House of Representatives
27 March 1968

26th Parliament · 2nd Session

Mr SPEAKER (Hon. W. J. Aston) took the chair at 2.30 p.m., and read prayers.

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Mr CALWELL presented a petition from certain citizens of the Commonwealth praying that this House take any action necessary to assist a campaign for a lasting peaceful settlement in Vietnam.

Petition received and read.

Social Services

Mr BUCHANAN presented a petition from certain electors of the Commonwealth praying that the well-being of the aged, the infirm, the widowed, the deserted wives and dependent children, and the service pensioner be improved to parity with the national genera) living standard of the Australian people.

Petition received.

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Prime Minister · Higgins · LP

– I wish to inform the House that this afternoon I shall be leaving Australia for a brief goodwill visit to New Zealand. I expect to return on 31st March. During my absence my colleague, the Right Honourable John McEwen, will be Acting Prime Minister.

I wish to inform the House that the Minister for External Affairs (Mr Hasluck) will be leaving Australia on 31st March and will be absent until 5th April. During his absence the Minister for Air (Mr Freeth) will act as Minister for External Affairs.

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– I may say by way of preface to a question without notice, that I want to raise again with the Minister for Labour and National Service the appointment of additional conciliation commissioners because of the mounting industrial unrest flowing from the impossible task confronting the present group of conciliation commissioners of coping with the ever-increasing number of award variation applications seeking reviews of wage rates at almost all levels.


– Order! The honourable member’s preface is far too long. 1 ask him to direct his question.


-I ask the Minister what he meant last week when he said that the present state of affairs inhibited the appointment of new conciliation commissioners. What process can he employ to overcome the inhibition referred to, and when can the necessary action be taken to appoint the additional commissioners?

Minister for Labour and National Service · WENTWORTH, NEW SOUTH WALES · LP

– Regrettably, the position has not changed since I answered the honourable members question a few days ago. One of the difficulties is, of course, that the salaries of the commissioners have not been adjusted for some considerable time. As the honourable member will appreciate, the salary level has a great deal to do with whether a job is satisfactory to applicants. 1 have this matter well in hand butI have not yet been able to complete the necessary action. I certainly wish to lose no time. Subject to a satisfactory solution to the matter of salary, and subject also to an Act being passed through this Parliament, I hope to proceed in the not too distant future.

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– My question is addressed to the Prime Minister. In view of the decision of the United Kingdom Government to accelerate the withdrawal of its forces from South East Asia, its criticism of Australia’s involvement in Vietnam, its embargo on equipment for use in South Vietnam and its materialism in sending ships to the port of Haiphong in North Vietnam, as Britain’s co-chairman of the Geneva Convention, Soviet Russia, also has done, does not the Prime Minister consider that the time has arrived for Australia to make its own awards to Australian servicemen for acts of gallantry in the field of battle, without any reference to the United Kingdom?


-I believe the question of awards by the Australian Government, on the recommendation of the GovernorGeneral, to Australian servicemen for acts of gallantry carried out in the field has been considered or is under consideration by the Minister for Defence and other Ministers. A number of factors are bound up in this question which I think need fairly careful consideration. Of course recommendations that are made for awards to Australian servicemen are made to the Queen as Queen of Australia, but they are British awards. On the other hand, there is a long history of tradition behind awards of the kind the honourable member refers to, such as the Military Cross or the Distinguished Service Order, and this, I think, is not lightly to be discarded. However, the question of some additional awards is. I believe, one that could well be considered.

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– I desire to address a question to the Treasurer concerning the Commonwealth Superannuation Fund. Does the Government propose any fundamental change to the Fund, such as replacing the existing scheme by a non-contributory scheme? If the Government does contemplate changing existing arrangements in any fundamental way will it undertake to consult with the High Council of Commonwealth Public Service Organisations and other interested national councils of employees?


– A few days ago J was asked a similar question by an honourable member on the opposite side of the House andI then gave an answer. Subsequently he informed me that he was more interested in whether or not fundamental changes were to be made to the Commonwealth superannuation scheme. With his approval I made an amendment to the Hansard report so as to point out that no fundamental alterations to the scheme were now being considered. We are not considering a noncontributory scheme. Today I also initialled or signed an answer to a question appearing on the notice paper. This answer set’s out in far more detail than I am able to give in answer to a question without notice what kind of changes are now being contemplated. I think that the honourable gentleman will be able to get a copy of that answer tomorrow morning.

