their differences has on most occasions called for the appointment of an independent arbiter or tribunal. With the assistance of some quite generous servings of tolerance by the mediators or arbitrators - call them what you will - on some occasions they have been able to work out some solution, but on numerous occasions they have failed to do so. Their weakness seemed to lie in their inability to enforce any agreements which were made and they were hampered by the air of hostility which prevailed between the parties on most occasions. It is to overcome these difficulties and the associated problems that this legislation has been introduced.

Within the legislation the provisions are directed towards eliminating the acrimony by regularising industrial relations in the industry. This is an important industry. It is an anachronism to find that the airline operators should be put in this situation. They have projected Australia to a position in which in standards and in sheer work load we rank fifth in the world. I am not referring to a work load pro rata to population. On sheer work load the airline operators have projected us in the field of civil aviation to the position of fifth in the world. They play an important part in the international field, particularly in drawing foreign exchange to this country. They provide employment for a tremendous work force and scope for tremendous advances in the industrial and scientific fields. Their combined turnover is now between $250m and $300m per year. I believe it is an anachronism that this industry, which has placed Australia among the forefront of world nations, in so many respects is bedevilled by industrial troubles in one segment of its employment.

Mr Curtin:

– Who started it?


– Let the honourable member stand up and give us his idea about who started it. He will finish up with the same conclusion as most people have and realise that this is why the Government has taken this action to provide a tribunal so that someone specialised in this field can give a decision. I am not sure that this matter should have been discussed openly and whether it would not have been better on the whole to have put it aside because we only finish up with long arguments for and against. This measure is an obvious approach for the Government to take. It is proposed to set up this tribunal and to see that all parties are subject to its rulings.

If we were to undertake discussions on this matter I am sure that one thing would emerge. We might not get much more detail, but a few things would become apparent. We would see an organisation of men who have set a standard and price on their services and who are determined to get them and associated benefits, come what may. We would also see airline operators from private enterprise driven by the sheer economic necessity to keep their planes flying, accepting almost any proposition put to them.

One of the operators has been accused of having an attitude in employer and employee relationships similar to that which obtained under the master and servant philosophy of the Victorian era. However, so far, I have seen nobody who has been able to convince me on this point. I shall say more about that later. Also we would see a capable, if somewhat ruthless, organisation of pilots who have played a very adroit game of opportunism in the industrial relations field. They have played a very successful game. Backed by a powerful strike weapon, with a generous leavening of stand-and-deliver tactics, the pilots have avoided arbitration to pick the airline operators off one by one. There is no doubt that out of this situation there has emerged some vindictiveness, some weaknesses, some clever tactics, some truculence and some ruthlessness. This is to be deplored. That is why it is up to the Government to step in and take the necessary action.

Let us have a look at some of the standards that the pilots have set for themselves. Under the new arrangement - the North American contract system - each person is entitled to set a standard for himself and it is then a question of whether the appropriate authorities agree with him. I understand that under the new domestic Agreement the maximum salary for a Boeing 727 pilot by 1968 - ‘and I emphasise the date - will be $16,061, with a guarantee of $12,847. I understand also that whereas at the moment Qantas pilots on Boeing 707s receive a maximum salary of $15,250, under the agreement that the Minister referred to earlier they will receive as from 8th April 1968, when this new bidding system commences, a maximum of $18,429 and as from 23rd September 1968, a maximum of $19,018 with a guarantee of $15,163.

I shall make some comparisons of these figures with other salaries. The DirectorGeneral of Civil Aviation receives $15,000 a year; the Secretary to the Treasury receives $17,500 a year, as do the DirectorGeneral of the Posts and Telegraphs and the head of the Department of Trade. Much is made of the responsibility for safety that the pilot has to undertake. But let us have a look at the salaries of some of the top men in our armed forces. The Chief of the General Staff, who I would think has no less Responsibility for safety than has an airline pilot, receives $15,500 a year; a majorgeneral, who is in charge of a division, receives $11,600 a year; the Chief of the Naval Staff and a rear admiral receive similar figures to their Army counterparts and the Chief of the Air Staff receives $15,500 a year. It occurred to me to find out what the head of our international airline receives. Unfortunately I left it too late to find out what the heads of two major domestic airline operators are paid, but the salary of the head of Qantas is $18,500. Reference has been made to the situation where the servant receives more than the master. This is surely somewhat anachronistic. I gather that Captain Ritchie, who is in charge of Qantas, has had wide flying experience, including service as an airline captain and I have no doubt that since stepping down from active flying he has acquired skills in administration. I leave it to the House to judge the situation. I know where I stand.

In fairness to the pilots, let us have a look at what is required of them. I will outline some of the requirements of the Department of Civil Aviation. A pilot is required to pass examinations in air legislation, air navigation, meteorology and flight planning; possess a flight radio-telephone operator’s licence; possess 2,000 hours total aeronautical experience and 500 hours aeronautical experience on Australian regular public transport aeroplanes, 100 hours aeronautical experience at night, 100 hours instrument time and 500 hours as pilot in command. I might add that Qantas require a pilot to have flown 750 hours as pilot in command and to have had 4,000 hours total aeronautical experience. The Department also requires a pilot to complete an approved conversion course on the aircraft type; complete a training programme within the 90 days preceding application for the licence, comprising at least 150 hours acting in command on regular public transport operations under the supervision of a first class airline transport pilot nominated for the purpose by the operator; complete a flight proficiency test with a departmental examiner or approved check pilot covering general and instrument flight. As I have said, Qantas require additional qualifications. I mentioned that it requires 4,000 hours total aeronautical experience and 750 hours as pilot in command. A third requirement is that the pilots shall complete a training programme of at least 200 hours acting in command under supervision and undergo three flight proficiency tests during this programme.

I am not going to set myself up as an arbitrator on whether the qualifications of an airline pilot are commensurate with those of the head of the Department of Civil Aviation or of the head of Qantas. I will leave it to honourable members to use their discretion. I merely remind them that after September 1968 a Qantas captain will be able to earn $19,018. Honourable members may well ask why 1 chose to compare pilots’ salaries with those of heads of departments. It has come to my knowledge that this comparison has been used by the pilots themselves. They have set this standard as a guideline- and I emphasise as a guideline’ - for fluctuations that may occur from time to time.

I could refer to the Bill in greater detail but I believe that the Minister has covered it adequately. I believe that the whole gastronomies’ of the situation - to use a less vulgar term - lie in clauses 88z and 88za of sub-paragraph (8.) where there is provision for a mediator to make a decision if proceedings break down. This is what we need. But also we need enforcement provisions to see that decisions are given effect. One could emphasise - contrary to what the honourable member for Stirling has said or has failed to emphasise - that the doors have not been shut to individual negotiations with the airlines. But the industry will be kept under surveillance to ensure that there is no *picking off of the airline operators one by one. I believe that the Bill will prevent this type of thing, which is detrimental to the industry. I do not believe that anybody could quibble with this aspect of the Bill because the record clearly shows that restraint is needed and that the operators have been extremely vulnerable. If an operator is forced to close down for one day, who knows what it costs? In the turnover of Qantas I think that a stoppage would cost something like $2m or $3m a day. I imagine that the major domestic operators would be in a similar position. Trans-Australia Airlines would be up for at least Sim. When a company is liable for a loss like that it has only Hobson’s choice. The airline operators have been extremely vulnerable to stand and deliver tactics. The situation calls for some rationalisation of thinking and some injection of independent thinking. The Government has laid down that the conduct of airline operations is a specialised field. There is provision for airlines to be maintained in a specialised field because of the idiosyncracies of this particular segment of industry.

I am not going to detain the House any longer except to say that the rest of the legislation is ancillary to proposed new section 88za. The whole of the provisions in the Bill are well presented but I believe that that proposed section ties up the whole situation. No doubt it could be said that the legislation ought to be well presented because of the years of experience possessed by people who have investigated this field. This applies particularly to the Department itself. I compliment all concerned on the construction of the Bill. I support the measure and I am certain it will achieve the results that everyone desires, even if there is a rather difficult period before the end result is achieved.


– The Opposition has cast itself in a somewhat peculiar role in this debate because although in the person of the honourable member for Stirling (Mr Webb), who is sitting at the table, it has announced that it is going to vote against the second reading of this measure, the fact is that with the singular exception of the honourable member for Stirling no other member of the Opposition has risen with an attempt at coherent argument. Perhaps that in itself is a fair commentary on the paucity of argument available to be used against this Bill. It seems to me that the honourable member for

Stirling adopted an approach which was not altogether helpful. I do not think it is useful to do what he sought to do, namely, to canvass the question of principle that is involved in this measure by rehearsing and regurgitating the merits or lack of merits of the contending parties in various industrial matters that have stricken this industry over the years. I do not believe that is a useful approach at all. There is an important principle involved in this matter.

Mr Webb:

– The Minister adopted that attitude himself.


– No, he did not, as I will show in a moment. In saying that, the honourable member for Stirling fails to observe a very critical distinction to which I will refer in a moment. The Minister for Labour and National Service (Mr Bury) in his second reading speech scrupulously refrained from canvassing the merits of the industrial issues which have arisen over the years between the pilots and airline managements. What the Minister did - I believe it was perfectly legitimate for him to act in this way and I support what he did - was to look at the conduct of the parties in the various negotiations which have taken place both prior to and after the formation of the Industrial Relations Procedures Agreement in 1965. He did this for the purpose of demonstrating that this Bill was necessary on the ground that past history has shown that there is no reasonable prospect of attaining peace in this industry unless the airline pilots are brought back under the umbrella of the arbitration system from which they departed in 1959 when they deregistered their industrial organisation.

In the remarks 1 propose shortly to make to the House 1 shall refrain scupulously from examining the merits of the industrial claims that were made by the pilots over the years from 1959 or 1960 up to the present time. To do that casts no real light on the question of whether or not this measure is a justifiable one. Many people have said that in the various industrial disputes involving pay claims and so forth that have raged in this sorely troubled industry over 7 or 8 years, there was fault on both sides. This might be so. However, we should not try to rehash old fights. In my view there can prima facie be no objection in principle to a government allowing an industry, however important it may be to the commercial and economic life of the community, to work out its industrial issues and industrial disputes by private negotiation subject always, however, to the observance of important conditions. The first condition is that, if the Government is going to permit attempts to settle industrial disputes in a nationally important industry by collective bargaining, there must be reasonably effective machinery for enabling that bargaining to take place. There must be machinery based upon private contract. That is the first condition that is necessary to be fulfilled in this connection.

The second condition is that the Government should be satisfied, viewing the conduct and performance of all the parties under any such private contract for direct negotiation, that the parties have manifested a willingness to adhere to the machinery that they have laid down. It is no use having a private contract for direct negotiation between contending parties in an important national industry if the bargaining is likely to be broken down by the unwillingness of one or both of the parties to adhere to the contractual arrangements for negotiation. What is the history in the airline industry on this score? Unfortunately, it is a very chequered history. As I mentioned earlier in my speech, the Australian Pilots Association deregistered itself in 1959. Of course, it was perfectly entitled to do so. No-one can criticise the Association for taking that step. I do not think that it is at all useful to examine the motives which moved the Association to do so. That is water under the bridge. The Association was acting within the law. Following this action by the Association a new body was formed - the Australian Federation of Air Pilots. The history of the industry over the following years from 1959 to 1964 or 1965 was a most unfortunate one. Ad hoc bargaining was carried out to write new contracts. There were strikes. 1 remember one was a rolling strike involving various airlines in succession. There was a sad history of discord and disputation.

Then in 1964 the parties got together - that is to say, the Australian Federation of Air Pilots and the airline interests. Over a period of some 12 months they hammered out - and it was no easy task - an agreement on industrial relations procedures which was signed on 27th September 1965. The point I want to make is this: If that agreement had proved in practice to be a workable agreement, if both parties could be shown to have adhered to its procedures, then there would not be much of a case, so some people would argue and I would admit to there being force in the argument, for introducing a measure of this kind. But the unfortunate fact is - and here 1 criticise not the pilots themselves but their militant and extreme leaders - that there followed as a result of the activities of the leadership of the pilots a number of events, which on any objective view, served to demonstrate that the time for collective bargaining, pure and simple, in this industry, as a means of settling industrial disputes, was over. By all means let us encourage conciliation, as this Bill does. But the history of the past few years - the years between 27th September 1965 and the present time - demonstrates quite adequately and beyond any room for argument that no government with a sense of responsibility could continue to leave the air pilots outside the scope of the compulsory arbitration system that is enshrined in the Conciliation and Arbitration Act.

Now 1 briefly seek to tell the House why that proposition is well founded. In July 1966, following negotiations which commenced in May, the Australian Federation of Air Pilots extracted from the airline companies, under threat of an immediate strike if their full demands were not met, a substantial rise in salaries. That was the fust substantial breach of the industrial relations procedure agreement. It was a breach because that agreement contained a clause which I think is worth reading to the House. Clause 11 (c) stated:

The Federation undertakes to suspend the right to strike or to impose any other limitation upon work while a matter is under negotiation or inquiry in accordance with the procedures of this Agreement and during the period of 7 (lays after the conclusion of any conference referred to in clause 9 (d).

To do what the Federation did in July 1966 - to announce during the course of negotiations for a pay increase that unless its demands were met in full it would then and there immediately go on strike - was a plain breach not only of the spirit but of the letter of the agreement on industrial relations procedures. If one of the parties to such an agreement as this says: I undertake to suspend my right to strike while any matter is under negotiation’, he says two things. First of all he says: ‘I will not actually go on strike; but implicit in the undertaking which I have just given is a promise that I will not use my power to strike to extract a concession on a stand and deliver basis’. Regrettably that was the first breach of the agreement on industrial relations procedures. It occurred in July 1966.

The country did not have to wait long before there was another breach. It occurred only a few months later. Before I proceed to deal with that breach, let me inform the House that I have in my hand a Press statement that was issued by the Federation of Air Pilots in which it sought to set out the grounds upon which it opposed this Bill. It has opposed it today by means of the advocacy of the honourable member for Stirling. But it has not relied only on his powers of advocacy. It has issued a Press statement. Its rather lame answer - in fact it is a response rather than an answer - to the suggestion that it, the Federation, committed an essential breach of the agreement on industrial relations procedures in July 1966 was to say: ‘It was not much of a breach because an inquiry had been carried out by a board of inquiry which recommended an increase in salary of 15% to pilots. We got that 15% and another H% as well. There was a breach, tout it was only a little one’. That was a very unimpressive response. It sought to make some sort of confession and avoidance. But it was a plain breach which occurred in July 1966.

The next substantial breach, which was fraught with very grave consequences to the country as a whole, arose in NovemberDecember 1966. There can be no doubt that the Federation called its men out on strike while negotiations were proceeding in relations to matters which were in dispute between the Federation and Qantas. In this Press statement issued by the Federation recently, a copy of which I have in my hand, at least it does not seek to deny that the November-December strike was a breach of the agreement on industrial relations pro cedures. I am glad to say that it did not have the hardihood to go that far. Both Ministers who spoke in this debate, the Minister for Labour and National Service and the Minister for Civil Aviation (Mr Swartz) dwelt, becomingly so, upon the tremendous detriment to this country from the Qantas strike. I will not traverse those facts again.

Now we come to the present time and find that the Federation of Air Pilots has imposed a limitation upon the flying hours of its members because of a dispute that has arisen concerning superannuation. The position at the present time is that two major domestic airlines are in dispute with the Federation concerning superannuation contributions for pilots. The Federation leadership has imposed a limitation of work on its members as a weapon towards achieving a solution favourable to the Federation members. Its members are enjoined to work no more than 65 flying hours per month. That again is a clear breach of the Agreement on Industrial Relationships Procedures, to which the Federation remained bound vis-a-vis the domestic airlines. It is true that, so far as the Federation and Qantas were concerned, the Agreement came to an end as a result of the November and December strike, but the Agreement remained on foot so far as the domestic airlines and the members of the Federation were concerned.

The Federation, I regret to say, has been less than half truthful in answering the charge that the present limitation of work is a breach of the Agreement on Industrial Relationships Procedures. In the Press statement it seeks to treat the clause of the Agreement that I have read as imposing merely an obligation not to exercise the right to strike. The Press statement is eloquently silent on the fact that the clause also prohibits the Federation from imposing a limitation of work.

The next matter of some importance to which I want to refer is this: In the Press statement issued by the Federation on 20th October over the signature of Mr B. I. Crofts, we find a paragraph which refers to a letter that the Federation received from the Department of Labour and National Service dated 20th June 1967. The Press statement purports - I emphasise the word ‘purports’ - to set out the relevant substance of the letter. Paragraph 4 of the statement reads:

The Minister made reference to the current dispute between the domestic airline and the Federation and implied this was an example of the Federation’s refusal to accept formal procedures for the resolution of disputes. The fact of this matter is that it was originally suggested by the Federation that the issue involved should be resolved under the provisions of the Industrial Relationships Procedures, Discussions were held, at the instigation of the Federation, between the Department of Labour and National Service and Airline Operators and on 20th June 1967 the Federation was advised by the Department of Labour and National Service-

I give the words that are in quotation marks in this paragraph of the Press statement, purporting to set out the text of the letter. They are:

It is the view of both companies-

That is TAA and Ansett-ANA: that this superannuation matter does not come within the ambit of clause 4 (d) of the Procedures Agreement, as you had proposed and that it is not a matter that should be dealt with under the Industrial Relationships Procedures.

We can see from that paragraph what the Federation was trying to do. It was seeking to convey the impression that the reason why it was not in breach of the Agreement on Industrial Relationships Procedures was that the airline companies had themselves denied the applicability of the Agreement to the dispute. The Federation was arguing on the basis of the extract from the letter from the Department of Labour and National Service, which is set out in the Press statement, that it was justified in imposing the limitation on flying hours because the airline companies had denied the application of the Agreement to this situation.

That was much less than truthful, because the Federation regrettably omitted to add to its Press statement - it should have been added to give the true picture - that the letter which contained the extract quoted in the Press statement also contained immediately below it another relevant paragraph. The letter was written by Dr Cook, a senior official of the Department of Labour and National Service, to Mr Crofts. I read from a copy of the letter. Dr Cook also said:

In these circumstances I think that you would be entitled under the Procedures Agreement to seek a decision of a mediator, under clause 5 (b), to determine whether this ls a matter that could be processed under the Procedures.

Of course, in saying that, Dr Cook was completely accurate. Why did the Federation, one may ask, omit to quote that paragraph? It omitted to do so because it wanted to create, as it did create by this Press statement, a thoroughly false impression of the situation.

The position was as Dr Cook put it in his letter. If the airline companies took the view, as they did, that the superannuation issue did not fall within the scope of the Agreement on Industrial Relationships Procedures, the Federation had a right under the Agreement to have the question of the applicability of the Agreement to this issue determined by a mediator. The position was that, until the Federation had exercised its right to ask for a mediator to determine the issue, it was bound under the Agreement to desist from any reliance on the right to strike or on any limitation of work, which is the relevant part in this context. That is why I say that the Federation has been regrettably lacking in frankness. It has been regrettably untruthful in the presentation of its case against this Bill. After all the only case we have heard against the Bill today in the House is the Federation’s case put by the honourable member for Stirling.

The position with which the Government has been faced is that the Agreement that was optimistically thought on all sides and by the Government to open a way for the amicable settlement of disputes in this vital national industry is unworkable. It has been proved to be unworkable because of the attitude of one of the parties, which is: ‘If we do not get exactly what we want exactly when we want it, the airline industry can stand and deliver because we will rely upon our right to strike. We will rely upon our right to paralyse the industry at one blow.’ In those circumstances there is every justification for the step that has been taken and which is enshrined in the Bill of bringing the airline pilots and other members of air crews whose working conditions are necessarily related to the conditions of pilots back within the ambit of the Conciliation and Arbitration Act. If this Agreement had been kept there would have been no need for this measure, and that would have been very good. But the Agreement has not been honoured by the Federation and it therefore has no legitimate ground for complaint in the action that the Government has taken.

Minister for Labour and National Service · Wentworth · LP

– in reply - Mr Deputy Speaker, I must say at the outset that it greatly surprises me that the Australian Labor Party opposes this measure. Ever since 1904, parties on both sides of the Parliament have been working towards developing, reshaping and improving our conciliation and arbitration system. Labor, when in office, has continued this process of evolution. Many members of the Labor Party, in one place or another, recently have voiced a number of criticisms of penalties. It is noteworthy that successive Labor governments have maintained these penalties. Clearly, an enforcement process is unhappily sometimes necessary. Indeed, it is essentia] to the balance and working of the arbitration system.