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– My question is addressed to the Minister for Trade and Industry. Has the Minister’s attention been drawn to a recent statement by the President of the

Australian Institute of Export to the effect that more effort would have to be put into exporting during the present year in order to offset adverse factors such as the devaluation of sterling and cuts in American imports and overseas investments? Would the Minister care to comment on this statement, and will he make the resources of his Department available to assist in every way possible in increasing knowledge of the technicalities of export and so help to ensure the maximum result for Australia?

Deputy Prime Minister · MURRAY, VICTORIA · CP

– In the first place it is true that there is an urgent and vital necessity for Australia to earn more at export. The pace of out development, the general standard of living in the country and the increased population are producing a steadily increasing demand for imports. In the last decade imports have almost doubled. Calculations have been made that by the mid-1970s, allowing for as liberal an estimate of capital inflow as is prudent to contemplate, export earnings must be increased from the present figure of about $3,000m a year to $5,000m a year. Unless we can do this we shall become too seriously dependent on capital inflow for us to command the overseas exchange needed to service the growth of the country in its general development and its growing standards. It is a big job and it is a job that is made more difficult by the devaluation of sterling and its effect on our markets. New Zealand is the most important market in the world for our manufactured exports, and here we encounter a new level of competition due to British devaluation and to our own adherence to the previous value of the Australian dollar.In these circumstances it is clearly necessary that those who are in a position to contribute to increasing our export earnings at the agricultural, mineral and manufacturing levels must devote themselves to this end, because the whole thing is so important to the nation. The resources of the Department of Trade and Industry will be available to aid any of those people who wish to devote themselves to this national service.

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– I ask the Treasurer a question. Does the right honourable gentleman recollect telling the Directors Association of Australia that Americans are taking $320m a year out of Australia? Does he also remember that in 1965 the Vernon Committee of Economic Inquiry stated that1 overseas investment of $300m a year would mean that 46% of all Australian company assets would be owned by overseas interests by 1975? I further ask the Treasurer: If the $320m that goes yearly to Americans, plus the vast amount that goes to the United Kingdom and other countries every year, were invested in Australia could all the assets of all Australian companies bc owned overseas by 1980, or before, without one additional cent of overseas capital coming from overseas?


– The figure of $320m applied to unremitted profits and to dividend payments made to all countries, not merely to the United States of America. I gave the figures, although I cannot remember them at the moment, of the amounts of money earned by Australian companies and therefore retained in Australia.

As to the second part of the honourable member’s question, there is still a substantial quantity of unremitted profits retained in Australia by overseas concerns. Whilst these are in our balance of payments figures they are retained here and they permit the growth of this country. Unless those profits had been retained, our rate of development, our capacity to absorb migrants and our capacity to provide opportunities for increased employment would not have been on the scale that they are today.

As to the last part of the honourable member’s question, I think it is unrealistic. If overseas companies do invest here they must be entitled to send home at least a part of the profits and at least part of the dividends earned by them. I cannot see any common sense in arguing whether, if the amounts were retained in full, what contribution they would make to solving Australia’s balance of payments problem.

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– My question is addressed to the Minister for Civil Aviation. On 20th March he stated that TransAustralia Airlines planned to introduce five 19-passenger Twin Otter aircraft in Queensland to replace four DC3s and two Beach Queen Air airliners. Can the Minister advise the House whether the introduction of these aircraft will result in a more economic operation of inland services? Secondly, can he advise whether Ansett-ANA has any plans to introduce similar aircraft?

Minister for Civil Aviation · DARLING DOWNS, QUEENSLAND · LP

– The question of economics is one which may not apply particularly to this service. The Twin Otter aircraft has been introduced because it1 is a STOL - short take off and landing - type of aircraft which will provide an adequate and suitable service to inland areas, particularly the south western part of Queensland, lt is operating in New Guinea at the present time, lt is a suitable aircraft for that service and the economics of it are quite within range. Tt will replace the service provided by the F27 and, in some cases, the older DC3s. If one compares the economics of the two types of aircraft, the Twin Otter service will probably be found to be more economic and would certainly provide a better and more regular service.

As to Ansett-ANA operating similar aircraft, at the moment I have no knowledge of a proposal by that organisation to introduce this type of aircraft. I know that it had contemplated purchasing another STOL type aircraft called the Sky Van for operations in New Guinea and perhaps on the mainland as well. However, this aircraft has nol come into commercial use yet although I understand it will in the very near future. Ir. those circumstances Ansett-ANA may take up the option that it had previously to purchase some aircraft of that type.

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– I ask the Minister for the Army a question. Why did the colonel in charge of the Army’s civil affairs unit in Vietnam who gave a Press interview before leaving Vietnam a couple of days ago, have to cancel a Press interview in Canberra yesterday? Is there an established distinction between officers giving Press interviews in Vietnam and giving them in Australia, or was this a prelude to the suggested restriction on news from Vietnam?

Minister for the Army · FLINDERS, VICTORIA · LP

– There is nothing sinister in this matter, as the Leader of the Opposition might well suggest. Quite certainly, not for one moment can it be taken as foreshadowing, in my personal view, any change in the arrangements which have been continued to this time. But I am certain that the honourable gentleman will understand that it is an established principle that serving officers of the armed forces of this country do not give Press interviews or make public statements except with the special permission of the Minister and, frankly, I was not prepared to give it in this particular case.

As to the final facet of the honourable gentleman’s question relative to a Press interview of sorts in Vietnam, that matter is under consideration. The honourable gentleman could well understand that there are a considerable number of Press reporters in Vietnam, and servicemen are under some difficulty when approached by persons of this type - sometimes in an informal capacity. 1 do not suggest that this was the case in this instance, but I point out to the honourable gentleman that I have the matter under consideration.

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– Is the Treasurer able to say whether any action will be taken to lift the present limit of $7,000 on Commonwealth Savings Bank housing loans to, say, $9,000, thereby restoring the real value of the loan which has not been increased for some 6 years?


– I preface my remarks by saying that when they see the figures relating to approvals of housing in Australia most honourable members will be delighted. They are running at a record rate. The rate of approvals is about’ 144,000 for this year. So I think that in looking at the matter in terms of approvals and therefore of probable sales, the Government’s objectives are being generally achieved. As to the specific question asked by the honourable gentleman, when the Government looks at the problem of an increase in Commonwealth Savings Bank loans for housing purposes, it also has to take into consideration the problem relating to war service homes, the Australian Capital Territory and the Northern Territory. For this reason, and particularly because the Budget was a very tight one last year, we felt that we should not increase the amount along the lines recommended by the honourable member.

Mr Curtin:

– Why?


– For the reasons that 1 have just given, if the honourable member had listened and had understood them. I can assure the honourable gentleman that I have been looking at the figures again to see whether this year or quite soon we could increase the amount of the Commonwealth Savings Bank loans. I am not without optimism that it will not be very long before I am able to make a decision about it.

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– I remind the Minister for Trade and Industry that in this House yesterday he criticised Japanese protection of sugar, meat, butter and wheat. 1 ask: Is it a fact that Japan is Australia’s biggest market for sugar? Was Australia given a significantly expanded meat quota by Japan as a result of the Kennedy Round of trade negotiations? While butter is not given access, is it not a fact that Japan is Australia’s biggest market for cheese? ls it not a fact that wheat sales to Japan are steadily increasing? Did the Kennedy Round give Australia guaranteed duty-free access for wool, coal, iron ore, skins and hides in the Japanese market? If these statements are correct, does the Minister think that his attack on Japanese trade policy in this House yesterday was justified?


– I am surprised that the Deputy Leader of the Australian Labor Party should deliberately avoid saying that I was answering a question that referred to the motor vehicle industry, which is the second biggest employer of labour in Australia. I was asked whether it was being harmed by the imports of Japanese motor vehicles. I would have thought that the Deputy Leader of the Australian Labor Party would have been conscious of the size of the work force engaged in the Australian motor vehicle industry. I will give a straight answer to all the points that he raised, but I will not permit him to overlook the fact that the question I was asked yesterday related to the motor vehicle industry. Australia has been criticised for the duty it has imposed on Japanese motor vehicles and for suggesting that it may have to limit the very fast growing imports of Japanese vehicles, which today represent about 11% of the total Australian market, including home produced and imported vehicles.