Mr Webb:

– We have always opposed sections 109 and Ml of the Conciliation and Arbitration Act.


– In this specific form? I am referring to the general matter of the imposition of penalties. If a means of enforcement is not provided, the whole structure collapses. It must be remembered that penalties fall also on employers who, in certain circumstances, can go to gaol for not conforming to orders issued by the Commonwealth Conciliation and Arbitration Commission. The Commonwealth Industrial Court, which imposes penalties, has been, still is and will continue to be the place of last resort.

The history of recent years in the airline industry has been one of continual efforts by Minister after Minister and others associated with the industry to develop some kind of means to settle disputes without disrupting the whole community. The honourable member for Stirling (Mr Webb) rather complained that certain conditions would not be enforced because of the public interest. I remind him that the public interest is vital. It is at the very root of this Bill. Curiously enough, the honourable member went on later to quote Mr Justice Higgins, who always placed considerable emphasis on the public interest. This measure is necessary because of the steps that have been taken by the Australian Federation of Air Pilots over a period to remove themselves from the conciliation and arbitration system. Fundamentally, this measure, which provides for about 2,000 persons, will put them on the same footing as the vast bulk of about 1 million other workers who are covered by the conciliation and arbitration system. If this system is appropriate for the settling of industrial disputes in other fields, why should it not be capable of adjustment to permit the settling of disputes in the civil aviation field?

I must challenge some of the comments that the honourable member for Stirling made. If I may say so, he gave a very one-sided account, which was based virtually on the standpoint of the pilots alone. He mentioned the recent negotiations with Qantas Airways Ltd and the pilots’ threat to walk out. This threat having been delivered to me orally, I can assure the honourable member that it was no joke and no myth. Because of the fundamental tactic of the Federation of Air Pilots that those opposed to it must stand and deliver, it has been virtually impossible to contain the Federation within the procedures worked out. In effect, the Federation says: Capitulate or else’. This has happened not once but on a whole series of occasions. What has been the effect on the public? In direct breach of the agreement on industrial relations procedures, the Qantas pilots last year, before exhausting those procedures, served an ultimatum on their employer and went on strike. They grounded Australia’s international airline for 27 days. For part of that period, there was no means of bringing the parties together. We were just flapping about in a vacuum. What resulted from this? Apart from destroying the wonderful profit earning record of a very great public institution, the pilots’ action caused numerous Australians all over the world to be stranded. The loss in trade and business connections was immeasurable, quite apart from the huge direct loss to Qantas. This is something that can be repeated at any time.

The honourable member for Stirling pointed out, quite rightly, that ultimately we cannot deprive people of the right to strike. But we can provide machinery to bring the two parties to a dispute together when they are wide apart. This is done by the lengthy process of conciliation and negotiation in which both sides have an opportunity to state their case. There is provision for a decision to be made by some authority if, by the time the end of the road is reached, the two parties are not in agreement. This is the whole purpose of the Bil). The honourable member for Stirling referred to what he described as the tools’ that we have already. I was most surprised at his description of sections 30j and 30k of the Crimes Act as machinery already at our disposal.

Mr Webb:

– I did not suggest using them, though.


– That is so, but the honourable member pointed to them as examples of the kind of machinery that was available. Not only the whole Labor movement but also many other people recoil from provisions like those. They are invoked as a last resort when nothing else can be done and people are utterly unreasonable. But it seemed to me somewhat extraordinary for the honourable member to point to these sections of the Crimes Act as being available and to rely on their existence as a reason why the proposed Flight Crew Officers Industrial Tribunal should not be constituted. Air crews are not among those who are likely to be downtrodden. In fact, their conditions of employment, their remuneration and the other benefits that they enjoy are better than those of any other group in the country bar none. I am surprised that these people have won so much solicitude despite their behaviour over a considerable time - behaviour of which I have had considerable direct experience since I took over the Labour and National Service portfolio. Captain R. T. Holt, retiring President of the Australian Federation of Air Pilots, in a speech that he delivered recently at the eighth annual convention of that body, set out some of the things that have already been achieved on the national front, quite apart from those that are being demanded now and may be demanded in the near future. The figures that be set out in a table presented in conjunction with that speech show that in 1968 a senior captain of a domestic airline will be paid at the rate of $16,061 per annum and, at the other end of the scale a senior flight officer will receive $9,914 a year. The remuneration for the pilots of Qantas, the international airline, is on a higher scale. Captain Holt, in a comment accompanying the table, stated:

Looking at an aircraft such as the DC3 which was with us in 1946 and still is, we see an im provement in the maximum achievable salary of 603%. The 1968 maximum achievable salary agreed for the B727 captain in the national scene is 892% of the maximum achievable rate for the top captain in 1946! The movement in community salary from 1946 to 1967 is estimated at 335%.

The figures are striking - increases of up to 892% for pilots compared to 335% for the rest of the community. It is obvious that in many cases increases well above those recommended by an inquiry have been achieved by the ruthless use of the considerable bargaining strength of the pilots. The honourable member for Stirling mentioned that a number of people and trade unions, particularly the very strong ones, increasingly were calling the arbitration system into question in favour of collective bargaining. If we examine this proposal closely and analyse it, obviously it is recommending the law of the jungle as against a system which has been evolved over half a century. I am glad to say that the honourable member ultimately expressed his belief in conciliation and arbitration rather than in this means.

With this stand and deliver attitude, with no other means of settling a dispute, the public is the inevitable victim. Last year an agreement was achieved by domestic air crews. Although the resulting increase in the costs of a flight crew cannot yet be seen firmly and reliably, the general picture indicates an increase of upwards of 40%. The result has been two increases in public air fares. Let us consider the question of public interest. If it were not for the public interest, this Bill would not be before the House. It is not a sudden measure, dropped suddenly from above. The measure derives from earlier and recent experience which I have had myself, first of all with domestic airlines and during the Qantas dispute. I made it quite clear to the Federation of Air Pilots that as a result of the course of conduct that occurred I would do my best to introduce certain legislation. This Bill has been carefully drafted over a long period. It was a massive job.

What would happen if this legislation were not enacted? We would look forward to a period of bargaining from a position of strength. Almost before the ink dries on one agreement fresh demands are made. Not only would some airlines, which cannot afford not to fly, be put over the barrel but the general public would be put over the barrel. We should think about this possibility. A serious problem confronts our society. Why should small groups of highly paid people be in a position to jack up the rest of the community and put it over the barrel? The pilots are doing this today; and other people could do it tomorrow. How has their superiority been so established that these tall poppies should be above and outside the arbitration system to which every other worker in Australia is subjected? A senior captain in the domestic field enjoys a salary of $14,000 a year. According to a recent report of the Commissioner of Taxation there are in Australia about 20,000 people who enjoy an income of this size. We have 4,600,000 taxpayers in Australia, so the people who receive an income of $14,000 and over represent less than 1%of all taxpayers. Why should persons in that limited group continually and repeatedly put the community over the barrel? Why this great solicitation to keep them out of a system which governs most working folk in Australia?

Question put:

That the Bill be now read a second time.

The House divided. (Mr Deputy Speaker - Mr E. N. Drury)

AYES: 63

NOES: 31

Majority . . . . 32



Question so resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

Motion (by Mr Bury) put:

That the Bill be now read a third time.

The House divided. (Mr Deputy Speaker - Mr E. N. Drury)

AYES: 63

NOES: 31

Majority . . . . 32



Question so resolved in the affirmative. Bill read a third time.

page 2359


Ministerial Statement Mr HASLUCK (Curtin - Minister for External Affairs) - by leave - 1 wish to report briefly to Parliament on my visit to North America. The primary purpose of my visit was to lead the Australian delegation to the General Assembly of the United Nations, and during the two weeks I was in New York I had the opportunity of having discussions with the Ministers and representatives of many other nations, as well as with the President of the General Assembly, the President of the Security Council and the Secretary-General. I also paid a visit to Washington, where I had discussions with the President, the Secretary of State, the Secretary of Defence and other advisers of the United States Government, and with a group of members of the Senate Foreign Relations Committee. I had the honour to be received on the floor of the Senate and to hear a complimentary speech delivered by Senator Lausche on the value of the close relationships between the United States and Australia. Later I visited Ottawa for discussions with the Canadian Minister for External Affairs.

As the United Nations General Assembly is still in session I will not attempt at this stage to review the items on its agenda, for most of these items are either still under discussion or awaiting discussion. I believe, however, that Parliament should have from me as early as possible the assessment I made on the situation in Asia from the discussions I had. 1 will speak mainly on Vietnam. The point I made as firmly as I could to the General Assembly was that what Australia is doing in Vietnam is done by its own decision to support South Vietnam, both because of the principles at issue and because of the Australian view of the needs of both regional and global security and peace. I said that the principles which we were seeking tb maintain there, in resisting aggression, were the same as we had upheld in two world wars in Europe. I asked the free nations of Europe: Were we right to stand up for those principles in Europe but wrong to stand up for them in Asia? Or are force, subversion, terror and direct assaults on liberty to be recognised when they threaten a community that has settled down to the stability of a long-protected security but not to be seen when they disturb a struggling people who are still beset by fear? I tried to emphasise again what has been a constant theme in Australian foreign policy for some years, that the danger in Asia is a danger for the whole world, and especially for all smaller nations, and that the opportunity that is rising in Asia is a chance for good for the whole world.

As the result of my discussions in Washington and New York, many of them held at the highest level of confidence, I am able to report to the House on the improved military outlook in Vietnam. Honourable members will be aware that allied strategy in Vietnam has three elements - the ground and air campaign in South Vietnam; the revolutionary development, or nation building programme; and the air operations against North Vietnam.

A careful assessment of the facts leads to the clear conclusion that the military situation in South Vietnam is moving steadily in our favour. The main units of the enemy in the demilitarised zone and in the parts of Vietnam near the Cambodian border still present a threat. Vietcong terrorism continues with an average of 230 South Vietnamese civilians assassinated and 300 kidnapped in each month of this year. Largescale Communist infiltration and forced recruitment go on. That is one side of the picture. But, on the other hand, the combat power of the free world grows steadily greater. A vast logistic base for its operations has now been substantially completed. Enemy main units are being contained with ever greater losses. The proportion of population under enemy control steadily declines. Enemy loss rates are about 50% greater than they were a year ago.

It is worth bearing in mind that the full weight of the allied military effort in Vietnam is only now beginning to be felt. In 1965-66 the allies were engaged mainly in building up their forces and in harassing operations to keep the enemy off balance. In 1965 there was only one deep-water port; now there are six. There were only three airstrips capable of accommodating jets; now there are eight. It is only in the last twelve months that the allied forces have been applying strong pressure on the ground, and that military campaigns of real significance have taken place.

Let me make a review zone by zone, moving from the north towards the south. Starting in the north, in Tactical Corps Zone I, the North Vietnamese, operating from within and above the demilitarised zone, are able to deploy major combat forces and logistical support but whenever they have attempted to launch large-scale attacks from this area they have been defeated with heavy losses. For the first time in many years commercial and military traffic can traverse the 235 miles of highway from the demilitarised zone to the border of the Second Corps Zone. Some 5t% of the population of the First Corps Zone is now under the Saigon Government’s protection and influence compared with 35% a year ago.

In the Second Corps Zone, moving southwards, no North Vietnamese division or regiment has launched a successful operation since the middle of 1965 and enemy losses since then have been ten times those of friendly forces. Some 90% of the important highways are now open; not one was open in 1965. The proportion of population under Vietcong control has now fallen from 50% to 11%.

In the Third Corps Zone a large part of the Vietcong infrastructure is intact and Vietcong hard core elements continue to press their terror campaign, but the situation is becoming steadily better. The number of enemy killed, captured and defecting has risen from 900 a month in 1966 to over 2,000 a month this year. Those responding to the ‘Open Arms’ appeal are coming in at H times the rate of last year. Over 60,000 acres of jungle have been cleared and nearly 1,000 miles of roads have been built or upgraded to carry heavy military loads, facilitating the deployment of allied mechanised forces to areas previously remote. Fourteen new or upgraded airfields provide new combat and supply mobility.

In the Fourth Corps Zone, where the burden is carried almost exclusively by South Vietnamese forces, the incidence of activities initiated by the Vietcong has dropped to approximately 70% of the 1965 average. Already this year the number of Vietcong who have rallied to the Saigon Government is twice last year’s total, although only nine full months of this year have expired. The security of land and water routes has improved. One outstanding element in all this improvement is the growing effectiveness of the South Vietnamese forces.

J turn now to speak of the revolutionary development programme. Foundations are being laid on which the work will proceed with increasing success as the military and economic situation improves. Already 29,000 cadres have been trained, nearly half of the target of 60,000 cadres who are to work in 1,000 teams. One sign of the success of this work is the persistent efforts of the enemy to disrupt it. Nevertheless, a substantial proportion of the South Vietnamese forces are now assigned to give security support.

I turn now to the third element in our strategy - the air operations over North Vietnam. These are carefully limited to military targets and war-supporting installations and activities and most of the effort is directed against the flow of men and supplies into South Vietnam. As a result of this activity approximately half of the country’s war-supporting industry has been destroyed, many of the country’s military complexes have been attacked and a heavy toll taken of trucks, rolling stock, boats and barges. Repair, reconstruction and dispersal programmes are consuming increasing human and material resources which would otherwise contribute to the Communists’ combat capability in South Vietnam. It is estimated that between 500,000 and 600,000 men have to be diverted to such activities. The reduced flow of supplies limits the number of units which can be supported in the south and also the level of their activity. The North Vietnamese war effort, like any war effort, is a product not just of arms and supplies, whose importation we can only partially curtail under the restraints that limit our bombing, but also is a product of manpower, morale and a functioning economy. These are all showing the effects of the bombing.

Where then do we stand? Today North Vietnam is paying a tremendous price for its aggression, with nothing to show in return. South Vietnam, despite continuing suffering and trials, is making progress on all fronts - military, political and economic. The war is by no means over but it is not at a stalemate. The immense build-up in strength and the logistic preparation give today a capacity to increase pressure at all points. In short, we are steadily winning the war.

What does winning it mean? I discussed this point with our allies. As on previous occasions I was able to review the many and various attempts that have been made by the allies both publicly and in private to bring about a cessation of hostilities, or discussions that might lead to or bring about either a cessation of hostilities or peace talks, or even that might bring an initial response from Hanoi that could encourage and justify further moves towards such ends. Australia has kept closely in touch at all times with the various efforts made and has been ready at all times to help advance those efforts for peace. But the sad and stark fact is that up to the present there has been no response from Hanoi. North Vietnam still appears determined to try to force a military solution. Apparently it has not yet realised that it cannot do so and unfortunately it is probably being encouraged in its illusion by the demonstrations and declarations by minority groups in the allied countries who, for one reason or another, call for what may seem to them to be peace but what is in effect an unconditional surrender by the allies to North Vietnam.


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


– I am about to use a sentence which I trust the honourable member for Wills, above all others, will take to heart and ponder. I say that hostilities are being prolonged by every action or word that encourages Hanoi to believe that eventually the allies will grow tired, give up and go home. Hostilities will be shortened if we can convey to Hanoi in unmistakably clear terms that they will not be allowed to impose their will by military force; that the only solution is a political solution; and that our purpose is not to destroy them or to impose a rule on them by force but to move towards a negotiated settlement. If they could get that into their minds hostilities could end. It is a sad paradox today that the placards hoisted in the name of peace are in fact encouraging the continuation of the war.

In popular discussion in North America, and in debates in the General Assembly, as well as in Australia, the question of air operations against the North has become very prominent. Clearly, Hanoi wants the bombing to stop because that is a form of military activity that is successful against them. One can understand Hanoi’s problem. This is a military activity which is hurting. They would like it to stop. It would help them to achieve their purpose of gaining a military solution in South Vietnam if the bombing did stop. There are some of those in this country who say Stop the bombing’ who seem to be serving the same purpose. They either want Hanoi to succeed or, more probably, they do not think that it is important enough that we should stop them from winning. They either favour Hanoi or, more likely, they misread or cannot recognise the great issues of peace and security that are at stake in Asia. There are others, however, who link a cessation of bombing with a hope of negotiation. They say: ‘Stop the bombing and Hanoi will talk’. They argue that bombing can be used as an inducement to negotiate. It will be used as an inducement not by doing it but by not doing it.

Surely those who say that bombing should cease in order to bring about talks ought to be able to point to some indication that the cessation will in fact lead to a process of peaceful settlement. At present there is no such indication. Some speakers have expressed hopes; some have made reports about what they have heard. I have myself explored the grounds on which such hopes and reports were based. I have discussed them both with the leaders of the allies and with the neutralist or non-aligned spokesmen who have uttered them. All the resources available to my Department have been used to ensure that we do not overlook any significant word or gesture. As at the present moment I know of nothing that would support the hope that Hanoi would respond to a cessation of bombing by a readiness to have discussions and, indeed, the signs show rather that Hanoi would regard a cessation of bombing as a military gain for North Vietnam.

Hanoi is the only authority that can say with certainty what would happen if bombing stopped. South Vietnam and its allies have declared their readiness to enter into negotiations without conditions, or to discuss the conditions in which negotiations might be opened. The Government of the United States has offered to stop the bombing as a first step towards negotiations, provided that some reciprocal gesture is made or some reciprocal restraint is observed by the other side. We will continue patiently on that course. But I submit we would be false to the cause we are upholding and to those who are dying for that cause if we carelessly discarded an effective military activity. Back here at home a pause may soothe the feelings of those who abhor suffering; up there in Vietnam a pause means more munitions, more men, more weapons and a restored military advantage to the enemy to endanger the lives of our own soldiers and to augment terror and assassination throughout the countryside.

Under the shield of improved security in South Vietnam progress towards representative government continues to be made. The process of forming a constitutional government was carried another stage this week with the elections on 22nd October for the Lower House. A total of 1,172 candidates ran for 137 seats and the number of voters who went to the poll was approximately 4.3 million, or 74% of the enrolment. As a result of that election and the previous elections the Republic now has a .bicameral legislature and an elected President and Vice-President and the Cabinet is in process of formation. We will all watch, I am sure, with close attention and sympathy, the way in which the new government grapples with the immense tasks of establishing a constitutional rule. South Vietnam, a war-torn country, is attempting one of the greatest political advances that has been planned in any of the former colonial territories of Asia - and perhaps of the world - since they gained their independence. This is surely something that should attract the support and goodwill of all who espouse human freedom.

The Prime Minister (Mr Harold Holt) has asked me to represent Australia at the inauguration of the President and the celebration of national day in Saigon next week and I trust that I can carry with me, without a single dissentient, the good wishes of all members of this Parliament to the government and the people of this infant republic in their establishment of democratic rule in their country. The people whom we are supporting are declaring by their ballots their faith in their own future.

While overseas, in Washington, in Ottawa and at the United Nations headquarters I was able to discuss many other aspects of current affairs with which Australia is closely concerned, both to explain the Australian view and to gain information and to improve the Government’s understanding of other viewpoints. This evening I will not traverse all these matters on this occasion for I believe that I should concentrate in this statement on the issue in which as a nation we are most vitally engaged; an issue that confronts the Australian people today with a need to make an immediate choice between policies; and an issue which the Government at least believes is of vital importance to the present and future security and welfare of Australia itself. I present the following paper:

Vietnam - Ministerial Statement, 26 October 1967- and move:

That the House take note of the paper.

It is the intention and the hope of the Government that if the Opposition should so wish a debate could follow on a future day.

Debate (on motion by Mr Barnard) adjourned.

page 2362


Bill - by leave - presented by Mr Barnes, and read a first time.

Second Reading

Minister for Territories · McPherson · CP

– I move:

That the Bill be now read a second time.

This Bill makes it possible for Nauru to cease to be a Territory of the Commonwealth administered under United Nations Trusteeship by Australia, Britain and New Zealand and to become an independent country. Though the terms of the Bill are simple, the effect of it is of central importance to the future of the Nauruan people and thus will be regarded by this Parliament as of great significance.

Australian responsibility in connection with Nauru began in 1914. It was then a German colony and was occupied by an Australian expeditionary force. The island has been administered by Australia since that time, first under military administration, then under League of Nations mandate in association with the governments of Britain and New Zealand. The arrangements made after the first World War, as well as providing for administration, vested the title to the phosphate deposits - the rights to which had been purchased by the three Governments from Pacific Phosphate Company - in the British Phosphate Commissioners, who were appointed by the Australian, British and New Zealand governments respectively.

In 1942 Nauru was occupied by the Japanese. During this period most of the industrial plant and buildings and all the houses were destroyed. In 1943, 1,200 Nauruans were removed to Truk Atoll in the Caroline Islands. In September 1945 the Australian Forces returned to Nauru and on 31st January of the following year the survivors of the Nauru people who had been taken to Truk Atoll returned to their home. At the commencement of the occupation there were just over 1,800 Nauruans. At the end of the War their number had been reduced to 1,280.

In 1947 the United Nations approved a trusteeship agreement under which the administering governments placed Nauru under the trusteeship system established by the United Nations Charter. The governments of Australia, Britain and New Zealand were designated as a joint administering authority and by agreement between the three governments Australia continued to exercise powers of legislation, administration and jurisdiction in respect of Nauru.

Under the trusteeship agreement Australia and the other two governments undertook to promote the political, economic, social and educational advancement of the inhabitants of Nauru and their progressive development towards self-government or independence as might be appropriate to the particular circumstances of the Territory and its people and the freely expressed wishes of the people concerned. When the provisions of this Bill become fully operative that trust will have been discharged.

I believe that Australia and the other administering governments can take proper pride in the administration of Nauru and in the way in which this trust has been discharged. The Nauruan population has grown from 1,280 in 1946 to about 3,100 now. An account given of the administration by the last United Nations Visiting Mission includes these conclusions:

The proceeds of the phosphate operations cover all public expenditure. Thanks to the phosphate, this tiny island lost in mid-ocean has houses, schools and hospitals which could be the envy of places with a very ancient civilisation. Its citizens pay no taxes. Because of these favourable conditions and the spirit of mutual assistance characteristic of the inhabitants, poverty is virtually unknown in Nauru. There is a high standard of living: necessities and even many luxuries are imported. The stores and shops are well stocked with goods. Few people walk in this Territory, which has an area of Si square miles and a circumference of 12 miles.

But the Mission found that the advantages the people enjoyed were overshadowed by the problem of the future. What was to happen when the phosphate deposit’s had been worked out as they will be at some time during the 1990’s. Efforts to find the most satisfactory solution to this problem have engaged the attention of the administering governments and the Nauruan leaders for many years. After unsuccessful attempts to find in the South Pacific a suitable island which could be made available as an alternative future home for the Nauruan people, in 1960 the governments offered re-settlement on favourable terms to the Nauruans as individuals and families in Australia, Britain or New Zealand. This offer was not accepted as the Nauruan leaders saw it as leading inevitably to the dispersal of the Nauruan people and the disappearance of their identity as a group.

Subsequently, in 1963, the Nauruans were offered Curtis Island in Queensland as a future home. They were offered a considerable degree of local autonomy as a community but this offer also was refused because the Australian Government could not agree to the request that Curtis Island, which is practically a part of the Australian mainland, should be established as a sovereign, independent new Nauru. The Nauruan people then decided that their future should be to remain permanently on Nauru, and they sought control of the phosphate deposits and political independence. Both of these are now assured to the Nauruan people.

Under an agreement between the Nauruan representatives and the partner governments, which was reached at last June after lengthy negotiations, control of the phosphate deposits will be vested in a Nauru phosphate corporation. For at least the next three years the whole of the phosphate output will be purchased by the British Phosphate Commissioners.

Following the inauguration of the Nauru Legislative Council on 31st January 1966, discussions on future constitutional arrangements have been taking place. Partner governments proposed an arrangement under which defence and external affairs responsibilities for Nauru would be exercised by Australia with the Nauruan Government otherwise having full autonomy. After deliberation, the Nauru representatives rejected this proposal. They said that they envisaged that Nauru should in the future maintain close links with all three governments, and especially with Australia, but that the nature of the future links should be determined by agreement after independence had been attained.

The proposal of the governments for Australia to undertake defence and external affairs responsibilities was a responsible one, put forward in the belief that this would be the best arrangement in the particular circumstances of Nauru. I believe that it was right that the proposal should have been made. Since it proved unacceptable to the Nauruan delegation, after due consideration, the governments have not sought to persist in it. I believe that this also is the right course. We have followed for Nauru the policy of self-determination.

The Bill provides the means by which a constitution can be established for independent Nauru. Clause 3 ensures that it is within the competence of the Legislative Council for Nauru to pass an ordinance to provide for the establishment of a constitutional convention which will in advance of independence day draw up the Constitution which will become operative on independence day. On the day decided upon as independence day the provisions of clause 4 of the Bill will be brought into operation. The effect will be that Australian legislation will cease to apply, as such, in Nauru and from that time Australia will not exercise any powers of legislation, administration or jurisdiction in and over Nauru.

From what I have said earlier it will be apparent that the date of 31st January has very great significance in the history of the Nauruan people. It is the anniversary of the reunion of the Nauruan people on 31st January 1946 and since that time has been regarded as a day of national celebration. As 1 informed the House earlier this week, the Nauruan delegation and the partner governments are making every effort to complete all the necessary steps in time for 3 1 st January 1968 to be Nauru independence day. We have assured the Nauruan delegation of every assistance in this respect. Assistance is being given in the preparation of a draft constitution for consideration by the constitutional convention. Assistance is being given towards preparing for the administrative changes that are required.

As to the future, after independence, the Nauruan delegation has foreshadowed close and friendly relations continuing between Australia and Nauru. It1 suggested the possibility of a treaty of friendship between the two countries. Australia also confidently looks forward to continuation of the close and friendly relationships which have characterised our association with the Nauruan people.

In presenting this Bill to the House, I pay tribute to those who have served in the Australian Administration over the years, to the enhancement of their country’s reputation, and to the lasting benefit of the Nauruan people.

Debate (on motion by Mr Barnard) adjourned.

page 2365


Bill received from the Senate, and read a first time.

Second Reading

Minister for Health · Barker · LP

– I move-

That the Bill be now read a second time.

The Bill before the House is to give effect to the Government’s decision to establish in Canberra a tertiary institution to be called the Canberra College of Advanced Education. The College will be an autonomous institution, responsible to the Minister for Education and Science (Senator Gorton) but governed by its own Council. Till now advice on the establishment of this institution has been given by an Interim Council which was appointed last December and I should like at this point to express the Government’s thanks to the nine members of the Interim Council whose intensive preliminary work has culminated in the presentation of this Bill. I propose to re-appoint the Interim Council until the new Council is established and begins to operate, which, under the provisions of this Bill, it must do within 12 months of the date on which the Act comes into force.

The Bill sets out what the functions of the College will be. It will be an autonomous institution charged with providing in the Australian Capital Territory courses appropriate for professional and other occupations which by their nature require tertiary education. Courses provided by the College need the approval of the Minister to be provided, and the College is to provide the particular courses, if required to do so by the Minister. The detail and method of providing courses are, however, the responsibility of the Council itself. The Council is charged with concern for the welfare of students, with the duty to advance, develop and apply knowledge and skills which are relevant to the work of the College, and with providing adequate facilities for those persons admitted to undertake the various courses it will be providing. The College will award its own diplomas and certificates, these words diplomas’ and ‘certificates’ being understood in their generic sense as referring to qualifications and not in the sense in which the words are used in conversation.

As the College is to be a corporate body the normal provisions to achieve this are incorporated in the legislation. Provision is also made for the custody and use of a common seal. In general terms, the Council of the College is so constituted that its members will be representative of a wide area of interests, academic and otherwise, in much the same way as is the Council of the Australian National University. They will bring to their task a broad selection of skills and a wealth of varied experience and knowledge.

Honourable members will note that the ViceChancellor of the Australian National University or the Deputy Vice-Chancellor is to be a member of the Council of the College. This is a deliberate decision aimed at providing from the outset a link between the College and the National University. The legislation provides that if the ViceChancellor does not choose to accept appointment to the Council, then the Deputy Vice-Chancellor may be appointed by the Minister. It is not intended that the ViceChancellor, if a member, should have the Deputy Vice-Chancellor attend those meetings of the Council which he himself cannot attend. Two members of the academic staff of the College are to be elected to the Council and provision is made for the GovernorGeneral to appoint eight members to it. It is the Government’s intention, in recommending initial appointments to the Governor-General, to ensure that not all members so appointed are appointed for the same period of office. This will provide the desirable ‘staggering’ for the future. Four persons may be co-opted as members by the Council. If it should happen that the person chosen as chairman of the Council is not already a member, then the Bill provides that such a person selected as chairman will be an additional member of the Council for his term of office as chairman only.

The Bill makes provision for tenure of office of Council members. Our intention is that ex-officio members will continue as long as they hold their substantive offices. The Deputy Vice-Chancellor of the Australian National University, if appointed, will be so appointed for a maximum of 1 year. The members elected by the academic staff will hold office for 2 years. One of these members will be elected each year and the Bill therefore provides that one of such members to be determined by lot will be elected initially for 1 year only. It also provides that at least one of those members will be elected from the senior teaching staff of the College. The determination of seniority is a matter for the Council to decide. Other members will hold office for a period of up to 4 years; the initial periods of appointment will be made so as to provide, in effect, a staggering of the period of office.

At this point I think it appropriate to refer to some of the specific powers which this Bill seeks to give to the College Council. It gives it power to appoint its own committees, to manage and control the affairs and property of the College, to appoint and dismiss staff, to award diplomas and certificates, to determine the organisation of courses, and to control by statute the use of the land leased to it by the Commonwealth Government. This power covers matters such as the siting of buildings and the control of traffic and parking. It enables the Council to control the admission and enrolment of students, to determine fees, subject to Ministerial approval, and to exempt certain classes of students and staff from payment of fees. The Bill authorises the establishment of internal organisations of students and staff, the making of rules under college statutes, except in matters of traffic and parking, and allows the Council to act in the way best suited to promote the objects and interests of the College.

In order to ensure that both the Parlia-ment and the responsible Minister are kept fully aware of the activities of the College a clause has been included in the Bill to make it obligatory for the College authorities to present annually to the Minister a report of the College’s! activities, with financial statements for tabling in the Parliament. The financial and auditing provisions in general are similar to those in modern legislation. An example is the Act governing the Institute of Aboriginal Studies. The House will note that the Bill includes a clause which prohibits discriminating against students or staff on religious grounds. This is a common provision in the legislation establishing our Australian universities. There is, for example, a similar provision in the Australian National University Act. The Commonwealth Government will bear much the same relationship to the Canberra College of Advanced Education as it does to the Australian National University. Financial provisions for the needs of the College will be made through the annual estimates of the responsible Department and the necessary financial provisions to this end and for all desirable control of the College’s financial activities are included in the Bill.

The Government has no doubt that the establishment of this institution will serve a real need in the tertiary education field in the Australian Capital Territory. It and the National University will complement each other and it will, in its own right, develop into a college which will provide the range and standard of predominantly vocational education which is essential in this dramatically growing and developing area. Mr Speaker, I commend the Bill to the House.

Debate (on motion by Mr Connor) adjourned.

Sitting suspended from 6.22 to 8 P.m [Quorum formed]

page 2366


Mr Donald Cameron:

– I claim to have been what, in fairness, I shall describe as accidentally misrepresented.


-Order! Does the honourable member want to make a personal explanation?

Mr Donald Cameron:

– Yes, I do.


-Does the honourable member claim to have been misrepresented?

Mr Donald Cameron:

– Yes, and in all fairness I claim to have been accidentally misrepresented in tonight’s edition of the Brisbane ‘Telegraph’. Honourable members are aware that this august body has in its midst two Camerons, each adhering to a different political philosophy. As honourable members know, I am Donald Cameron, the member for Griffith, from Brisbane. The other Cameron is Mr Clyde Cameron, the member for Hindmarsh, from South Australia. I am the fourth Donald Cameron to represent a Brisbane electorate in this national Parliament and with the exception of the Labor Donald Cameron, all have enjoyed long terms.


-Order! The honourable member will explain how he has been misrepresented.

Mr Donald Cameron:

– I refer to question time earlier today. Honourable members will recall that, following a question asked by the honourable member for Watson (Mr Cope) of the Treasurer (Mr McMahon), the honourable member for Hindmarsh interjected, whereupon the Treasurer retorted, in words that were correctly quoted in tonight’s edition of the Brisbane ‘Telegraph’ but in such a way as to give Brisbane readers, including my constituents, reason to believe that I had interjected. The newspaper reported:

Waving his finger at Mr Cameron, Mr McMahon said: ‘You shouldn’t talk. I have never known a member who does so much whispering about his Leader behind his back’. Amid Opposition jeers, he added, to use a dreadful term: ‘I don’t know anybody who sucks up to Liberal members more than you’.

I hope, Mr Speaker, that you will allow me to ask not only the Brisbane ‘Telegraph’ but all radio and television stations to note for future reference that there are two Camerons in this House. I ask that they be good enough to distinguish clearly between us when referring to either of us. Their not having done so has caused me considerable embarrassment in the past and, in all fairness, I cannot be my father’s keeper.

page 2367



Second Reading

Debate resumed from 18 October (vide page 1960), on motion by Mr Fairbairn:

That the Bill be now read a second time.


– There being no objection, I will allow this course to be followed.


– The Opposition voices a very strong objection to the paucity of the time allowed for it to consider these measures. For 3 years the Government, with the assistance of its legal advisers and its best departmental brains, has been in the process of preparing this legislation. Now in the dying days of the parliamentary session it has brought before us legislation which the Minister for National Development (Mr Fairbairn), who is responsible for it, claims to be most complex and historic. We voice our strong opposition to it. We object to it, even after the examination that the short period of 8 days has permitted us. We attack this legislation root and branch. We say that it is wrong both in principle and in form and that it is a further sacrifice of the natural assets of Australia and the birthright of its people.

It was the late Sir Winston Churchill who said that he, as Prime Minister, did not intend to preside over the dissolution of the British Empire. The events of later history contradicted him. In this legislation the Government presides over the dissipation and the dispersal of the natural resources of Australia to predominantly overseas interests. Current events also confirm our indictment. The Opposition certainly does not deny to the Esso-BHP group or to any other licensee or lessee successfully operating under State legislation a fair and reasonable return as the fruits of its enterprise. Nor will it refuse to validate any such title to the Esso-BHP group to exploit a reasonable area of the Gippsland off-shore continental shelf. This partnership’s outstanding successes have been based on the advice of a world petroleum authority, Mr Lewis Weeks. Neither does the Opposition fail to appreciate the need for a Commonwealth legal code for the development of the petroleum resources of Australia’s continental shelf, based on its exclusive and explicit sovereign powers conferred by the United Nations Convention of 1958, to which Australia became a party some 4 years ago.

The Minister has said that these measures are of historic significance. Indeed they are. They are the greatest sell-out of Australia’s assets of all time. Other nations cannot understand how a people sitting on unimaginable resources should be so slow in developing them, so free to give away control of them and so haphazard in planning their disposal to bring maximum benefit to Australia. I have here a copy of an advertisement that appeared in the premier financial journal of the United States, Fortune’, in its issue of 15th September last. It was inserted by the Australian Tourist Commission and it is appropriately headed ‘Australia for Sale’. That is the slogan of this Government. The utilisation of national assets for the general welfare and development can only be achieved by national sovereign responsibility. Australia’s major tragedy is the absence of a national fuel and energy policy into which a policy for natural gas and its derivatives could be integrated for the welfare of the nation as a whole as well as for the welfare of the respective States and regions.

Of Australia’s 1 million square miles of continental shelf, already 750,000 square miles are held under State issued exploration licences and production permits. The eyes have been literally picked out of the continental shelf already. The overwhelming proportion of the capital of the various exploiting companies is foreign owned and controlled. The capital of the companies to which production licences have already been issued is largely foreign owned. Of the Esso-BHP group, 50% is foreign capital and of West Australian Petroleum Pty Ltd, which has interests in Barrow Island in Western Australia, 84% is foreign capital.

The accession of at least certain of the Australian States to the Agreement Relating to the Exploitation of Petroleum Resources which is associated with this legislation has been a reluctant acceptance of lesser benefits under Commonwealth pressure for conformity and because of stark financial necessity. This legislation deals with the most valuable single asset of the Australian people that has ever come under discussion in this House. The importance of this asset can be measured by the published statement of a leading financial commentator that the Broken Hill Pty Co. Ltd is now a company classified by the Australian stock exchanges as an oil and gas explorer with incidental iron and steel interests. Within the last 9 months, this company’s 130 million, ordinary shares have soared in value from $6.50 to more than $15 a share. The total value placed by the Australian investing public on the company’s assets, real and potential, has therefore increased from $850m to more than $2,000m - an increase of at least $l,150m. Let it be remembered. Sir, that this company has only a 50% interest with its American associate, the puppet of the Socony-Vacuum interests. Furthermore, this rocketing rise is based mainly on development of the Barracouta and Martin areas, which are the subject of a contract between Esso-BHP and the Victorian Gas and Fuel Corporation. The further proving of the Kingfish, Halibut and Dolphin areas has yet to be assessed by the share market and undoubtedly will result in even further appreciation.

The first quarter of the second reading speech made by the Minister for National Development is a classic of Government self-congratulation. With great unction and eclat, this legislation was presented as a legislative scheme believed to be unique and said to be suited to a Federal system of government. The Minister, in the second paragraph of his speech, with somewhat nervous apprehension, glossed over the complete reversal of his policy statement of November 1965 when he enunciated the principle of graticular surrender and sale by public tender. We have not a word from him about the sordid manoeuvres and the sell out that was consummated by the Victorian Petroleum (Barracouta and Marlin Fields Agreement) Act. Profound legal difficulties are said to have been overcome. What humbug this is, coming from a national government that has supinely allowed the States to intrude unconstitutionally into its sovereign field.

The Commonwealth Government, by proclamation signed by the former Prime Minister in 1953, 10 years before its accession to the International Convention on the Continental Shelf, proclaimed its sovereignty over the continental shelf and then, typically, allowed the matter to rest. Within the next few years, the exploration subsidy legislation of this Government caused a spate of State legislation designed primarily for oil exploration within State territorial boundaries. After some partially successful land operations, attention was directed towards the potential of offshore oil drilling. Certain of the State governments, notably that of Victoria, issued under their own legislation exploration permits for areas of the continental shelf well beyond the 3-mile limits of their territorial waters. Their right to territorial waters is not denied by either the Opposition or any authority on constitutional law. At no time has the opinion of any authoritative constitutional expert held other than that the Commonwealth of Australia, and the Commonwealth alone, has had sovereign rights, under paragraph 1 of Article 2 of the International Convention, to explore and exploit the surface and subsurface of the continental shelf, from beyond the 3-mile limit of territorial waters up to a limit of 200 metres of water coverage of the continental shelf, and even beyond that in certain defined cases. The external affairs power of the Commonwealth Constitution further confirms the Commonwealth’s undoubted sovereignty in this field. At no time, under the terms of the same Convention, has the Commonwealth had any sovereign rights in the superjacent waters and air space, which are free to the ships and aircraft of all nations. With equal certainty, the six sovereign States of Australia have sovereign rights over the seabed under territorial waters up to the 3-mile limit. Their jurisdiction has been equally certain in inland waters within the limits of a 24-mile base line.

Tongue in cheek, the State representatives at conferences with the Commonwealth have asserted State sovereignty over the continental shelf as a bargaining factor, to extract from the Commonwealth the greatest possible share of production royalties in return for grudging acceptance of the Commonwealth’s abandonment of the graticular surrender and sale by public tender principle. In any constitutional challenge to Commonwealth sovereignty over the continental shelf, an attacking State would not hit the deck. The Minister, the Prime Minister (Mr Harold Holt) and their legal advisers, as well as their State counterparts, are well aware of this. Any State attempting to take this course would expose itself to justifiable legal humiliation and would wreck the flimsy political compromises on which this measure is based. The second reading speech made by the Minister is a classic example of argumentum ad ignorantiam. The simple truth is that the Commonwealth has acquiesced and concurred, whether by sloth, indifference or otherwise, in the usurpation by the States of its sovereign powers. In par- ticular, its relations with Victoria, especially those of the Prime Minister with the ViC.trian Premier, reflect no credit on a man who, instead of being the national leader, reveals himself as a parochial State-righter.