The fact of the matter is that in 1957, 1958 and 1959 we were refused permission to sell one motor car in Japan. But in June 1959 we succeeded in obtaining permission to land one Australian motor car in Japan on condition that it be displayed at a trade fair and that, if it was not taken up by a government department or an Australian agency in Japan, it would be reshipped to Australia. Japan’s unwillingness to give Australia an opportunity to sell motor vehicles in Japan should be compared with Australia’s willingness last year to accept more than 36,000 Japanese motor vehicles, shipped either wholly built up or knocked down for assembly here, in direct competition with the product of Australia’s second biggest employer of labour. Since Japan is able to sell in volume to Australia, she now permits Australia to sell motor vehicles in Japan. The Japanese duty on Australian vehicles is 40%. The Australian duty on Japanese vehicles if wholly built up is 45% but if the vehicles are completely knocked down for assembly here the duty is very much lower than the duty imposed by Japan on an Australian vehicle.

That is where the argument commenced. It is true that when I answered the question yesterday I mentioned butter, wheat and meat and I will mention them again now. But let us not miss the point that a campaign against Australia’s interest has been promoted in Australia. It was triggered off principally by a Mr Maxwell Newton, who was recently revealed to be the secret paid agent of the Japanese Government. He occupies a place in the Press Gallery here and he parades as a normal journalist.

Mr Hayden:

– The Minister has tried to get him out.


– Is the honourable member trying to protect the Japanese secret agent?

Mr Hayden:

– Is the Minister trying to fix-


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

Mr Webb:

– This is said under parliamentary privilege. Why does the Minister not say this outside the Parliament?


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

Mr Cope:

– Give him the water torture.


-Order! The honourable member for Watson will cease interjecting. The Minister is answering a question legitimately asked in the House, and honourable members are entitled to hear the answer without interruption. I remind honourable members that all interjections are out of order.


– It is well known that Mr Maxwell Newton-

Mr Uren:

– Do not get personal.


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

Mr Uren:

– Stop him from getting personal.

Mr SPEAKER-Order! The honourable member will cease:

Mr SPEAKER-Order! The honourable member will cease interjecting.


– It is well known that Mr Maxwell Newton, suppressing the fact that he was being secretly paid by an agency of the Japanese Government to undermine Australian interests by seeking to have tariffs lowered, was being taken at face value and was being employed as a special writer by great Australian journals which were not allowed to know that he was a Japanese agent. He was influencing . a number of writers in the Press gallery here to write in accordance with his line, they not knowing that he was a secretly paid Japanese agent. He is not the only paid Japanese agent in Australia. There is a Mr Cramb, who is still writing; but he has never suppressed the fact that he is an agent of the Japanese in this regard.

Mr Uren:

– Character assassination.


-Order! I warn the honourable member for Reid;


– Members of the Australian Labor Party cannot take my speaking in defence of the Australian work force.

Mr Hayden:

– What part did the Treasurer play in all this?


– The Labor Party, apparently, would prefer to have jobs created in Japan rather than have them created in Australia. This Government would prefer not to have jobs created in Japan and to have them created in Australia for the Australian work force. It is a fact that the Australian Broadcasting Commission, on both radio and television, not knowing that it was employing a Japanese agent, was giving a tremendous amount of publicity to this campaign against’ Australian industry and against Australian tariffs - tariffs which had been approved by this Parliament and against which no member of the Labor Party has ever voted.


– Break it down. What about the Japanese Trade Agreement?


– Oh, yes; Opposition members voted against that.


– But the Minister said that it would not interfere with employment of Australians.


– And it has not done so.

Dr J F Cairns:

– Tell us what you will do about policy, not people.


– Oh, the honourable member would like to change the subject.

Mr Webb:

– The Treasurer would like the Minister to change it.


-Order! I warn the honourable member for Stirling.

Dr J F Cairns:

– It does not hurt us if the Minister-


-Order! I ask the honourable member for Yarra to cease interjecting.