The references to the offshore drilling cases in the United States of America have been dragged in to justify the Commonwealth’s activities and to paint a frightening picture of interminable, frustrating constitutional legal challenges. The suggestion that the Commonwealth could do other than compromise with the States in relation to its sovereign powers is a highly colourable attempt to mislead the Australian people. The Commonwealth, instead of proceeding to draft legislation that would enable it clearly and firmly to exercise its sovereign rights, has attempted to co-ordinate and reconcile the conflicting and unconstitutional activities of the various States and to present these as a coherent code for offshore oil development over the continental shelf. The back door negotiations and manoeuvres, and the skulduggery of the Victorian Government with the connivance of the Prime Minister, are a major national scandal. Behind the various manoeuvres there has been a deliberate design to present the Commonwealth Parliament and the people of Australia with a fait accompli. The Minister’s spurious arguments are advanced in justification of the unconstitutional Agreement, allegedly validated by defective Victorian legislation passed in February last, based on the urgent need to provide natural gas for Victoria and to provide for certainty of title before further financial commitments by the Esso-BHP interests. This could have been given by proper Federal legislation at any time after the Minister’s announcement of the graticular policy in November 1965, had this Government so desired, which it did not.

The Victorian Premier and his Government have in fact been usurping and exercising the constitutional functions of the Commonwealth Government. While excuses can be made for the inexperience and lack of economic sophistication of the Commonwealth Government in the earlier stages of offshore oil and gas exploration and development, there can be no excuse for its departure from a policy which had been evolved by its own Bureau of Mineral Resources and which had been explicitly announced to this Parliament by the Minister for National Development in the statement in which he announced the establishment of a graticular system of licensing for oil and gas production which the Commonwealth Government undertook to introduce and to which the States had agreed. Under that system, the holder of a drilling permit, after the discovery of oil or natural gas, was given the right to chose five-ninths of the total area held under the drilling permit, on which a royalty of 10% of value of production at the well head was to be paid. The remaining four-ninths was to be submitted for sale by tender, with the original tenderer having the right to purchase at the highest tender price. Despite this most explicit announcement, which was immediately vehemently attacked behind the scenes by various oil exploration interests particularly Esso-BHP, the Prime Minister, on 29th December last, after negotiations with the Victorian Premier, announced the abandonment of this principle and the substitution of payment of an overriding royalty of an additional 1%, which would allow the retention by the developing company of the remaining fourninths of its holding. Apart from the contemptuous slight to this Parliament’s authority, the enormity of this change of policy brought immediate protests from South Australia, Western Australia and Queensland. These States had been in negotiation with the Commonwealth for years and had completely accepted the graticular sale principle. The abandonment of this principle is the main reason for our opposition to the measure.

The oil and gas exploration industry has been treated quite reasonably under the original graticular system. The 10% royalty it was to pay was low by international standards and the proposal that four-ninths of the exploration leases were to be auctioned off when the production lease was sought was also not ungenerous. In Great Britain the royalty rate is 12i% on natural gas production. In some countries it is even higher. In the United States, to whose constitutional wrangles reference in justification has been made, the royalty paid to its Federal authority on natural gas is 16$%. Of course, any reference to price fixation by the United States Federal Power Commission at SA1.45 for natural gas wholesale is carefully avoided. The United Arab Republic charges 25% royalty on natural gas. In the case of oil, some of the Persian Gulf governments receive up to 60% royalty under partnership arrangements with major American and British oil companies.

It is a well established international principle that successful oil explorers should relinquish about half of their oil exploration licence areas. Britain, in fact, has the same provision in respect of its North Sea offshore leases. The offshore exploration areas normally attached to such licences are much smaller also than the huge Australian expanses. By these standards, and after allowing for the extra cost of exploration in Australia, the original graticular system, as supported by the Commonwealth and six State governments, “on the face of it, was quite reasonable. It provided for the proceeds of the auctioning of the relinquished area and the royalties to be paid to the State off whose boundaries the oil and gas were found. The value of the concession given in exchange for an additional 1% over-riding royalty can be calculated by the estimate of the Victorian Government that the Esso-BHP partnership would receive an annual gross income of between $66m and $110m for a period of over 20 years from the Bass Strait oil and gas licences. The Victorian Government, under the new arrangements by which it will receive an increase from 5% to 7% of the total 11% royalty, expects to receive an additional $30m to $50m over a period of 20 years. On the basis that the 2% increment from 5% to 7% royalty is worth $50m the Barracouta and Marlin fields natural gas production alone is worth $2,500m. If the 11% total royalty is deducted, the residue available for operations is still over $2,200m over 20 years. From this, of course, would need to be deducted the cost of operating the fields, including amortisation, before a profit could be determined. This result is from the Barracouta and Marlin fields alone. The remaniing fields - Kingfish, Halibut and Dolphin - will at least double the financial bonanza. All are outside the 3 mile limit.

The four-ninths interest to have been surrendered under the graticular principle from the Barracouta and Marlin fields would have produced a gross income of up to $ 1 ,000m over 20 years. To secure this, an additional $25m over-riding royalty has to be paid. What a bonanza. What a bargain. What a sell-out. The munificence of this Federal Government does not cease at this point. Apart from granting such huge areas for production, there is to be no limit to the number of licences granted to the exploring company. Hence the special relevance of the question as to the present leases and licences asked by the honourable member for Mackellar (Mr Wentworth). Even the Federal Treasurer (Mr McMahon) on 16th March last criticised the oil companies in an answer to a question in this House. He stated that, on any comparison, royalty payments by oil companies in Australia were favourable to oil operators here. The Minister seeks to impress the House with the awesome figure of $50m expenditure already spent on offshore exploration. The Gippsland offshore drilling has had a fantastically high percentage of successful holes. Dr Alex Hunter, of the Australian National University, has stated that the physical yields of natural gas derived from petroleum exploration in Australia are high. Whereas the United States of America, the most important and developed gas producer and user in the world, discovers about 95,000 cubic feet for every foot drilled, in Australia the figure is about 1,186,000 cubic feet. Thus the Australian yield, in physical terms at least, is twelve times as high.

At an Australian Country Party State conference last April, the Deputy Leader of the Country Party (Mr Anthony) said that it was unfortunate that Victorian gas reserves were being developed largely by overseas capital. The Country Party has continually warned about selling the country’s heritage to overseas countries. The ‘Australian Financial Review’ on 15th March said that the Prime Minister was appealing over the heads of the Australian electorate to the oil industries of the world. The article in that publication stated:

With capital inflow drying up largely through financial restrictions in the two main source countries overseas, the United States and the United Kingdom, the Government may well feel that this is no time to have points thrown up about the Government’s open door policy towards overseas capital. The Prime Minister is at pains to reassure the oil industry that it is getting a bit more than a fair go on world standards. The authenticity of his argument is extremely confused, but the political motives are even more revealing than the figures, for if the Australian Government ‘take’ is in fact modest on world standards does this not mean that we have sold out cheaply and that State governments might in fact have loaded up the royalty charges a bit more with the hope of solving their own financial difficulties?

Significantly the first refutation by the Federal Treasurer of the oil industries’ charges that the Australian ‘take’ was high came after the Commonwealth-State-oil company royalty negotiations on the Bass Strait offshore discoveries had been concluded. Had the Federal Government not done its basic sums until the negotiations were finished? Or had it done them and failed to get its way with Sir Hentry Bolte and the Bass Strait partners Esso-BHP? The first possibility is the more serious one, for if the Federal Government really entered these negotiations so inadequately briefed it would confirm impressions that the royalty figures were plucked out of the air rather than studied on a well informed rational basis in the balanced long term interests of all parties involved.

The areas which are being granted for exploration are not merely provinces, but principalities. To compound the evil there is to be no limit to the separate number of areas which can be granted to any one firm. I understand that one firm’s total holdings aggregate nearly 250,000 square miles. Only this afternoon the Minister gave information as to the total number of leases, licences and permits granted unconditionally by certain of the States. The House is entitled to know not merely the names of all the lessees or licensees, but also the composition of the companies, particularly the dominant financial holdings therein of overseas capital.

The Bill does not provide, nor does it indicate, the economic basis on which well head prices are to be assessed for either crude oil or natural gas, or the ultimate term of years of the leases. It provides for rights of renewal and for optional renewals. These rights of renewal and further renewal are excessively generous, and the powers conferred on the respective Ministers, or designated authorities, are almost wholly discretionary. In general commerce the rights of individuals and of ordinary commercial institutions are thoroughly defined and litigated. In the case of those production areas, whose profit yields can be worth a king’s ransom, Ministers of the Crown can act at their discretion without let or hindrance.

This legislation is not an Act of a Federal Government exercising its sovereign powers, but merely a bumbling attempt to validate the varying, illegal and unconstitutional agreements which this Government by its incompetence, indifference or deliberate design was prepared to allow the various State Governments to negotiate. The vastness of the Commonwealth complaisance defies description Its interest and responsibility end under this legislation - unless it is consulted - with the arrival of the crude oil or natural gas at the point of refining in the adjacent State. The Federal Government deliberately makes no attempt to co-ordinate or provide for the interstate transmission of this gas or oil by pipeline. It makes no provision to prevent exploitation by any price control arrangement in respect of the products of its own sovereign areas. In clause 14 of the Agreement which has been distributed to the House it provides a charter for Victorian State parochialism.

The Agreement is exclusively a political one. In clause 26 it states that the respective Governments acknowledge that it is not intended to create legal relationships justifiable in a court of law, but declares that the Agreement shall be- construed, and given effect to by the parties, in all respects according to the true meaning and spirit thereof. Beautiful sentiments! Most laudable sentiments! But, as evidence of his good faith and monumental impartiality, the Premier of Victoria has already given his initial interpretation of ‘true meaning and spirit’. On Thursday he was reported in the ‘Financial Review’ as having said that New South Wales would not be able to get cheaper gas than Victoria as a result of the Commonwealth-States Agreement. He said that the annexe to the Agreement, under which the States agreed to encourage interstate sales of gas, declared the common intention of the parties not to discriminate against interstate trade. Sir Henry Bolte further stated that this made the annexe a two-edged sword and that it would be discrimination if New South Wales were to get cheaper gas than Victoria. He said that letters of intent exchanged between him and the Prime Minister also ruled out the possibility of such sales through pipelining authority given to the State governments. What a choice example of State parochialism, of little Australianism, of the leading citizen of a major Australian State playing dog in the manger.

The Victorian negotiated price - I understand the letters of intent have been exchanged but the price is understood to be of the order of 3 cents a therm at the well head - is an unreasonable and unjustifiable one. The Victorian market at best represents 35% of the total Australian market for natural gas. The SydneyNewcastleWollongong industrial complex in New South Wales represents almost 50% of the total potential market in Australia. The collective purchasing power of this area must inevitably force down the wholesale price of natural gas to its true level. This in turn would’ be ultimately reflected in a corresponding reduction in the Victorian price, to the advantage of its people and the discredit and discomfiture of its Premier and its Government.

Let us examine the real motives behind the manoeuvres of this gentleman, the Premier of Victoria. He already has, to his discredit, the stigma of an unexplained and unjustifiable exchange of letters of intent for the purpose of entering into a contract for the supply of gas to Victoria. In so doing he chose to defy or disregard the advice and objections of hrs own Gas and Fuel Corporation and of his own State Electricity Commissioners, and even of Dr Hetherington, a world authority appointed to advise the Government of Victoria on the policy that it should pursue in developing natural gas. Obviously, this impecunious Premier last February was anxious to finalise an agreement at the earliest possible date so as to get his hands on the annual royalties of $30m to $50m that his State Treasury so urgently needed. An additional motive, of course, was the proximity of the Victorian State election and the political mileage which he could extract from the over-glamorised discovery of offshore gas and oil, with the Bolte Government basking in its reflected glory. Indeed there were other birds that Sir Henry could kill with the one stone.

The contract when signed will result in a city gate price at Melbourne of approximately 3.9 cents a therm. This figure remarkably approximates the Melbourne prices for brown coal and residual fuel oil. Of course Sir Henry had to protect his State Government’s investment of more than $ 1,200m in the brown coal industry, with its associated electricity generation and gas production. Seeking fresh worlds to conquer and to deliver a mortal body blow at New South Wales industries, further disreputable manoeuvres followed to which the Prime Minister of this Commonwealth, of all people, has been a conscious party. The letters of intent tabled in this House on 28th February 1967 give the official and public record of this unbelievable arrangement. No Australian would deny to any State the right to secure adequate supplies of fuel to its own industries and its potential development, but Sir Henry’s statement that in interstate sales of natural gas the price would be all that the traffic would bear discloses his real motives - to deny to New South Wales any industrial advantage it might gain by getting such a supply, and above all to thrust upon New South Wales a price structure of his own devising which, because of additional transmission costs, would put New South Wales at a permanent disadvantage in his myopic vision.

Other conceivable advantages could, of course, flow from the Bolte master plan. With the evident reluctance of the New South Wales Government to construct its own pipeline for the interstate transmission of natural gas, further profitable deals could be driven with the Esso-BHP group, to his - Sir Henry Bolte’s - advantage, should that group decide to obtain from this willing Government of New South Wales permission to construct its own pipeline and by so doing establish a New South Wales monopoly along the lines it had already attempted in Victoria at the commencement of its negotiations with that State. It is well known that the original BHP terms suggested were more than even Bolte could swallow. They were that the Esso-BHP group should be given sole rights to pipeline gas to heavy industry throughout Victoria. Even the group’s second proposal for a price of 5 cents a therm was too much for Sir Henry’s craw. The recent announcement by Esso-BHP that it proposed to examine the practicability of establishing its own interstate pipeline to supply its own needs in New South Wales, and to wholesale the gas at Sydney city gate prices shows which way the wind is now blowing. Even with the BHP, the seventh state of Australia, Sir Henry will then propose to levy toll on that organisation’s transmission, like some fuedal predatory baron from an earlier age.

Both Victoria and South Australia are constructing their own gas transmission pipelines. The New South Wales Government cannot refuse to do likewise and become a common carrier. Should BHP desire to transmit natural gas for its own needs through such a pipeline, a fair and reasonable arrangement can be made for a proportionate contribution as to costs and rights of useage. Any legislation really designed to provide for the true needs of Australia should contain a code for the common carriage of crude oil and natural gas by interstate pipeline. Surely it is elementary that when public utilities are provided by the various States, such as railways, electricity generation and transmission facilities, water supply and conservation projects, sewerage, public roads and irrigation canals, the construction by either State or Federal authorities of the necessary pipelines is not beyond the capacity and competence of democratically elected governments.

What is to be the attitude of the Country Party, the arch-advocate and exponent of decentralisation of population? What better way can there be of achieving true decentralisation than by supplying natural gas as a fuel to the major internal provincial cities and towns of Australia at competitive prices determined by the forces of the open market? Within the Minister’s own constituency, in Albury itself, on 17th March last a conference of local government representatives was held. There it was resolved that the distribution of natural gas should be controlled as a national responsibility and not on an individual State basis; that a national commission should be established for the bulk distribution of natural gas.

The legislation fails signally to provide for the protection of purchasing States from the greed, parochialism and caprice of producing States. This legislation should provide for a minimum proportion of output at the point of production to be offered for sale to other States. Why is protection to be denied to the needs of the Australian

Capital Territory? Not even a Bolte, with Prime Ministerial connivance, could prevent pipeline transmission from the continental shelf to a Federal Territory. The Bolte argument of inadequate supplies of natural gas for Victoria is wearing very thin, following the announcement by an Esso-BHP spokesman, as reported in the Sydney Morning Herald’ of 14th October, that adequate supplies of natural gas were available for the full requirements of Melbourne and New South Wales. All that the political agreement provides, without enforceable legal rights, is for consultation between the States and the Commonwealth on the various problems arising outside the specific constitutional powers of the Commonwealth Government. A correctly drafted legal code would also have included provision for the re-establishment of the Interstate Commission. A Bill was passed through the Senate in 1937 and abandoned. It provided definite powers to deal with problems of precisely this nature.

The terms on which acceptance of the agreement by the States has been obtained are, in themselves, most intriguing. When initial negotiations commenced between the States and the Commonwealth the general proposal was for a 10% production royalty shared between the Commonwealth and the States and for the proceeds of residual graticular sales to go to the adjacent State. Faced with the bitter criticism of South Australia, Tasmania and Queensland and calculating upon their ultimate acceptance of half a loaf instead of none, the Commonwealth Government bought their ultimate approval by agreeing to take only a 4% royalty. The residual 7%, being the remainder of the 10% general and 1% overriding royalty, was the sop to the States whose needs and greed got the better of their good sense and judgment.

The history of the negotiations and manoeuvrings of the Premier of Victoria and the incompetence of the Commonwealth Government provide one of the most discreditable chapters in the history of Australian Federation. The present legislation is completely deficient in providing even the semblance of a national fuel policy which Opposition has so long advocated. We oppose this legislation implacably and totally.

Attorney General · Parramatta · LP

– I am pleased to join with my colleague, the Minister for National Development (Mr Fairbairn) in assisting the House with its consideration of these important offshore petroleum Bills. The attitude of the Opposition, as we have just heard it stated by the honourable member for Cunningham (Mr Connor), is based, I suggest, on a number of misconceptions as to the nature and effect of the Bills and of the Commonwealth-State arrangements that accompany them. For example, the honourable member said that the Commonwealth has allowed the States to usurp, as he put it, the sovereign constitutional field of the Commonwealth. This claim is based on a complete misconception of the legal effect of the statutes. The honourable member said that the Commonwealth had sold out cheaply. This may be partly a matter of judgment, but I would point out to honourable members that the Ministers for Mines of six States, including Ministers in two Labor governments, with their advisers - extremely experienced in dealing with mining matters over many years - and the Minister for National Development with his advisers, all believe that this is a good deal for Australia, well-balanced and calculated to attract venture capital from private enterprise on the enormous scale necessary to find and develop these assets for Australia.

The Minister for National Development has indicated that there has been a series of conferences over the past few years between Commonwealth and State Ministers, including both the Ministers responsible for mining and the law Ministers. It is as a result of these discussions that the Commonwealth Government and the governments of all the States have decided to introduce legislation to the effect outlined by my colleagues when introducing these Bills on 18th October. At this time all six State Ministers have introduced Bills into their Parliaments.

I wish to say something from the legal viewpoint about both the inter-governmental Agreement and about the Bills which have been introduced. The Agreement has been signed by the Prime Minister (Mr Harold Holt) on behalf of the Commonwealth and by the Premier or Acting Premier in each of the States. Its effective date is 16th October 1967. The Agreement, as expressly stated in clause 26, is not intended to create legal relationships which might be justifiable in a court of law, but nevertheless it manifests a clear political will and the intention of all of the governments concerned as to the scheme that should be applied.

The common mining code Bill, which is before the House, and the model State Bill appear as schedules to the Agreement. Annexed to that Agreement is a memorandum of understanding on the subject of interstate trading in petroleum produced from the offshore areas. I shall make some comments about these various instruments in a moment but I would like first to say a few words about the international legal background to legislation of this type.

Honourable members will see from the long title of the first and principal Bill that we are legislating with respect to the exploration for and the exploitation of the petroleum resources of firstly the continental shelf and secondly certain other submerged lands, hi point of international law the Bill relates to two distinct categories of submerged lands - those which are beyond the limits of territorial waters and have the character of the continental shelf within the meaning of the Convention on the Continental Shelf, and lands which lie beneath territorial waters. The International Law of the Sea is a part of the international law which has developed in quite a dynamic way over the past’ 15 or 20 years. I think it is fair to say that no part of international law has been developed more rapidly by international practice and convention than that relating to the rights of a coastal country over the resources of its continental shelf.

I remind the House of the active part Australia itself has played in developing and moulding law in this field. In 1953, as the honourable member for Cunningham recalled, the Governor-General, acting with the advice of the Executive Council and for the international record, issued a proclamation declaring the existence of Australia’s sovereign rights over the seabed and the subsoil of Australia’s continental shelf for the purpose of exploring it and exploiting its natural resources. A similar but separate proclamation was issued in respect of the Trust Territory of New Guinea. I should remind the House that at the time this proclamation was issued claiming these rights for Australia - not the Commonwealth of Australia - the Prime Minister issued a Press statement in which he said that the proclamation did not pre-judge the constitutional question of whether it was the Commonwealth or the States which had authority to control exploration and exploitation of the continental shelf resources. I know that the honourable member for Cunningham, with his legal experience, sees no difficulty at all in determining this question. Well, Sir Robert Menzies was not inexperienced in matters of constitutional law, nor was my predecessor at the time this was initiated, Sir Garfield Barwick. At all events, the Prime Minister qualified his announcement in that particular way.