– Last year, we sold the Japanese 155 motor vehicles and they sold us 36,000. Apparently, the weight of advantage is all against Japan! Anyone can work that out for himself. I turn now to the other matters that were mentioned by the Deputy Leader of the Opposition, and I shall take them in order. The truth is that in 1957 I sought the right to have Japan buy some wheat from Australia in consideration of our giving Japan tremendous advantages by withdrawing completely the right that we had to discriminate against Japan and, instead of voting to keep Japan out of the General Agreement on Tariffs and Trade, by voting to get her into GATT on equal terms with other countries. As part of this general discussion, I was able, with great difficulty, to induce the Japanese to agree to buy 200,000 tons of wheat a year, and later 350,000 tons a year - for a population of nearly 100 million people. Our wheat, when it is bought by the Japanese, is bought by their Government, which resells it to Japanese industry at a very much higher price. The profit that the Japanese Government makes on Australian wheat is then used to subsidise the Japanese rice industry. I do not complain about that; I simply state it as an objective fact. We are a big producer and exporter of wheat and Japan is a big customer for wheat.

We sought to sell butter to Japan. Four years ago, we sold butter to the Japanese - 47 tons. We produce more than 200,000 tons of butter a year. 1 am not criticising the Japanese policy on butter; I am merely stating it, explaining it and asking that it be measured against our policy to determine whether there is any scope for criticising us on the ground that we are acting unfairly. The Japanese policy is not to permit butter to be imported indiscriminately but, when the price of butter on the Japanese market becomes unbearably high, to permit the importation of this commodity to temper the price on their own market. I am delighted to say that last year, out of our production of 200,000 tons of butter, we were able to sell to Japan 3,800 tons.

We are, of course, the second biggest exporter of sugar. I am delighted to say that Japan buys more sugar from us than any other country, but does not pay more money to us than any other country for its purchases. Great Britain buys less sugar from us, but pays more, not only per ton but in total. When our sugar lands on the wharf in Japan - and this is really a discussion about the incidence of protective tariffs - at the world price, and it was landing at £12, £13, £14 and £15 sterling a ton last year, a surcharge is immediately imposed upon it to bring it up to a predetermined price. When that predetermined price has been reached by the surcharge then, I am informed, a customs duty of $105 a ton is imposed. This would be several times the total value of the sugar, even with the surcharge. I am, of course, referring to raw sugar. It is then taken to a refinery and refined. When it comes out of the refinery a heavy excise duty is imposed upon it. It still has to be sold to the consumer, and before the consumer is permitted to buy it a heavy consumer tax is imposed upon it. These are just the facts of life of our trade opportunity and the opportunity that we have to get a fair price for our product.

In respect of meat, in 1960 I tried to get from Japan an undertaking to buy, not from Australia but from the world, 7,000 tons of beef in the year. I held up negotiations for 6 months trying to get the

Japanese Government to buy 7,000 tons of beef from the world but I failed completely. Japan is buying more beef now. According to the figures with which I have been furnished it is estimated that this year Japan will buy 14,000 tons of beef. However, if something that is in prospect comes off the quantity will be 19,000 tons, which will be a very satisfactory sale. But it will be permitted only when the price of beef in Japan becomes unbearably high. Then beef is permitted to be imported so that the consumer is not taken for too big a ride.

I have been speaking of world quotas. Australia has to battle with the rest of the world to achieve her sales. This is not an attack on the Japanese Government; it is an objective statement of Japanese policy and practice, made so that the Japanese policy and practice may be compared with Australian policy and practice. In such a comparison Australia will come out on the right side.

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– I am sure that the Prime Minister will agree that there is need for the greatest possible co-operation between Australia and New Zealand in every aspect of national and domestic life and that this should toe cultivated continually so as to bring the two peoples closer together for their mutual interest and understanding. Is the Prime Minister aware that very little is being done by way of Press reports, news coverage of any sort, public relations or propaganda between the two countries? It is rare to read anything in the daily Press of either country about the other country. Will the Prime Minister on his visit to New Zealand this week, try to promote a greater awareness of this deficiency and, if possible, take some action to have it rectified?