Subsequently, at the first United Nations conference on the law of the sea which was held in Geneva in 1958, the Australian delegation took a leading part in constructing the definition of ‘natural resources’ that now appears as Article 2 in the Convention. As it happened, because of differences with Japan over pearling, Australia’s principal concern at that time was to ensure that pearl shell and other sedentary species of fish found on Australia’s continental shelf were recognised as being subject to the continental shelf legal rules and hence as being subject to Australia’s sovereign authority. Reference to paragraph 4 of Article 2 of the Convention will show that a definition suitable to Australia was obtained at that time. But times and circumstances change. Whereas in 1958 Australia’s main interest was in sedentary fish and whereas at that time thoughts of the discovery of petroleum in offshore areas near Australia would have been regarded by most men as amounting to no more than a pipe dream, the whole emphasis in the intervening 9 years has shifted. It is now concentrated on the vastly more important subject of mineral resources. These are the resources with which the international Convention is primarily concerned.

Today the exploitation of Australia’s offshore petroleum resources is a reality, or very soon it will be a substantial reality. For governments this has meant the devising of appropriate new legislative machinery. For governments in a federal system, such as our own, there has been the additional problem of considering how this new situation, not contemplated when our Federal Constitution was first framed, should be dealt with from the constitutional standpoint. When I refer to a new situation I mean the situation arising from the development of rules of international law relating to the continental shelf in its strict legal sense, that is to say, to the submarine lands beyond the limits of territorial waters. International law recognised, long before the formulation of this Convention, that a coastal country possesses full sovereign rights over natural resources within the limits of territorial waters, which of course start at low water mark. Whether such a rule of international law already existed at the time of federation is a matter of speculation. If it did, there might be some support for the view which apparently the honourable member for Cunningham is prepared to accept almost without question. There might be some support for the view of the States that the general subject matter of exploration for and exploitation of mineral resources within the limits of territorial waters is one for the States, but I would not advance this as a certain conclusion.

But to pursue the historical narrative a little further, the States proceeded initially to grant petroleum exploration permits over areas adjacent to their coasts. These covered areas both within and beyond territorial limits and today the Minister for National Development tabled papers relating to these permits and licences which will enable honourable members to see how extensive was State activity in this sphere. Indeed, if one looks at the extent of the areas granted by the States, it will be seen that tens of thousands of square miles are comprised within these permits. The State permits and licences were for areas both within and beyond the territorial limits. They had been granted to various corporations and enterprises in good faith by the States. This also was a fact with which the Commonwealth was confronted. Mostly these had been granted under existing State laws that were devised for mining on shore and the legislation was hardly appropriate.

More importantly, the legal effectiveness of these grants appeared to be in doubt, although attempts were made by each of the States, by passing special legislation, to claim a constitutional power over the area beyond the 3 mile limit. Queensland passed special legislation, as did also Victoria, Western Australia and other States. It was passed mainly on the modern principle that a State has extra territorial power provided that it can show what the lawyers call a nexus between the subject matter dealt with and the State territory. For example, it can deal with those of its citizens who are operating offshore; it can deal with people who are basing themselves in the State for their offshore operations; it can deal with the movement of a rig from its ports or harbours. Seeking to apply the principle of the nexus the States had in fact passed legislation governing offshore oil operations outside the 3 mile limit and had granted licences for more enormous areas of the continental shelf. Every State had operated in this way. This was the position when these negotiations were in progress.

The Commonwealth considered this position to be unsatisfactory. It had a view as to the rights within the 3 mile limit and as to rights beyond the 3 mile limit. It decided to intervene. In doing so it was aware that companies holding State permits and licences were uneasy about the situation as it stood. The matter was taken up in meetings of State Mines Ministers with the Commonwealth Minister for National Development, in the Standing Committee of Commonwealth and State AttorneysGeneral and in joint meetings of the two groups of Ministers. At the first meetings conflicting constitutional claims were advanced by the States and the Commonwealth. As I say, behind this was the uneasiness of free enterprise ventures coming into the area. We were not going to attract, the interest or the kind of money which is necessary to explore and develop these resources while the titles of those who were willing to enter going into this field were uncertain. There could* have been resort to litigation and this would have been prolonged and difficult and, probably, necessary in relation to the licences of every State licence separately because the various State laws were different. When the Ministers began to appraise the Australian situation they decided that it was sensible to have a common petroleum mining code and to provide a single administrative organisation. By this means use could be made of existing State administrations.

Although the Commonwealth had all along maintained that it had constitutional authority to give effect to the international Convention and that this gave it some rights outside the 3 mile limit, there appeared to be difficulty and uncertainty about the position, at least within the 3 mile limit, and the possibility of a decision by the High Court in favour of the States could not be discounted. Each Australian State had a sea coast and that distinguished the Australian position from that of the United States and Canada where there had been some decisions. In Canberra in April 1964 at a joint meeting of the two groups of Commonwealth and State Ministers the first substantial moves were made towards establishing a joint legislative scheme. It was agreed that the Ministers should seek to work out a system of parallel or joint Commonwealth and State legislation without resort to constitutional litigation and certain points were established. This scheme was to apply to all submarine areas, whether inside or outside the territorial limits, so that there was uniformity. Operations were to be subject to a common code. Day to day administration of the code was to be in the hands of the States, subject to recognition of the Commonwealth’s position in regard to matters such as were within its powers. Royalties were to be shared between the Commonwealth and the States. It was accepted that exploration permits granted under the legislation existing up to that time should be honoured.

The ministerial accord announced in April 1964 served the immediate purpose of removing the constitutional legal uncertainties from the minds of petroleum companies. The operators were able to see that the Commonwealth and the States were intent upon using their combined constitutional resources to provide operators with secure legal titles. It is certain that the announcement made in April 1964 and the information subsequently published from time to time, including the progress reports that my colleague has made to this House, have contributed greatly to the offshore activity that we now see going on around Australia. From that point in 1964, Commonwealth and State Ministers and their officials went to work on the formidable task of preparing this new legislation. By far the greater part of the extensive material that honourable members now have before them consists of the new petroleum mining code. That is in the first Bill. The code is described as the Common Mining Code. It is the result of a great deal of painstaking work by Ministers and their officers. I suggest that it provides Australia with a modern and thorough code that can take its place in both mining and drafting respects with the best of the codes to be found anywhere in the world.

The nub of what I might call the legal and political philosophy of the joint legislation scheme is stated neatly in the preambles to the inter-governmental Agreement and the principal Bill. The scheme of joint legislation is designed to draw upon all, and whatever, relevant- constitutional powers are possessed by the Commonwealth and the States and to do so in a way that will, as far as possible, make constitutional litigation unnecessary. The scheme involves the Commonwealth and the States legislating in virtually common form, with the law of the Commonwealth Parliament and the law of a particular State parliament applying to the same subject matter, operating over a particular geographical area and establishing the same legal system. Part II of the intergovernmental Agreement imposes obligations on the respective governments to introduce Bills to achieve these purposes - mirror legislation in the Commonwealth and State parliaments. I may illustrate the effect of the Agreement by referring to the position of the holder of an exploration permit or a production licence. The permittee or licensee will in fact have a dual authority. That is to say, his authority to explore or to exploit will flow to him both from the Commonwealth and from the State concerned. Whatever may be the authority of the Commonwealth is channelled to him by this legislation through the Designated Authority. Whatever may be the interest or the right of the State is channelled to him in support of his licence through the mirror State legislation. Whether he is to operate within the 3 mile limit or outside it does not matter; he still gets title.

The Agreement goes on in Part III to provide arrangements for the administration of the Common Mining Code. In respect of an area adjacent to a State, the Code is to be administered by a person who is called the Designated Authority’. Administration by this one person, acting under the authority of both the Commonwealth law and the law of the relevant State, is contemplated. Clause 11 of the Agreement requires a State government to consult with the Commonwealth before permits, licences and other authorities that are mentioned in the clause are issued, and the Commonwealth in considering the matter will take into account the comprehensive list of heads of Commonwealth power and its decision given in the light of its responsibility is binding on the States. The Opposition claims that the Commonwealth is parting with its powers and its authorities; but permits and licences cannot be granted without the agreement of the Commonwealth. Let me give an illustration: If the Commonwealth was of the opinion that for reasons of national security, on information it had, a particular licence should not be issued to some foreign applicant it could decide against it and the Designated Authority could not make the grant. Clause 11 likewise ensures that the Commonwealth has control over the fixing of the outer limits of the continental shelf. In its discussions with the States the Commonwealth made it clear that while the administration of matters relating to exploration and exploitation is committed to the Designated Authority by the joint action and agreement of the Commonwealth and the States, the resources do not thereby become, as it were, a State asset. It has been suggested that the Commonwealth in some way has parted with its asset. On the contrary, the Commonwealth continues to maintain that the resources are a national asset and the Commonwealth has a definite interest in what eventually happens to them. The Designated Authority nominated under the Common Mining Code is the repository of Commonwealth and State proprietary interests and he is in a true sense the agent of the Commonwealth as well as of the State. It is a use of a national asset, not a parting with it, and it is used in a way which will be effective to produce the best results for Australia. In the nature of things, of course, the State adjacent to the area where exploitation takes place will have an advantage in some cases against another State from the viewpoint of having first use or first cut. as it were, of resources. But this depends upon accidents of geography and geology. Nothing we can do in the Mining Code can affect an accident of geography as to where the discoveries will be made.

I now refer to clause 14 of the Agreement. Under this clause, if a State wishes to impose a condition upon someone having a production licence, that he must bring to the shore of that State the petroleum which he discovers, the Commonwealth can veto the inclusion of such a condition. In other words, the explorer is entitled to pipe or to carry his discovered petroleum to any State. Unless the Commonwealth agrees, the Slate which granted him his license cannot impose a condition compelling him to bring the petroleum to that State. The Commonwealth will consider economic and national interests in determining whether it will agree. This scheme does not deal with the question of what happens to the resources after they come to the shore. I will say something about that in a moment. The Commonwealth recognised in the discussions that there might be ways in which the national interests might be affected, even adversely, by matters occurring outside the ambit of the scheme, that is to say, after the petroleum came to shore - for example, after it had been treated. The Commonwealth accordingly proposed, and the States agreed to accept, a Memorandum of Understanding concerning trade between the States and between the States and the Territories forming part of the Commonwealth. The Memorandum records the understanding of all the governments that trade between the States, and between the States and Territories, in offshore petroleum will be encouraged, that it will not be restricted, and that there will be no discrimination against any such trade.

Section 92 of the Constitution of course prevents legislation being passed which would interfere with interstate trade. But section 92 does not apply to many things. It does not apply to contracts, for example. The Memorandum of Understanding makes it clear that action at any level - for example, an attempt by a State to expropriate the treated petroleum - which interferes with interstate trade, is excluded by the Memorandum. If, contrary to the Memorandum, a State broke the understanding such action would entitle the Commonwealth to move in and use its constitutional powers, which are fully reserved. The Commonwealth could establish a national fuel board or an interstate pipelines commission if the occasion arose. The honourable member for Cunningham spoke glibly about a lack of national fuel poliCy and a national fuel board. We are only getting to the stage where we have national fuel. If the necessity arises for the institution of a national fuel board then the Commonwealth has reserved powers under which it can step in and adopt this mode of dealing with the situation.

Other provisions of Part III of the Agreement are for the most part concerned with administrative matters of a day to day character and I refer to them only for the purpose of observing that a proper balance of all interests - the interests of smooth administration on the one hand and the interests of a Commonwealth and national character on the other - have been maintained. The provisions relating to sharing of royalties, under which the Commonwealth receives a substantial part of the standard royalty, have already been referred to by my colleague. But perhaps I should point out, in view of the attack about selling out that was made by the honourable member for Cunningham, that the Commonwealth Parliament still retains its taxation powers; it will be a partner to the extent of 42i% of profits; it will take its excise; and it will take its royalties. To describe the scheme as being unbalanced in some fashion shows that the matter has not been fully considered from the financial aspect.

I invite the attention of honourable members to Part II of the principal Bill and I say that it is not enough simply to set up a mining code. The continental shelf is not actually part of Australian territory. We have to provide a full system of law. It cannot be assumed that any part of the law of the adjoining State will apply. For instance, in relation to crime, workers compensation or civil claims there is no applicable law unless we make a law applicable. Part II covers these matters.

This will not be the first occasion on which the Commonwealth and State parliaments have co-operated in producing a joint legislative scheme but there are features in the present scheme which are not matched exactly by anything we have achieved before. This has called for some drafting ingenuity. I mentioned that the two sets of laws, Commonwealth and State, will each confer powers on designated authori ties. By the same token, it has been necessary in a scheme such as this, to devise provisions that will avoid the incurring of double liabilities and obligations, for example, in respect of the payment of royalties. Special provision has had to be made in relation to the exercise of rights, privileges and powers under both the general law and the Common Code, and also in relation to the extinguishing of causes of action. These various matters are provided for by clause 128 and by a group of short, but legally important provisions in the last part of the Petroleum (Submerged Lands) Bill.

One other difficulty has been with the convention and the reference to the seabed. This is the convention on the continental shelf and on subsoil adjacent to the coast but outside the area of the territorial sea, to a depth of 200 metres, or beyond that limit, to where the depth of the superjacent waters admits of the exploitation of the natural resources of the said submarine areas. The outer limit is determined as the point where it is possible with your capacity to go to exploit resources. This capacity will increase with technical advancement and thus the limits advance outwards. The outer limit today may not be the outer limit tomorrow. This presents the draftsmen of an Act such as this with a problem. The Bill was drafted on the basis of application to ‘areas’. The device adopted was to draw the series of ‘picture frames’ that honourable members will see in the maps contained in the booklet which has been distributed. The legislation makes it clear, and this is recognised by notations on the maps themselves, that the legislation will apply only to so much of the submerged lands within a particular frame as has the character either of territorial seabed or of continental shelf within the meaning of the convention with its varying limits.

In all cases where Australian territory is opposite or adjacent to the territory of another country, regard has been had, and will be had, to the relevant principles relating to delimitation of a country’s continental shelf. This would apply as between Australia and Portuguese Timor and Australia and Indonesia. 1 think no comment is needed from me on the domestic boundaries between State and State, and between State and Territory. These have been worked out with goodwill between the States, as is reflected by the maps.

Finally, I wish to say a word about the six Bills that accompany the principal Commonwealth Bill. One Bill serves the purpose pf applying the offshore petroleum code to operations on ‘the land areas of the Territory of Ashmore and Cartier Islands. A permit has been granted in these areas and there is the prospect of operations in this area. As stated in Article 1 of the convention, each island has a continental shelf of its own and the principal Bill applies to the continental shell of Ashmore and Cartier Islands. These areas which are slightly above sea level are treated as if they were submerged lands for the purpose of this legislation. Honourable members will see the location of these areas on the attached maps. For reasons of convenience, it was thought desirable to apply the same code to petroleum operations on those islands. Each State might wish to consider whether it might not be convenient for administrative purposes to take similar action with respect to very small offshore islands that form part of any State.

The other five Bills relate to the imposing of royalties and various fees. The Minister for National Development (Mr Fairbairn) has referred to the royalty payable on petroleum recovered under a permit or licence, to the annual fees payable by the holders of permits, licences, and pipeline licences, and to the fees payable in respect of registration of various instruments. [Extension of time granted.] I thank the House for granting me an extension. I have not much to add. I would call attention, in relation to these last five Bills which impose various charges, to section 55 of the Constitution which provides, amongst other things, that laws imposing taxation shall deal only with the imposition of taxation and, except in the case of laws imposing customs or excise duties, shall deal with one subject of taxation only. The splitting of the legislation into five Bills is a precautionary measure. Provision for the payment of royalties which some people say may be regarded as a tax, exploration permit fees, production licence fees, pipeline licence fees and registration fees which apply on a transfer and which is something analogous to stamp duty, has been dealt with separately and not embodied in the one Bill.

I have endeavoured to give the House an outline of some of the principal legal features of the legislation which we are now considering. This legislation, taken together with the various Bills which are before the State Houses of Parliament, represents a concerted effort by all the Governments to produce a system that in the unanimous view of all the Governments is best suited to Australian conditions. Negoitations have been lengthy and have not always been easy. I believe the scheme which has been prepared will enable us all to look forward to an orderly and mutually satisfactory regulation of offshore petroleum exploration and exploitation not worried, interfered with or irritated by constant litigation. I would like to express my appreciation of the co-operation received from both the State Ministers and their officers and of the work performed by the Commonwealth’s own officers, particularly mining officers, and officers of my own Department, in association with State officers, in the task of getting these Bills into order and preparing the agreement and the other, instruments for presentation to the House. At times, much is made of apparent lack of accord between the Commonwealth and the State governments but here in a very significant and important field is a case where full and free co-operation, with goodwill, has carried these negotiations through to this point. This has been achieved with success. Mr Deputy Speaker, I have pleasure in supporting the Bills now before the House.


– The historic legislation which we are dealing with concerns exploration for, and the distribution of, our petroleum and natural gas resources. What must be remembered is that these resources are latent wealth owned by the people of Australia. The sovereign rights of Australia are acknowledged in the preamble to the agreement. The Geneva Convention of 1958 is cited and it is the duty of this Parliament to protect the interests of the Australian people. Honourable members who have listened to the Attorney-General (Mr Bowen) this evening must be extremely disappointed with his utterances. He is a learned gentleman and has come to this place with vast legal experience. But I am certain that if the honourable gentleman were given the opportunity to take a brief to assert the rights either of the States or of the Commonwealth of Australia to the continental shelf, I believe there would be no doubt that he would readily choose to take the brief for the Commonwealth of Australia.

The Attorney-General has failed to state a case. It is known that this Bill sets* out to try to deal with a problem of tremendous importance to the people of this country, that of removing from the field of disputation and legal argument the question of litigation affecting a most important discovery which is vital to the economic and social lives of our people. Yet, we have had from the Attorney-General this evening more than half an hour of doubt, confusion and uncertainty. He has raised issues as though he were setting out to tell members of this Parliament: ‘We are lucky to have an agreement with the States. For goodness sake take it.’ Is this good enough? Surely the case presented by the honourable member for Cunningham (Mr Connor) for the Australian people and for this nation, deserves to be accepted by the Parliament this evening. What the honourable member for Cunningham has put before the Parliament is not an isolated point of view. It is not a fragmentary point of view and it is not the narrow, State point of view; but it is the Australian point of view in respect of 100 square miles of the continental shelf around the island continent of Australia. If this nation is to be great and play its part surely the national Government should assert its responsibilities in these matters and declare itself unequivocally not merely in this Parliament, but to the people, the States and the world because our position stems not from some local decision but from an international convention. These doubts exist right through the legislation. It is significant to note that the agreement which accompanies the legislation under consideration this evening is not included in the legislation. The most tragic thing of all is the existence in clause 26 of the Agreement of these words:

The Governments acknowledge that this Agreement is not intended to create legal- relationship justifiable in a Court of Law but declare that the Agreement shall be construed and given effect to by the parties in all respects according to the true meaning and spirit thereof.

Precisely what does that mean? What does it mean in law? What mumbo-jumbo has been introduced into this Parliament on one of the most outstanding issues involving the resources of this nation, when in that clause of the agreement we are told that the agreement will not stand up in the law courts of this country in relation to this vital matter affecting all the people of Australia and their resources? It is a good thing it is in the agreement that under no circumstances must it be tested in the courts of this country. Where do we go from there? Surely this agreement ought to be enshrined in the legislation, lt should be in such a position that it cannot be disturbed, whether it be by one State or another or by international interference or for any purpose.

Looking through this legislation and the various documents accompanying it, I note a letter addressed to the Prime Minister of Australia (Mr Harold Holt) from Sir Henry Bolte, the Premier of Victoria. I will not read all the letter, but the closing paragraph reads:

I want to assure you that 1 regard it as implicit in the agreement we reached on the subject that your Government will be fully informed of any negotiations which are entered into with the producers for sales - to another State and that you will be acquainted of the details of any agreement arising therefrom before it is finalised.

The Premier of Victoria tells the Commonwealth of Australia, this national Government, what it will do. The word ‘consult’, which appears in the letter may have some significance, but the terms of the letter are not binding, final or conclusive. The Premier of Victoria will tell this Parliament and this Government just what will happen. If some evidence of the attitude of the state of mind of the Victorian Government is required, I refer to the ‘Australian’ of Wednesday, 18th October 1967. The heading reads:

Victoria may stop natural gas for New South Wales.

That demonstrates how good this legislation and the Federation are. This is how strong our nation is and this is how weak our leadership in Canberra is on national questions. The report states:

Unless more natural gas is discovered in the Bass Strait the Victorian Government may prevent offshore natural gas being piped to New South Wales. 1 would like to know from honourable members representing New South Wales electorates how they feel about this matter.

Mr Lee:

– Who said that?


– This is a statement from a Victorian Government Minister. The report continues:

Unless Esso-BHP or another company discovers more before a gas sale agreement is signed with New South Wales, a sticky political situation could arise when the time comes to build a pipeline to the New South Wales markets.

The Secretary of the Victorian Ministry of Fuel and Power, Mr W. M. Roberts, said yesterday that the known reserves of the Gippsland fields had been estimated between 4.5 and 5.5 trillion cubic feet.

This statement is a fait accompli. Is this national Parliament to surrender its sovereignty by virtue of this legislation and the Agreement before the Parliament? The Melbourne ‘Age *of Sth March this year said that there was enough gas in Bass Strait for 300 years. Yet a Minister of the Crown in Victoria trails his coat to the rest of Australia and says; ‘Oh, no! This gas which has been found on the Australian continental shelf, some 20 miles or more out to sea, which by all international rules and conventions is under the control of the Commonwealth and must be defended by the Commonwealth must go to Victoria and Victoria will determine what happens thereafter.’ This would be a tragic state of affairs should a war occur. Are the industries of New South Wales or any other State to be affected in this fashion? No wonder the head of the Australian Gas Light Company made a statement in the ‘Australian’ of 19th May 1967. He said: ‘We won’t be pressured.’ These words were uttered by Mr Pettingell of the Australian Gas Light Company who subsequently sent telegrams on this topic to a number of honourable members. I received this telegram:

Seriously concerned disadvantage to New South Wales and to gas undertakings in that State created by offshore agreements and proposed legislation. Strongly submit need for amendment to legislation to ensure full consultation between States and Federal Government before decisions made to restrict use of petroleum or gas to State adjacent to offshore areas. Consider Agreement inconsistent freedom interstate trade.

That telegram was sent by the distinguished gentleman who controls the Australian Gas

Light Company. It is not for the Opposition to make any special plea for him because he would be known to more honourable members on the Government side than he would be to honourable members on this side. But this is a justifiable plea of a business executive concerned with light and power in the State of New South Wales. Surely this find on the continental shelf is of supreme importance to the people of New South Wales. The ‘Bank of New South Wales Review’ of recent date also refers to the matters raised by Mr Pettingell. Under the heading ‘Marketing Natural Gas’ it is stated:

All States are subject to the constitutional proviso in Section 92 that trade between them shall be ‘absolutely free’, but the beneficial purpose of this section could be weakened if any two states did not act in a co-operative manner in approving the development of trunk pipeline networks. Pipelines should not be allowed to introduce undesirable monopoly aspects and such a development can be prevented by legislating to make them common carriers.

This is precisely what the Opposition has been saying - that the operators of pipelines should be regarded as common carriers. These common carriers should have the well-being of the community as their concern. Just as high tension lines carry electrical energy to distribution points, so should pipelines carry natural gas as common carriers. Just as water mains carry water from the dams to the towns, so pipelines should carry natural gas from these fields to the distribution points.

The distribution of natural gas is needed in the economic life of this country. But we have a sorry spectacle in this legislation; the Government has not seen fit to heed us. The Government has been more concerned with rushing in and getting a decision at all costs. Even the Minister for National Development, who is now at the table, in replying to a question asked only this week by the honourable member for North Sydney (Mr Graham) said:

I feel that it is quite obvious that it is highly unlikely that there will be any restriction of natural gas distribution . . .

Is this the type of language that we should expect from the Minister on a matter of such profound importance to the whole of the people of Australia?

Mr Lee:

– Did not the New South Wales Government agree?


– I am not concerned with the action of Mr Askin, who sold out on this matter. Mr Askin will have to answer for that. I am speaking here in the National Parliament for the people whom I represent.

Mr Lee:

– Whom does the honourable member represent?


– I am putting forward, as far as I am able, an Australian point of view. This may not help my electorate in any way, but it can help other electorates. I have among my papers a copy of a very important statement made by Alderman R. J. Harris, Mayor of the City of Wagga Wagga. He made a plea that, in the distribution of natural gas, the pipelines ought to be common carriers and that they ought to take natural gas to the community in which he lives at Wagga Wagga and to Albury. Obviously it was suggested that the pipeline should go through the central west of New South Wales and across the Blue Mountains. There ought to be a cycle of natural gas bringing economic opportunity to people in country towns as well as to the great cities of Australia. Alderman Harris presented a case to members of this Parliament from country electorates. I am sure that some of these members are sitting in the House tonight. Amongst other things, he said:

The greatest advantage can only be achieved as the result of a combined effort by the Federal Government, State Governments and private enterprise.

We have no fault to find with that. We think that is most desirable. But the Government is prepared to allow Esso-BHP to take its pipelines where it will, without regard to the public interest. Alderman Harris also said:

We respectfully suggest the establishment of a joint Federal and State Natural Gas Pipelines Commission responsible for:

Evaluation, planning and development of natural gas in the best interests of national development.

To approve the location of main trunk pipelines for present and future developmental needs, rather than immediate requirements of States and economics.

Recommending as to how and by whom extra capital cost should be met in deviations from cheapest economic routes.

‘Recommending if and when compensation should be paid in initial stages to operators where deviations from cheapest economic routes are adopted.

This is an Australian point of view put forward by the Mayor of the City of Wagga Wagga. I put it to the Parliament that surely this point of view by a disinterested persons, a patiotic person and a good citizen should not be ignored.

These significant discoveries are of supreme importance to the economic and social life of our people. Let us not forget that this new wealth is not the private property of one or two oil companies or one or two States. This belongs to the people of Australia and should be used for their well being. It is our latent wealth and the responsibility rests with the Commonwealth Government to ensure that it is so distributed that it will bring the maximum benefit to all the people of Australia. It is necessary for the Parliament to review the history of the Federal Government’s interest in the subject, to remember where oil and gas has been discovered and to keep in mind the attitude of the Government over the years. We have consistently referred in the Parliament to the need for a national policy on the use of natural energy. We have advocated such a policy, but the Government has not heeded us. If there had been a national energy policy, based on our indigenous wealth and our capacity to harness the energy of coal, water, uranium, oil and gas, we would have known where we were going. We would have considered the whole picture of Australia, its development, its future, its strength and its security.

I want to refer to an editorial in the Australasian Manufacturer’ of 15th January 1966. It is headed *A National Energy Policy: Key to Industrial Planning’ and states:

But the development which is possible will not be achieved without sound planning. In the modern industrial economy, the necessary work of development is the duty and privilege of industry; national planning is primarily the task of government.

We have not had national planning here -

In this context, it is astonishing that the Federal Government has taken no steps towards defining a national policy on sources of energy. For many years, this journal has observed with interest the repeated efforts of the coal industry to prompt the defining of such a policy, so far without avail.

The whole of this excellent editorial testifies to the need for a national energy policy, but the Government, of course, is not willing to have such a policy.

When we think of all that is involved in the oil and natural gas industry and what it means to our people, it is astonishing that we should now apparently be carried away in a panic on this matter. A request was made in Victoria for consideration of this legislation to be deferred for 3 weeks. This is probably among the most complex legislation to come before the Parliament. It involves the use of the great wealth that we have been trying to discover for years. Yet we could not get the time we needed to consider it. At the conclusion of the Minister’s second reading speech I moved that the debate be adjourned and I asked then that time be given to consider the legislation. But it was not given. The Deputy Leader of the Opposition (Mr Barnard) asked that time be given to consider it. He asked for at least another week, but his request was refused. This action by the Commonwealth Government to deny reasonable consideration and discussion of the matter is to be condemned, for this legislation is most profound and most important to the people of this nation. For instance, the price of oil must be a factor to be considered. Where do we stand on the price of oil? Where do we stand on the ownership of oil?

I would like to think that our sovereignty in this field would be secure beyond any doubt. I have here a resolution adopted by the General Assembly of the United Nations. It is Agenda Item 45. Another resolution is contained in Agenda Item 39. Both these resolutions deal with the sovereignty of countries over their natural resources. Surely no-one would quibble about that. I put it to the Parliament that if we are to have sovereignty over our natural resources we should at least adopt the principle embodied in a private member’s Bill that was introduced some years ago by the honourable member for Mackellar (Mr Wentworth). His Bill dealt with national radio, lt may also have dealt with television. A majority shareholding should be held in this country and the developing companies ought to be domiciled here. I have with me an article entitled ‘Permanent Sovereignty - Phase II’ which was written by Charles A. Heller, editor on matters relating to economics and the United

Nations for ‘World Petroleum’. This article is of great importance. It states:

After studies and debates lasting four years, another resolution on ‘Permanent Sovereignty over Natural Resources’ has emerged. It was adopted by the General Assembly on November 25, 1966, as Document 2158 (XXI), with 104 members voting for it, six countries including the United Kingdom, the United States and Belgium, abstaining, and no vote against.

Surely this powerful decision by the United Nations cannot be brushed to one side.

In our consideration of these measures, we must acknowledge three things - the strong hand of Sir Henry Bolte, the attitude of the oil companies and the weakness of the Commonwealth Government. If anyone wants evidence of issues of extreme importance, it is found here. I put it to the House this evening that many aspects of these matters ought to be more carefully considered, for they are the very crux of these Bills. It deals more particularly with natural gas finds on the continental shelf, which is part of Australia. The amazing manner in which the graticular blocks are drawn has been dealt with very thoroughly by my colleague, the honourable member for Cunningham. We have seen the extraordinary leg shaped areas that jut out into the South Tasman Sea from Victoria. How they can be justified, I do not know. We do know that in New South Wales there is practically no continental shelf and therefore no significant area in which there may have been a possibility of finding offshore oil or natural gas. But these leg shaped areas jut out into the South Tasman Sea from the Victorian coast. They seem to have been designed deliberately to deny to New South Wales an opportunity to develop offshore oil resources. Under the terms of this measure, all the territorial waters and seas on the continental shelf will be divided among the various States. There is no doubt however that the areas in Bass Strait where oil and natural gas have been found belong to the Commonwealth, because they form part of the continental shelf.

There are a number of vital matters on which the . Opposition takes issue with the Government. We condemn it for its failure to deal with the question of graticular blocks. There are nine blocks available. Under the original arrangement, fiveninths would have been made available to the companies finding oil or natural gas and four-ninths would have been made available for sale by public tender. Yet the Commonwealth Government, with an override to Victoria, relinquished its responsibility for and rights to the four-ninths that should have been available for public tender, allowing an oil company that had successfully penetrated the five-ninths to sit on the remaining four graticular blocks, do nothing about them and keep out others who could produce oil and natural gas. If ever there was a scandal that called for the strongest possible protest and condemnation, it is this. The next matter on which we take issue with the Government relates to the royalty to be paid by the successful operator. The Commonwealth is to receive 4% and the State will receive 6% in respect of a territory to which it really has no rights, and under the override policy the State will receive another 1%. It is little wonder that this evening we have heard an apology in legalistic language designed to explain this situation as if it were justified. The Government’s action in this respect, Mr Deputy Speaker, clearly indicates that the Commonwealth has abandoned the national view in favour of that of the State and the oil companies.

Another matter on which we join issue with the Government is the price per therm to be paid for natural gas. This is of direct importance to the people, because it relates to the price of a commodity that will go directly into their homes. The housewife wants natural gas for her cooking, industry wants it and the whole community will benefit from it. In the United States of America and Canada the price per therm at the city gate is low, but in Australia it will be high. What are we to do about this? Have we not treated the oil companies in a magnificent fashion by letting them increase their price for oil from $3 to $3.50 a barrel, as was pointed out by the Treasurer (Mr McMahon) on an earlier occasion, contrary to a Tariff Board decision? This is the sort of thing that has been done in defiance of all authority. And the public just has to suffer it. The people, the State and the Commonwealth will suffer because of the ineptitude, weakness and vacillation of this Government. We also join issue with the Government over its failure to protect the interests of interstate consumers. I have already mentioned this matter. It calls for the strongest possible condemnation of the Government. There should be a commission to control a pipeline. It should not be left to the Victorian Premier or to an oil company to determine where a pipeline should go. Public interest should come first. We have heard the statement by Mr Pettigell and the comments by the Mayor of Wagga Wagga and a number of other people. The acceptance of the unilateral action of the Victorian Premier in legislating for the exploitation of petroleum resources on the continental shelf-


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


Mr Deputy Speaker, not so long ago Australia was considered to be devoid of oil resources. It would generally be conceded today that it is an oil rich country. Admittedly, its resources have not all been proved, but it is blessed with a potential that has every likelihood of being proved. Most of the new oil discoveries are not onshore; they are offshore. The oil has been here all the time. Some people believe that it should have been discovered earlier, but I think it is fair to point out that the methods of offshore exploration that have revealed it are comparatively new. What happens onshore is a matter for the States. In this measure, however, the Commonwealth is concerned with offshore oil.

Like Opposition members, I regret that there has not been more time to study these Bills. It has not been possible to grasp their details in the time available. It is true that the general outlines, though not the details, were known some time ago. Until we had the measures in our hands, we could not turn our minds to the real situation.

Another fact that I regret is that I cannot support these Bills. I shall abstain from voting on them on the motion for the second reading. Should they pass, I shall propose one or two amendments at the Committee stage.

I agree that a national policy on offshore oil is necessary. It is desirable - indeed, it is requisite - that the Commonwealth bring matters together and resolve the chaos that otherwise will develop in relation to offshore oil. A national policy is necessary, but do these measures represent the right way to develop it? In my view, they do not.

A proper oil policy for the Commonwealth should, 1 think, have four main objectives.

I list them in order of importance: Firstly it should maximise oil and gas production in Australia as soon as possible to serve our local markets and to have a surplus available for export. Speed, here, is the first requisite for a country like Australia which is so dependent on imported oil. Secondly, there should be a substantial Australian participation in the ownership of these resources. Thirdly, there should be an assured equity for the various States. Fourthly, the public revenue should be protected. It may be that the fourth criterion is satisfied by these measures, but the first three, the important three, are, to my way of thinking, not satisfied by the legislation before us.

This is peculiar legislation because very largely it is co-ordinate with the Agreement which was tabled with it. Let me direct the attention of the House to this Agreement. Firstly, clause 26 states that it is not an Agreement binding in law but merely an expression of good faith. So far as the Commonwealth Government is concerned, I have no doubt that good faith will be exhibited. But if that good faith is to be exhibited and to be binding let me draw attention to clauses 6 and 7 of the Agreement because they provide that, except with the concurrence of all the States, the Commonwealth Government will alter neither this Bill, which we are now passing, nor the regulations under it. No human being can foresee the future so exactly that he can say no change in the regulations will be necessary. Here we bind the Commonwealth’s hands and we subject it to what can be described only as a Security Council veto - the kind of thing that has paralysed the Security Council in the United Nations where one vote against a proposal means that nothing can happen. I put it to the House that this Agreement, not binding in law but binding in fairness and equity on the Commonwealth Government which will certainly honour its obligations, imports Security Council paralysis into Australian legislation.

Let us look at clause 11 (2.) and (3.) of the Agreement. This is a peculiar clause. I will not have time to mention this matter in detail but these provisions say that in interpreting the Agreement the Commonwealth Government will have regard to some, and some only, of its constitutional responsibilities. Admittedly the list is fairly wide, but it is not a comprehensive list. I am unable to understand why the Agreement should be drawn in this rather peculiar form.

I am going to say very little about State rights because my time will be taken up on matters which are of even greater importance. But I am not satisfied at all - I share some of the doubts that have been voiced by Opposition speakers - -that the various equities of the States are properly protected by this legislation.

It is said that this legislation gets rid of legal difficulties. That may be so; but it may not be. I have heard eminent legal opinion in the last few hours to the effect that if this legislation is passed, eventually there will be challenges in the High Court on various aspects of it. I am not going to try to canvass the validity of that opinion; all I say is that it has been confidentially expressed. It may or may not be correct.

I know that the Commonwealth Government had to proceed in some way or the other, but it has taken 3i years to do this. lt would have been much easier, much quicker and much speedier to have got a legal decision as to where Commonwealth and State rights began and ended and then, on the basis of that decision, we could have come to the various agreements and had a proper scheme of legislation before us which did not import this undesirable feature of the paralysing veto. There were three matters to be decided: Where is the right to the offshore oil outside the 3-mile limit? Undeniably, I think, it is with the Commonwealth. Where is the right to the offshore oil inside the 3-mile limit? Probably, I think, it is with the Commonwealth. What is the definition of the 3-mile limit? This could have been satisfactorily and speedily settled. I know that the Minister will talk about what happened in this regard overseas and in the United States of America. If he will look at the details of the American situation he will find that the analogy is a misleading one.

I come to the substance of the matter. Under this scheme there is provision for exploration permits to be taken out and then, when oil is found, production licences follow. I want the House to have some sense of proportion in this matter and to understand what we are dealing with. An acre is just under 5,000 square yards, and there are 640 acres to the mile. It is reckoned that, on the average, there is a recovery of one-fifteenth of the volume of the oil sands in the form of oil. If the sand is 100 yards thick, and I understand that some of the Bass Strait sands are thicker than that, though of course the average may not be so great then 1 square mile will contain 100 million barrels of recoverable oil worth over $300m. This legislation is based on blocks. A block is not 1 square mile; it is 25 square miles. A production location under licence is not one block, it is nine blocks, and any number of production locations can be taken up. An exploration permit area is up to 400 blocks, and any number of permits can be taken up by a single company.

I want the House to have a look at the situation as it exists and as this Bill proposes to recognise it in regard to Australian companies. There are roughly 550,000 square miles of territory allocated in offshore leases. This covers the whole of Australia’s coastline except where the old rocks come down to the coast, so that there is little chance of oil being found offshore and so that no-one has thought it worth while taking up the area. Virtually the whole offshore territory has gone, and of that 550,000 square miles, in 22,000 square miles only, by some lucky chance, the Broken Hill Pty Co. Ltd, an Australian company, has a half interest. In respect of practically the whole of the remainder, the Australian interest is minimal - 10% to 15%, or something of that order. It is all gone under leases granted by the States and which we propose to recognise under this legislation. No Australian need apply.

But there are very peculiar features of these exploration permits. Any number of them can be held by a single company, and some companies hold, I think, up to 100,000 square miles. The Act sets no minimum for exploration expenditure. I know there must be some flexibility here, but an honest Act should set an exploration minimum, which perhaps could be exceeded in terms of particular permits. To have left this aspect completely open to underthecounter negotiation is wrong.

In these immense areas rights are to be exclusive. If you are given an exploration permit nobody else can come into your area while you hold that permit. These are big areas, giant areas, mammoth areas, and there is an absolute right for a permittee to renew. It is perfectly true that there are certain relinquishment requirements. After 6 years half has to be released and after another 5 years another half has to be released. But the basis on which this is calculated excludes the producing areas for which producing licences are taken up, and really it means very little because a company can always discard those parts which it feels are least likely to bc productive. Of course if a company is wise and properly administered it will do just that, and it will be 15 or 20 years before good areas come up for allocation to other companies, or perhaps they will never come up, unless, of course, areas are found to be so bad that their present holders voluntarily relinquish them.

I want to contrast this with the position in the North Sea, for example, where there has been a similar situation of exploring for offshore oil. I know that the market for products of the North Sea field is a different market from the one available here, but it is not a very different oil market because oil does not cost much to transport these days in giant tankers. The gas market may be rather different, but there is not much to choose as to the location between the market for North Sea oil or the market for Australian oil - a little but not much. In the North Sea field there are no exclusive operation permits. You explore without exclusive rights. When you come to drill you get an area of 10 miles by 10 miles. You get 100 square miles in an area and you are not permitted to take up more than ten of these. So the maximum that can be held by one operator is 1,000 square miles. Compare this with the Australian position. Here a single production location of nine blocks covers 225 square miles and any number of these can be taken up.

But the important point is that here there are these giant exclusive permit areas where nobody else can come in. They are now all outside Australian hands. These exclusive areas are held under conditions which we do not know, conditions to be negotiated under-the-counter, without any exploration minimum being stipulated, and no Australian need apply.

I come now to the matter of production licences. These are important, but I think less important than the exploration licences. It was, of course, originally proposed that there should be some relinquishment to enable other companies to come in when an oil field was discovered. We have been misled, I think, by looking at these plans always on a small scale. We see these nine little blocks, but let me remind the House that each one of these nine blocks covers 225 square miles and each one of those square miles, on Bass Strait figures, would have $300m worth of oil under it.