– I think it is true to say that in both nations - that is, in Australia and in New Zealand - there is among the population a growing interest in the other nation and a growing realisation of considerable common interests and considerable interdependence. I think this can be seen to be developing in approaches to foreign affairs, in approaches to defence matters, in approaches to trade, in approaches to tourism and, indeed, for example, in the number of young New Zealanders who at this moment happen to be working without hindrance in Sydney in Australia. This is indeed I believe a very good augury and it is a sensible suggestion that we should seek to try to improve the situation which has already arisen.

One way in which this is being sought to be improved is, over the last few years and now, by an increasing numbers of visits, with Ministers of the New Zealand Government coming here and Ministers of the Australian Government going to New Zealand along with officials and along with the Press people who would normally be reporting in the occupations that they were engaged in. I do not know that 1 can take any direct action to attain what it is that the honourable member wants, but it is a good thing to have had it raised.

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- Mr Speaker, 1 ask the Minister for Trade and Industry a question supplementary to the one which he previously answered. Is the Mr Maxwell Newton to whom he referred in his answer to that question the person whose association with the Treasurer was the basis of the right honourable gentleman’s expressed belief that the Treasurer would bc unacceptable as Leader of the Liberal Party and unacceptable also as leader of a coalition between the Liberal Party and his own Country Party?


- Mr Speaker, this is a question to which, because of its nature, I feel no obligation to reply.

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– I desire to ask the Minister for the Army a question. 1 preface my remarks by saying that at the end of last year, following the announcement of the east of Suez policy of the United Kingdom, the then Minister for the Army stated that he intended to start a recruiting scheme for British officers who were about to be retired. Can the Minister tell the House whether that exercise has been successful? If it has, how many former British officers have been appointed to the Australian Regular Army? Approximately, what were their ranks? Do they retain those ranks in the Australian Army?


– The scheme to which the honourable member has made reference is indeed an excellent scheme introduced by my predecessor late in 1967. Although at this stage it is still in its embryonic phase, I have no doubt that it will prove to be a very useful recruiting source to the Australian Regular Army. Already we have received a considerable number of inquiries through Army staff headquarters in London and also through Australian Army Force, Far East Land Forces, Singapore. Of the inquiries received, I understand that some five officers have been appointed to the Australian Regular Army. As to that facet of the honourable gentleman’s question which related to the question of rank, the position is this: The British officers who are recruited will receive a rank in the Australian Army commensurate with their experience.

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– The Minister may do that by leave only. I suggest to the right honourable gentleman that he make his statement at the conclusion of question time.


– Is the Minister for Trade and Industry as satisfied with the AustralianJapanese trade agreement as he once was? Does he consider that the time is overdue for a new agreement between Australia and Japan? What new item does he think might enter into increased trade between Japan and Australia and therefore appear in such an agreement?


– I am completely satisfied with the operation of the Australia- Japanese Trade Agreement. The Agreement has led to an immense increase in trade both ways. It has led to a new relationship between the Government of Australia and the Government of Japan. It has led to a new respect by the Australian community and the Japanese community. It has never been part of the Japanese trade treaty that either Australia should be without right and authority to protect her own industries nor that the Japanese Government should be without right and authority to protect its own industries. What I want understood is the clear facts of the matter in this regard and not the distortions which come, as I mentioned, from Mr Maxwell Newton. If

I can help the Leader of the Opposition to identify the gentleman, it is the Mr Maxwell Newton who has worked for and financially contributed to the funds of his former private secretary, Mr Menadue, when he opposed my colleague, the honourable member for Hume, at the last House of Representatives election. It is the same Mr Newton who contributed to the election expenses of the Australian Labor Party in the recent Senate election.

Mr Whitlam:

– I wish to make a statement because I have been grievously misrepresented.


– Order! Does the honourable member wish to make a personal explanation?

Mr Whitlam:

– Yes. Mr Maxwell Newton did not contribute to the funds of the Australian Labor Party either directly or indirectly at the Senate election. The honourable member for Bass (Mr Barnard), who is Deputy Leader of the Opposition, the honourable member for Melbourne Ports (Mr Crean) and I are the sole trustees of the Party’s funds and none of us have received any money from Mr Newton or on his behalf. As to the other statement concerning any contribution in relation to the House of Representatives election for the electorate of Hume, I invite the right honourable gentleman to make his statement outside the House.