Mr Graham:

– Possibly.


– Possibly, of course, is right. I say that this is so if it happens to be that kind of field - most fields have producing depths much smaller than those of Bass Strait. But we must have some kind of measure, some kind of sense of proportion in these matters. Incidentally, in the North Sea field after 6 years half an area has to be relinquished, and the area of a block there is only 100 square miles. The relinquishment of the graticule blocks as originally proposed under the Australian system would have allowed other companies to come in. But I put it to the House that the great objective of the overseas oil companies is to ensure that no Australian company, or rather no company controlled by Australians, shall have any right to produce oil in Australia. The idea is to hold the monopoly, to hold other companies out. That is why there is this great keenness on these mammoth exploration areas which cannot be developed by the companies concerned in any reasonable . time but which are held by those companies to prevent anybody else from producing oil.

These are the facts of life. There is in the world today a surplus of oil production capacity. The big companies do not want that surplus to be increased by production in Australia. They will go through the motions, of course, so as to produce the minimum that they are required to produce in order to hold their licences. The thread will be carefully drawn so that it does not break. The fish will not be allowed to get away. But in point of fact these big areas are being thus held in order to prevent anyone else getting in and producing oil, and since our great objective in Australia is to produce oil to our maximum capacity, this is not in the Australian interest. One does not blame the big companies for doing this. The big companies are not Australian companies. Their proper function is to lift their profits to as high a level as possible. Why blame them for performing their proper function? This is what they should do; this is what they are doing. What mugs we are to let them do it.

I say that we must ensure some Australian control of production, and any legislation that does not do this is bad legislation. If it has in it, through the sort of Security Council veto which I mentioned earlier, a kind of irreversible quality then it is even worse legislation.

So far I have been destructive. Let me now try to be constructive and suggest what we should do to cure this situation. Let me turn to the two matters of the exploration permits and the production licences. As for the exploration permits, I think we should recognise existing permits given by the States’ for the six year term for which they are given. It may be that this is being too generous but there does seem to be some kind of reliance on good faith, and as such, the good faith must be preserved. But as I understand it these State licences did not carry any absolute right (as opposed to a probability) that they would be renewed and I would think, then, that we should make the’ renewal of these licences dependent, even as to a half area, on the expenditure during their currency of a minimum amount on exploration. This minimum should be a high minimum. I will not at this moment suggest a figure, although I will have to do so when I move my amendment. I say this because owing to the limited time available to me I have not yet had an opportunity to consult the people whom I will consult over the weekend to try to find some guidance in this matter.

The right to renew an exploration permit should be dependent upon having spent on that permit during its currency a certain amount per block and unless that amount has been spent there should be no prescriptive right to permit renewal. This will, I think, keep the game honest. I would think that apart from the renewal of the existing permits, which would be dependent on this expenditure, we should not for the future permit multiple exploration permits. In the past it may have been justifiable to do this because there may have been a case for seismic exploration by ship over large areas, but within 6 years this work should be done if the permit holders are honest. It should be done over their whole area and from this time forward, since the seismic data should be known there is no need for these mammoth exploration permits to continue. I do not think that the permits should be miniscule by any means. Let them be measured in thousands of square miles if necessary but do not let them be measured in tens of thousands of square miles. This is the most important amendment which should go into this Bill and it is an amendment which I propose to move at the Committee stage and which I hope will commend itself to honourable members.

The second matter relates to the production licences. I have already said that I do not think that the provision to allow this override in place of relinquishment was a wise provision. But an announcement has been made and things have been done in good faith. That faith must be preserved. So I would suggest an amendment that this override provision operate only for the next 6 years - that is, during the currency of the present exploration permits and after the expiration of those 6 years, relinquishment should become mandatory in the care of new production licences but not, of course, in respect of production licences previously granted, and in respect of areas thus relinquished nobody except a substantially Australian company should be allowed to bid. I would hope that this amendment would commend itself to the Government. This is the way in which you can get Australian participation with the minimum expenditure of risk capital.

These are the two main things that I hope to press in this House. There will be other matters of detail but I do not want to be so concerned with those at the moment. These are the two important things, firstly that the right to renew these mammoth leases after their first 6 years should be dependent upon a proper minimum exploration expenditure, and secondly that the override provision in respect of new production licences should not be permitted to last longer than 6 years.

I feel that the present Bill is in some respects a naive Bill. To some extent it is a permanent and irreversible abandonment of what I believe to be Australia’s interests, because I submit that with the ‘Security Council veto’ over your head it may be very difficult to get future amendments. Insofar as the present situation shoulders out Australian ownership and control, except for the fortunate accident of BHP, there is an inherent tendency in this legislation to restrict future Australian oil production, whether it be for the local market or, what may be even more important, for the export market, which should be justified by our resources.

Nobody wants to violate existing agreements; we should respect them. Overseas companies should be given a fair go but no more than a fair go. They must not be allowed to continue the policy of dog in the manger - a policy which is the direct opposite of free enterprise and means, as I fear this Bill means, the abandonment of free enterprise principles in Australian oil exploration and development. I know that what I have said will be unpopular in many quarters. I would not have said it - I do not lightly go against the Government - unless I believed this was a matter of supreme importance in which the Government has made a rather bad mistake.


– -We have listened to a most impressive analysis of this unprecedented legislation by a Government supporter who will not vote for the legislation. Could I say more than that about his opinion of this intricate and complicated legislation?

Mr Graham:

– What about the Premier of Tasmania?


– I will refer to him in a moment. The most important statement which the honourable member for Mackellar (Mr Wentworth) made was that this legislation sounds the death knell of free enterprise in Australia for the oil and gas combines. Coming from a strong Liberal, who is night and day attacking the Labor Party in this Parliament, that is a very impressive statement. It coincides with the Opposition’s opinion that over the last 10 years free enterprise in this country under the Liberal Government has been slowly dying. In its place we have monopolisation in field after field of commercial activity. We might even refer to this trend as the complete socialisation of industry through private monopoly. The legislation before us now is a perfect example of this.

The Opposition opposes this legislation, much as we on this side regret having to adopt this course, for this is the first legislation of its kind in Australia’s history. What a shame that we have sold our birthright; that we have sold out our oil and gas resources that do not belong to anybody specifically. They were God given, not man made, but under this Bill we propose to carve them up in the interests of a joint Australian and overseas combine. Out of them the combine will get profits beyond its dreams. No other field in the world would produce profits over the next 20 years so great as those that will come from the EssoBHP combine. The top men of the EssoBHP combine must be laughing up their sleeves at the tremendous deal that they have been able to put over the Commonwealth and State Governments.

We oppose this Bill for several reasons. Firstly, the Commonwealth has abdicated to the States. Secondly, the Commonwealth has failed to defend its own sovereign rights and constitutional power over drilling beyond the continental shelf, which is its own legal domain as fixed by a United Nations decision of twenty-four nations. We signed that agreement and now the Government has broken it. It has abdicated. It has surrendered its sovereign rights over the continental shelf and the area beyond. Thirdly, we oppose the Bill because through it the Government has surrendered to the pressures of an oil empire to fix royalties at a disgracefully low level of 11%, permitting the oil explorers to keep all their licensed areas exclusively to themselves. Fourthy, the Government has approved of high prices for natural gas at the gate of the city of Melbourne at 3.9c per therm, which is an outrageously high level compared with the average price around the world of 1.9c per therm. Fifthly, the Government has shown unprecedented contempt for the Commonwealth Parlia ment in bringing this complicated Bill to the House in the dying stages of this 1967 session. All the agreements have already been signed, stamped and delivered and the whole productive working of this combine has been in operation for many months.

The Government has shown sheer coldblooded contempt for this Parliament. Only on two occasions in the last two years has the Minister for National Development (Mr Fairbairn) spoken of this matter to the Parliament. But in those two years the machinations of high pressure salesmanship and all the other sorts of things that go on in big business these days were going on behind the scenes. But the Parliament was not notified. We are only a rubber stamp for what has already been achieved by the States and the Commonwealth in collusion. There has been an outrageous performance by the Commonwealth Government. No wonder the honourable member for Mackellar has had the Government on this issue. This is an outrageous example of power politics in Australia, not by government with government but by private enterprise and monopoly with government. The dawn of a new day in our commercial history which we had hoped would come with the discovery of gas and oil in an economic quantity is clouded by avarice, pressure-politics, government weakness and overseas financial monopoly influence. Nowhere in this ruthless greedy world has a massive gas and oil empire got away with such a favourable deal as this.

One of the most dangerous features of this deal is the arrogant attitude of Victoria in particular towards the Commonwealth Constitution and to known international law governing control of tha area outside the continental shelf. Mr Bolte has snapped his fingers at the Commonwealth Constitution. But with this unprecedented arrogance by the Bolte Government is the supine surrender of the Holt Government to the noisy arrogance of both Mr Bolte and the oil monopoly. We have never in our history had such a supine surrender by a Commonwealth Government as we have seen over this deal. This monopoly will be able to exploit the oil and gas resources of our coastline, resources which over the next two years will be worth thousands of millions of dollars. I remind honourable members that these resources were God given, not man-made. The combine will have to pay a royalty of only 11%. This is a glorious victory for the oil and gas empire of Esso-BHP, part of which is Australian owned and part of which is owned by overseas interests.

For Mr Bolte to sign a sale contract with Esso-BHP at 3.9c per therm when the average world level is 1.9c per therm is to drag in as victims of this sordid deal all the prospective customers of Victoria and elsewhere who later will use gas. We understand that he did not want gas to be available at a price competitive with energy from brown coal which is supplied through Victoria’s far-flung electricity system. I have great admiration for the Victorian electricity supply. It has now spread right across Victoria from one end to another, providing power and light to a State that previously was very dark. He did not want double standards in the consumer price of gas and coal. His concern was understandable, but his decision was not influenced by the consumers’ needs or the consumers’ battle against rising costs. His heart did not bleed for them. No tears were shed for the consumer. Mr Bolte did not spend any sleepless nights thinking of the consumer. He gave no thought to fixing the price of gas below the price of brown coal and counterbalancing the difference by a transfer of revenue from gas to the accounts for power produced from brown coal. This could have been done if he had wanted to maintain a balance. Nor did he even attempt to average the price. He had no thought at all for the consumer. The consumer was the last person to be thought of, and yet he is the person who will determine whether the Esso-BHP venture will succeed. if the consumer does not purchase the gas when it gets to the gate of Melbourne and Sydney, all the expenditure by EssoBHP will have gone for nought and all the Government subsidies will have gone for nought. The price to the consumer can even regulate how much gas will be used. If the price remains at the level suggested consumers in Victoria might prefer to have electricity produced from brown coal or even fuel oil. At a meeting of the Australian Labor Party Resources Committee which met to discuss this measure before we came into the debate the honourable member for

Cunningham (Mr Connor) told us that at present electricity can be produced from fuel oil at 4.2c per therm, from brown coal at about 4c per therm, and from natural gas at 3.9c per therm at a time when the average price throughout the world is 1.9c per therm. What a bonanza will be secured from the charge that has been fixed as the price to the consumer. The Federal Government changed its policy between November 1966 and February 1967. The story of the pressures behind the scenes during this period would make James Bond appear to be quite ordinary and in the Sunday school class. But this story will never come to light. This is the sort of thing that goes on in rooms at night and with telephone calls about which no-one will ever know.

At this stage, in case I do not get time to deal with the matter later, I propose to mention the effect on Tasmania of this massive Agreement which has been presented to us tonight for ratification. Honourable members will see at page 21 details of the Agrement relating to the exploration for and the exploitation of mineral resources off the continental shelf of Australia, in certain Commonwealth territory and in certain other submarine land. An examination of the maps show that the oceans have been divided up as Europe was divided after World War I. The petroleum search area adjacent to Victoria has two legs stretching away down to the south east and then south west. The leg to the south east stretches out to latitude 40 degrees and longitude 158 degrees. The other leg stretches from the South Australian border out to a point 44 degrees south and 136 degees east - miles south of Tasmania. This means one thing. No other oil-gas combine will ever think of drilling for oil or gas in Bass Strait around Tasmania. And why not? Simply because the oil or gas could not reach the mainland markets. There has been no provision made in this agreement for that. A rival oil-gas combine finding oil or gas north of Tasmania would not be able to get it to the mainland because the legs that I have described extend for hundreds of miles to the south west and hundreds of miles to the south east of Tasmania, leaving no access to the mainland. There is no provision for a corridor in the submerged land, that is in the hands of Esso-BHP. This has closed Tasmania out of the oil-gas picture. For all practical purposes Tasmania could be in the Antarctic region instead of only 200 miles from the Victorian coast. This is an outrageous way to treat a sister State of the Commonwealth. Yet the Commonwealth had the nerve to ask this State to sign this Agreement. Mr Fagan, the Tasmanian Attorney-General, signed it under absolute duress, and so did Mr Dunstan, the Premier of South Australia. If they had not signed it, of course, there would not have been an Agreement, so they signed it to get the little bit of cake that will come to them in the next hundred or so years rather than get no cake at all. That was absolutely outrageous.

Mr Donald Cameron:

– Is the honourable member condemning these Labor men?


– They were Labor men but they were trapped, and they signed this wretched Agreement under duress. Honourable members have only to look at the map to see how little Tasmania can gain out of this Agreement. Will Esso-BHP go any further than the dotted line on this map? If oil or gas were found nearer the Tasmanian coast, that State might be supplied with it, and the company might be able to pipe it under Bass Strait to the mainland. But I doubt whether it would because it has discovered enough oil and gas in its five fields to supply all of the needs of south east Australia without tapping any more fields. That shows the magnitude of the reserves that have been discovered. These reserves are valued at something like $2,500m at the present time.

The area adjacent to Tasmania for petroleum exploration is shown on a map on page 21 of the Agreement. It runs down south of Macquarie Island. What an outrageous insult to Tasmania that is. Even if a firm were silly enough to go to Macquarie Island to look for oil and gas, how could it ever get its product to the market? If gas were found would it be put into cylinders or be transported by special ships? How would these ships get across the part of the ocean that is now owned by EssoBHP? They would have to be submarines? That is the crazy story that has been put over our State. The following article on the Agreement appeared in the ‘Canberra Times’ on 7th January 1967:

Tasmania’s Attorney-General, Mr Fagan, attacked the Commonwealth-backed Victorian oil treaty’ today, saying it could undermine years of work on a national oil law and could be contrary to the national interest.

Mr Fagan said the terms offered ‘very significant concessions’ and were not in line with a draft all-States oil agreement

The special conditions offered to BHP-Esso could undermine several years of patient thoughtful work applied to this question by a series of conferences of Commonwealth and State Ministers,’ he said.

It was therefore disconcerting to receive a telegram from the Prime Minister, Mr Holt, at the end of December, advising that special conditions had been agreed upon to allow production of gas . and oil from the Barracuta and Marlin fields in Bass Strait’, Mr Fagan said.

The Agreements had been made ‘to meet the special urgent circumstances of these particular petroleum discoveries’, he was told.

The Victorian Agreement allowed the company to retain nine blocks in exchange for an extra one percent royalty. This was ‘too generous’.

That is the understatement of the century.

The Article continued:

This decision will be an embarrassment to ministers when they meet in Adelaide’, Mr Fagan said.

They met the next month, which was February. An article appeared in the ‘Canberra Times’ on 6th January 1967 headed Walsh Attacks Bolte Over Oil, Gas’. It stated:

The claim by the Victorian Premier, Sir Henry Bolte, that State Ministers were aware of the necessity for Victoria to make a unilateral decsion on offshore oil and gas- before Christmas was not supported by any evidence available to Ministers, the Premier of South Australia, Mr Walsh, said today.

He had earlier sent a telegram to the Prime Minister protesting against the Agreement, which he described as a breach ot arrangements already made by the Commonwealth and all States. The article continued:

The Premiers of all States had agreed on June 2 1965 that uniform legislation dealing with exploration and development of offshore petroleum would be prepared and introduced by all States and the Commonwealth.

This Agreement involved the sharing of royalties on a 50-50 basis m all offshore areas, including territorial waters.

Discussions had been held at ministerial level over the past two years and legislation had been prepared in advance draft form.

Except for a few details, the proposed measures had been agreed upon by the Ministers.

The Commonwealth walked out on that agreement, prepared another one and had the nerve and audacity to get the six States to sign it. I do not know what the Commonwealth promised the six States but I do know that Mr Dunstan, the Premier of South Australia, did receive a $15m loan for his pipeline. Maybe the Prime Minister (Mr Harold Holt) thought be would be able to convince the South Australians that they would have to sign in exchange for the loan for the oil pipeline. In my opinion this is a tragic story of injustice to Tasmania, South Australia and New South Wales because no other company finding oil in the southern part of Bass Strait will ever be permitted to get it on the mainland through the area owned by Esso-BHP. There is no economical way whatever to get it to the New South Wales border around these two great legs of waters that are now under the control of Esso-BHP. It is no wonder that we are opposing this legislation lock, stock and barrel.

The honourable member for Cunningham has informed me that gas reserves discovered in the Martin and Barracuta fields are valued at $2,500m, and in the other fields - Kingfish, Halibut and Dolphin - $4,000m. This is only about 10% of the total value of oil reserves in Bass Strait. Around the world natural gas has now come into the picture along with nuclear power as a new source of energy, lt was once an unwanted byproduct of crude oil production. In the early days of the oil industry in the United States of America, for instance, gas produced with oil was invariably flared or burnt and separate gas discoveries were utilised only if they were near a market. It is only since the Second World War that the full potential of natural gas in the United States has been realised. Natural gas now supplies about 30% of primary energy in the United States and in terms of BTU content, supplies more energy than crude oil. In Canada, the West Coast transmission pipeline, which was Canada’s first major gasline, was completed in 1957. The Trans-Canada pipeline which covers a distance of 2,294 miles, is the world’s longest natural gas pipeline. Natural gas has increased its share of the Canadian energy market from 3% in 1950 to 17% today. Canada produced 1,250,000 million cubic feet of gas in 1965 of which more than 500,000 million cubic feet was exported to the United States.

The natural gas industry in the Union of Soviet Socialist Republics has developed rapidly since the latter years of the Second World War. Today the USSR is second only to the United States in natural gas production and the gas industry is the fastest growing sector of the Soviet economy. Its share of total energy has risen from about 3% in 1955 to 16% in 1965, and under the current 5-year plan will rise to 22% by 1970. Post-war discoveries of natural gas in Austria, France, Germany and Italy have been quite dramatic. Recent developments give rise to the belief that market penetration similar to that in North America may take place in Western Europe. The discovery in 1959 of the vast Groningen field in the Netherlands, the second largest natural gas field in the world, transformed the gas situation in Europe by making plentiful supplies available to other countries. The first exports of gas from Groningen were made in 1966 to Belgium, West Germany and France.

The United Kingdom has also entered this new energy field. A remarkable success ratio has been achieved in the British sector of the North Sea and although it is too early to assess the size of the reserves, the first field discovered began producing in June this year. In all, there are twenty-four wildcat wells, five gas fields of economic significance and a possible oilgas field in the British sector of the North Sea. The successful shipping of liquefied natural gas in refrigerated tankers which began in 1964 has made available vast quantities of gas to world markets. Algeria began exporting liquefied methane to Britain in 1964 and to France in 1965. It is at present negotiating contracts for sales to Spain and Italy and is considering a project to cover a wide area of central Europe, taking in Yugoslavia, Austria, southern Germany, Czechoslovakia and Switzerland. Libya will begin exporting liquefied methane to Italy in 1968. It will also export to Spain. In the Asian area, Pakistan has large reserves of natural gas and these are being exported. India has a small but growing natural gas industry and Japan is utilising all the gas it can produce.

I now refer to Australia. Natural gas was first found accidentally at Roma, in Queensland, in 1900, through the sinking of an artesian bore. The stimulus to oil search provided by the 1953 Rough Range oil strike in Western Australia led to a revival of interest in the Roma district and in 1954 Associated Australian Oilfields struck gas at the Hospital Hill No. 4 well at Roma. This well could be regarded as the start of Australia’s natural gas era. Only in 1954 the company I have just mentioned began Australia’s first commercial natural gas enterprise, if only on a small scale. Since 1961 it has been selling gas in Roma. About 330,000 cubic feet of gas a day is used in Roma to drive internal combustion engines at the power station and to heat boilers at the hospital. This gas comes direct from the Hospital Hill No. 4 well. Early in 1965 two major discoveries of gas were made. The Exoil-Magelan group drilled the discovery well at its Mereenie field in the Amadeus Basin, Northern Territory. Delhi-Santos struck gas in the Gidgealpa No. 2 well, South Australia. The discovery which attracted most interest and attention came in 1965 when Esso struck gas in Australia’s first offshore well, now named Barracouta.

I am not going to be so ungracious as not to congratulate this company on its great technical know-how and its tremendous effort in finding oil and gas deep below the ocean floor. The modern miracle of drilling is something that the mind of the normal backbencher or of the humble person in the community can scarcely comprehend. We cannot imagine how this can be done either technically or economically. Yet, these people have found natural gas, and good luck to them for doing so. What the Opposition is criticising tonight is the way the arrangements and agreements and contacts have been drawn up. We believe that the Federal Government, the Federal Parliament and the Constitution have been completely ignored. Our rights and powers have been surrendered to the States concerned, principally to Victoria. That State is going to become wealthy as a result of the contract. The Commonwealth will receive only four-ninths of the value of the oil at the well-head. This would not amount to much more than $5m a year. This is outrageous. What coud we do with a mere $5m a year from the exploitation of this natural wealth which belongs essentially to the people of Australia? We had hoped that some day it would help to build Australia and make it greater. The tremendous wealth from these oilfields will go to a few shareholders.


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


– I have heard amazing statements made by members of the Australian Labor Party at different times in this House since I have been here. But I must say that tonight I have heard the most amazing statement made by the honourable member for Wilmot (Mr Duthie). The honourable member criticised this Bill and the agreement and also criticised his own colleague, the Deputy Premier of Tasmania, who is a Labor Party member. Although this man is a lawyer, the honourable member for Wilmot says that be was trapped into signing the agreement. The honourable member not only reflected on his ability as a lawyer by saying he was trapped into signing the agreement but also reflected on his integrity because he said: ‘I wonder what he got out of it?’ For good measure the honourable member included another Labor Premier - Mr Dunstan, the Premier of South Australia. Mr Dunstan, who also signed this agreement, is a member of the Labor Party. The honourable member for Wilmot said that he also was trapped into signing the agreement and asked: ‘I wonder what he got out of it?’ I am prepared to say that the Premier of South Australia, who is a lawyer, would know very well what he was signing. I have sufficient confidence in his ability to know that he would not sign anything that he felt he was being trapped into. I believe that Mr Dunstan is a man of integrity and did not get anything out of it. However let us forget that for a moment. I will come back to it later on.

The honourable member for Mackellar (Mr Wentworth) made a very clever speech tonight and I must congratulate him. But I must say that the hypothetical statements he made in regard to the amount of oil under the sea were made concerning a matter that we know nothing about. He made some destructive and some constructive criticism. In his constructive criticism he said that we must be’ prepared to talk of good faith and we must be prepared to act in good faith. But in his criticism of the Bill he was not prepared to attribute any good faith to any of the State Premiers who had signed this agreement. He was prepared to say that they did not know what they were signing. However, that is his opinion.

Before I make any comment on the Bill, Mr Speaker, permit me to say that the Minister for National Development (Mr Fairbairn) should have, I think, a deep feeling of satisfaction with the introduction of this Bill. It brings to fruition a long period of most difficult negotiations between the Premiers of the six State Governments and the Commonwealth. The Premiers were most critical of the Bill and were not prepared to sign any agreement unless they were absolutely sure they were protecting their own particular State. One would be less than fair if one did not congratulate the Minister, his Department and the Bureau of Mineral Resources for the worthy part that they have played in many of the developments of Australia’s mineral potential. It has not been sporadic work that they have done. It has been basic and systematic work over a long period.

I would not like it to be thought that all the mineral wealth that we are on the verge of tapping in this country could have been located without forward planning and thinking by the mining companies who have made not only a great contribution to discoveries but have followed these explorations up with persistent vigour and enthusiasm. The last few years perhaps have been the greatest period of mineral discovery in Australia’s history. We are now at the beginning of a great period of mineral development. I sincerely hope that the Opposition will show, by its support of this Bill, that they will do nothing to discourage the development of mineral resources in this country by not supporting this Bill.

One could speak extensively about mineral discoveries. I will satisfy myself by simply saying this: I believe that Australia is now in the fortunate position that there are only a few minerals that we need to import in substantial quantities. Great efforts have been put into the exploration for. oil in Australia and it looks as though we are on the road to self-sufficiency in crude oil supplies within the next 5 or 10 years. The comparatively recent discoveries of oil, coupled with the large mineral resources, have directed the attention of the world to Australia as a potential source of supplies. Great industrial nations are thinking of us primarily as a source of supply of mineral raw materials. This, I think, is a flattering position in which to be. This is a position that we must watch carefully because here is a conflict of interests. The main risk is in foreign ownership of too great a proportion of our mineral resources, not just in foreign investment. I mean that there is a great difference between these two factors.

The honourable member for Cunningham (Mr Connor), who opened the debate for the Opposition tonight, referred to the foreign interests involved. We are greatly appreciative of the foreign investors who have risked capital before they succeeded in bringing about a successful enterprise in this country. Many such companies in Australia have realised their obligations to this country and have permitted Australians to hold large percentages of equities in their companies. I believe that one should remind the honourable member for Mackellar, because he knows probably as well as I! do, that many foreign investors in this country have played the game, if I might express it in that way, by allowing large amounts of equities to be taken up by Australians. As long as we see that the scales are fairly balanced foreign investors, I believe, will always be welcome in this country. In many cases they have been welcomed, so much so that sometimes it is hard to recognise a company as being foreign based.

The Bill now before the House is a legislative achievement, I believe, of some order. My first thought, as I said before, is to congratulate the Minister and the Premiers of the six States on their national outlook on the underlying agreement now embodied in these proposals and which is annexed to the Bill. Clearly the public interest is well served by the mere existence of an agreement, so that the important work of developing offshore oil and gas resources can proceed. This Agreement should be viewed, not in those merely passive terms, but as a definite and active influence on the rate of investment in oil search in this country. A country with so great a mineral potential to which I briefly referred a few minutes ago needs to have a particular administrative climate in which exploration is encouraged. This series of

Bills helps to establish a favourable climate for such mineral exploration.

I invite the House to consider, for instance, the provision of the second division of the Common Mining Code by which the size of blocks is progressively reduced except in certain circumstances. This whole agreement will provide a clear incentive to the explorers, while at the same time ensuring that no individual interest is imperilled. However, I do note that in the third division of the Code the amount of overriding royalty to be paid by a permit holder taking up more than his initial entitlement will be between 1% and 2i%, according to negotiations.

One could well understand that in drafting this Bill - and drafting a bill of this kind is a monumental task - the Minister has had in mind the need to let the exploration companies know where they stand. After all, the amounts committed are very large. The sum of $50m has been spent in Australian offshore exploration in the past 3 years. It costs about $10m to keep a vessel of the type of ‘Glomer HI* in operation for a year, and this is the type of operation that is going on in Bass Strait at the present time.

At the same time the Minister has reminded us, at several points in his speech, that’ there are a great many unknowns in these operations. New developments and new techniques are tumbling out of this dynamic industry, lt is true to say that almost anything is possible in the very near future. In these circumstances, one would have thought that the Minister may have wished to have left his negotiators with some greater latitude than the royalty rates mentioned. I did not have in mind that the lower level of 1% should be changed but’ that it be open to the negotiators to seek a higher ceiling than 24%, if this is found necessary. It should be remembered that we are not establishing the actual rate but merely setting the limits. I can envisage circumstances in which it may well be in the public interest to have the overriding royalty go to higher levels than at present provided. Besides this, such close limits hardly provide elbow room for the type of bargaining that would clearly be in the public interest.

The actual working out of this mining code that is now before us will depend in large measure on the success of the processes of consultation between the States and the Commonwealth. One supports fully the idea expressed by the Minister, who emphasised the importance of genuine cooperation in this area. It is important, as the Minister said, to remember that the aim of encouraging interstate trade in oil and gas has been explicity written into the agreement. In view of the comments by the honourable member for Wilmot about his Labor colleague in Tasmania, the Attorney-General and Deputy Premier, who signed the agreement, in view of the remarks about the Premier of South Australia, Mr Dunstan, who is also a Labor man, and in view of the suggestion by one or two honourable members that even the Premier of Victoria was trapped into signing the agreement or was not sincere, I would like to remind the House of the terms of the agreement. One passage in the agreement states:

The Governments-

That is, the six State governments and the Commonwealth Government - are agreed that they will encourage and will not seek to restrict any such trade and with that in view they will confer from time to time as any of them requests. They declare their common intention not to discriminate against any such trade.

Those are plain words. They are simple words and I believe they mean what they say. I have perfect confidence in the people who signed the agreement.

It would seem likely that the normal development of consultation will lead to some formality and regularity of meeting between the State and Commonwealth authorities. This is provided in the agreement. This is a most desirable trend. We have heard it said before in this House that Australia has a need for a national policy on matters relating to fuel and to mining generally. The co-operation provided in this Bill for the particular purposes of the mining code may well provide the basis for consultation in other areas. We have already had the experience that the Commonwealth interest in and concern -for our export trade has led to an interest in and concern for iron ore development in some States. In the other direction, fuel resources clearly have important defence and development implications that go beyond the boundaries of any one State. Once again, a formal framework for consultation may be an advantage.

I agree with the Minister when he rejects any idea that this agreement is an abdication of Commonwealth power. On the contrary, it appears to be a wholly reasonable exercise of Federal power within the Federal compact. However, let me offer a warning. The industry particularly dealt with - that is, offshore oil and gas development - is very much in its infancy. To some extent the bringing in of producing gas fields has caught public authorities somewhat unprepared. It is already evident that in the further development of these resources greater differences are likely to appear. In connection with pipelines, the Victorian Government has already taken action on the basis that the operation of pipelines within the State is a matter for public investment, while the New South Wales Government apparently regards it as a matter for private investment. This is a matter for each State to decide in its own way. I am not concerned with the rights or wrongs of either of these attitudes, but rather with the fact that there are differences. These differences appear to be of a fundamental nature, going to the whole philosophy of development. One trusts, therefore, that the mining code and the consultative processes provided for its administration will ensure that these differences of approach are encompassed and not skirted. Otherwise we will by this Bill have merely created an area in which Philadelphian lawyers will have a field day, despite all the fine phrases in the agreement.

What this amounts to is that we have here a satisfactory administrative frame. We have a serious declaration by all the six Premiers representing two different political parties that they are willing in their own national interest to sign this agreement. Given good will and a sense of national interest, it should work. Given a parish pump outlook by any of the parties, it will quickly be reduced to shambles. If that happens, not only will millions of dollars be frozen, but a new and valuable industry which Australia badly requires will be hamstrung and the taxpayers will be heavily penalised. I hope that the next few years will justify the fine promise offered by this scheme. I believe that the six State governments and the Commonwealth Government, who have entered into the agreement and who have readily accepted the legislation - some States have already passed complementary legislation - are sincere. They wish to see the oil industry developed in Australia. They know the difficulties that face the Commonwealth in establishing an oil industry here and they are prepared to co-operate in every possible way. To hear the comments of honourable members opposite about their own colleagues in the States amazes me. lt shows the lack of faith that they have in their own Australian Labor Party organisation.


-Does the honourable member wish to make a personal explanation?

Mr Duthie:

– Yes; I want to correct what the honourable member for Isaacs (Mr Haworth) has just said. He sard not once but several times that I had said in a speech I made immediately before he spoke that Mr Fagan, Deputy Premier of Tasmania, and Mr Don Dunstan, Premier of South Australia, were trapped into signing the agreement. I did not once use words such as those during my speech. I -aid that two Labor Ministers signed under duress. I made no reflection on their intelligence. The honourable member for Isaacs suggested in his speech a moment ago that I did this.

Debate (on motion by Mr Crean) adjourned.

House adjourned at 11.10 p.m.

page 2398


The following answers to questions upon notice were circulated:

Cadet Training (Question No. 535)

Mr Cross:

asked the Minister for Defence, upon notice:

  1. What number of cadets serve in the (a) Sea Cadet Corps, (b) Army Cadet Corps and (c) Air Training Corps?
  2. What number of (a) permanent service personnel and (b) reservists or part-time personnel is attached to each of these Corps?
  3. What is the annual cost of equipping, administering and servicing each of these Corps7
  4. What (a) number and (b) percentage of cadets from each of the three Cadet Corps has entered the regular services in each of the past three years?
Mr Fairhall:

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

Australian Administrative Staff College

Mr Harold Holt:

– On 7th September the honourable member for Swan (Mr Cleaver) asked a question concerning the possibility and advisability of an increased number of officers of the Commonwealth Service attending the Australian Administrative Staff College.

I have discussed this matter with the Chairman of the Public Service Board who has informed me that the Commonwealth Service has been nominating officers to attend courses since the foundation of the College in 1955. So far 130 officers have attended and the Service is currently nominating four senior officers to each advanced course conducted by the College. In making course selections, the College aims at assembling a wide range of experience by drawing upon nominees from industry, commerce, government, trade unions, and other bodies. One Commonwealth officer is usually allocated to each of the four syndicates, of eleven members, which make up each course.

There is much value in having officers of the Commonwealth Service participate, but I am advised that the practice of nominating twelve senior officers for the three sessions conducted each year is reasonable having regard, among other things, to current course structure and composition.

The Public Service Board maintains close touch with developments at the College and, if, in the future, the College should increase the number of its syndicate groups in each course, the Board would consider the possibility of increasing Commonwealth Service representation at the advanced level courses.

Eastern Suburbs Railway

Mr Harold Holt:

– On 23rd August the honourable member for East Sydney (Mr Devine) asked me in a question without notice whether the Commonwealth proposes to assist the New South Wales Government to complete the Eastern Suburbs Railway in Sydney.

The Commonwealth Government has agreed that the services of the Snowy Mountains Authority should be made available to assist the New South Wales Railways with the design of the railway. Its services will be made available, on the usual commercial terms, for investigation, design and general consultative work on the project.

However, the Commonwealth has decided against the provision of special financial assistance for the project on the basis that urban transport has always been an area of responsibility of the States in which the Commonwealth has traditionally not participated.

Educational Television (Question No. 369)

Mr Whitlam:

asked the Prime Minister, upon notice:

  1. When did he write to the Premiers concerning educational television, as stated by the PostmasterGeneral on 11 May 1966 (Hansard, page 1673)?
  2. What were the dates and nature of their replies?
Mr Harold Holt:

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

  1. and 2. On 7th July 1966, as a result of correspondence between myself and State Premiers, a Commonwealth/State Conference of an exploratory nature was held on educational television. At that Conference it was decided that the States would make an assessment of their individual needs and that any problems relating to them would be considered by the Commonwealth and the States. Consultations have since been taking place about the matter.

High Court of Australia (Question No. 377)

Mr Whitlam:

asked the Attorney-General, upon notice: 1, How many appeals to the High Court from the Supreme Court in each Territory and from each

Federal Court were (a) instituted and (b) heard in 1966?

  1. How many (a) taxation matters and (b) industrial property matters were heard by (0 single justices and (ii) the Full Court of the High Court in 1966?
  2. How many cases were (a) set down for hearing and (b) heard by single justices of the High Court in 1966?
Mr Bowen:

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

  1. The number of appeals (including applications for leave or special leave to appeal) to the High Court from each of the Territory Supreme Courts and the Federal Courts (including, for the purposes of the answer, as in the answer to a similar question last year, State courts exercising federal jurisdiction) was in 1966 as follows:
  1. Hie number of taxation matters and industrial property matters heard by single justices and by the Full Court of the High Court in 1966 was as follows:
  1. The number of cases set down for hearing and heard by single justices of the High Court in 1966 was as follows:

    1. Set down- 69
    2. Heard- 82

Building Costs in Northern Australia ‘ (Question No. 453)

Mr Collard:

asked the Minister representing the Minister for Housing, upon notice:

  1. Is it a fact that the Loder report shows that building costs in the north of Western Australia range from 50% in Carnarvon to 100% in Kununurra above building costs in Perth?
  2. Does the report also show that costs in the Northern Territory range from 55% to 75% above Adelaide costs?
  3. Does it also show that costs in Northern Queensland range from 15% to 60% above Brisbane costs?
  4. If this is substantially correct, does it prove conclusively that the maximum cost, now $15,000 allowed in relation to the Home Savings Grant Act, is totally inadequate for home building in Northern areas?
  5. Will the Minister have an investigation made of the cost of building in areas outside the capital cities with a view to making proper adjustments to the Homes Savings Grant Act?
Mr Bury:

– The Minister for Housing has provided the following answers to the honourable member’s questions: 1, 2 and 3. The percentages referred to appear in Appendix II of the Loder report. The percentages are a general average applying to both commercial and residential buildings and were compiled by a leading banking organisation. 4 and 3. The limitation of $15,000 on the value of a home in respect of which a Home Savings Grant may be paid relates to the value of the land, of the dwelling and of any other improvements that are, or are being, made to the land. This limit has uniform application throughout Australia. The local costs of land, labour and building materials vary, of course, between different parts of the Commonwealth, but the fact that the prevailing cost of land or of building in one locality may be higher than in another does not mean that the limit is inadequate In many localities, differences in the cost of these components tend to offset each other. Moreover, the present limit of $15,000 does not preclude an applicant wishing to take advantage of the grant in any area from buying or building a home of a reasonable size and standard.

Medical Benefits (Question No. 516)

Mr Stewart:

asked the Minister for Health, upon notice:

  1. Is it essential to be a member of a medical benefit fund in order to receive Commonwealth benefits for medical treatment?
  2. Is there any minimum scale of contribution to the fund in order to receive Commonwealth benefits?
  3. If not, will he take action to prevent certain medical funds from circulating fund members of long standing requesting an increase in contributions?
Dr Forbes:

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

  1. Yes.
  2. Yes.

The lowest contribution tables at present available to new contributors are:

A person joining a medical benefits fund would therefore need to contribute to the appropriate lowest table set out above, in order to receive Commonwealth medical benefits.

  1. I cannot give the honourable member such an assurance, as I see no objection in general principle to a fund encouraging its members to transfer to tables providing higher benefits. However, if he would let me have the details of the particular case he has in mind,I will undertake to have inquiries made and to let him have a considered reply.

Australian Military Forces (Question No. 557)

Mr Barnard:

asked the Minister for the Army, upon notice:

  1. How many national servicemen have applied to join the Regular Army?
  2. How many national service applicants have been rejected on:

    1. medical,
    2. educational, and
    3. other grounds?
Mr Malcolm Fraser:

– The answers to the honourable member’s questions (as at 30 September 1967) are:

  1. (a) 27,
  1. nil,

Of the balance, 184 have been enlisted and fortynine either were withdrawn or are still pending at the date indicated.

Australian Trade Offices in New Zealand (Question No. 643)

Mr Daly:

asked the Minister for Trade and Industry, upon notice:

  1. How many trade offices have been opened in New Zealand?
  2. Where are these offices located and what was the total cost of maintaining each office during 1966-67?
Mr McEwen:

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

  1. Three Trade Commissioner posts are maintained in New Zealand.
  2. They are located at Wellington (established 1934), Auckland (1955) and Christchurch (1957). The total cost of maintaining each office in 1966: 67 was:

North West Cape Communication Station (Question No. 656)

Mr Webb:

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

  1. Is it a fact that Australian workers employed at the North West Cape Communication Station by the United States Navy are not covered by compensation in the event of injury or death arising out of or in the course of their employment?
  2. Has agreement been reached between the

United States and Commonwealth authorities that the Commonwealth Government should accept liability as the employer for the purpose of compensation claims, including civil law claims, on behalf of the United States Navy?

  1. If an agreement has not been reached, what action is proposed to protect these workers, and when will the matter be finalised?
Mr Bury:

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

  1. No. Under current arrangements the scales of compensation provided for in the Commonwealth Employees Compensation Act are applied to Australian employees of the United States Navy at North West Cape. 2 and 3. The view of the Australian Government, which has been conveyed to the Government of the United States, is that full workers’ compensation coverage under the Commonwealth Employees Compensation Act and normal access to Australian courts for damages in the case of death or injury in the course of employment must apply to all Australian workers on the North West Cape project. Discussions are proceeding between the Governments with the object of implementing the foregoing without delay.

Cite as: Australia, House of Representatives, Debates, 26 October 1967, viewed 22 October 2017, <>.