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– I present the report of the First Conference of the Australian Presiding Officers and Clerks-at-the-Table held at Parliament House, Canberra, from 23rd to 25th January 1968. This was a most valuable conference and its proceedings will be of great interest to parliaments not only in Australia but overesas.

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Ministerial Statement

Treasurer · Lowe · LP

– by leave - This is the second year in 4 in which very extensive areas of the Australian continent have been severely affected by drought. Indeed some areas have suffered continuous drought for 4 years. As the problems arising from drought conditions in several States are of deep concern to many honourable members, I think the House would find it helpful if I outlined what the Commonwealth is doing to help alleviate those problems.

Drought of the severity that we have been experiencing takes a heavy toll in many ways, and creates many problems. We cannot quantify its effects in precise terms because we do not know just what the position would have been in the absence of drought. Looking at current rural production alone, however, I venture to suggest that, but for the drought, the gross value of rural production would probably have been upwards of $200m greater both in 1965-66 and in 1967-68. The losses due to recent drought, especially the losses of livestock, would undoubtedly have been considerably larger but for the action the Government has taken on a wide front to help alleviate the problems it has created for those who have had to face the brunt of it.

Traditionally, the provision of direct financial assistance and relief for those affected by natural disasters such as drought has been primarily the function of the State governments. They are, in any case, in the best position to assess conditions in their respective States and the needs of those affected by the disaster. Where, however, the disaster requires relatively large relief expenditures, the Commonwealth has usually assisted the State or States concerned by meeting half the cost of such expenditures.

With the development of severe drought in New South Wales and Queensland in 1965, the Commonwealth undertook to provide all the funds needed to finance whatever drought relief measures those States found necessary. Towards the end of October last it became clear that drought relief measures on a large scale would also be necessary in Victoria and South Australia. The Commonwealth therefore agreed to reimburse in full these two States also for whatever expenditure they might incur after 1st October on drought relief measures similar to those adopted in New South Wales and Queensland. It is estimated that, in the current financial year, these drought relief measures will involve Commonwealth expenditure amounting to about $19m. For the 3-year period ending on 30th June, the cost of these measures is estimated at approximately $59m of which $25m will have been made available by way of loans and just on $34m by way of grants.

The relief measures being undertaken by the States under these arrangements have been agreed between the Commonwealth and the States concerned as being the most appropriate to help alleviate the effects of drought conditions on the rural sector of the economy. The basic approach of the Government has been that, as in the case of other forms of natural disaster relief governmental assistance should be concentrated primarily on those who are in real need and who are unable to obtain assistance elsewhere. As a general rule, the general taxpayer should not be asked to provide assistance to those who, though perhaps suffering financial losses, still have ample financial resources or are able to obtain sufficient finance through normal channels to see them through the drought.

Accordingly, it has been agreed with the States concerned that the carry-on and restocking loans should be restricted to farmers who cannot obtain credit through normal commercial channels. The Commonwealth is financing these loans on the basis that the States repay them over 10 years but without interest. Although interest is charged by the States, this is at a low rate - normally 3% - and is designed mainly to help meet administrative costs and losses on loans.

These loans are. of course, additional to the very considerable help which has been extended to drought affected primary producers through the banking system. Although recent figures are not available for actual loans made to the rural sector, the extent of this assistance is apparent from the considerable rise in new lending commitments by trading banks. Thus in 1967 total new lending commitments to rural businesses by trading ‘ banks were $357m, an increase of over 60% on the 1965 figure. This increase in rural lending has occurred with the full support of the Government. With the onset of severe drought conditions in New South Wales and Queensland in 1965, the Government requested the Reserve Bank to make special arrangements with the trading banks for them to undertake lending for carry-on purposes and for longer term projects for restocking and rehabilitation of drought affected properties. The Reserve Bank has maintained close contact with all trading banks operating in drought areas and is continuing to do so. The banks, for their part, have assured the Reserve Bank that they are treating with sympathetic consideration all applications for finance from drought affected primary producers and their continuing ability to do so is being closely watched by the Reserve Bank. The Reserve Bank is also taking action to bring about an increase of some $37m in the Farm Development Loan Funds. This increase will bring the total allocation to $87m and will ensure that resources are available to permit continuance of a steady rate of lending by the trading banks from the Funds.

I should also mention at this point the special arrangements that have been made as regards credit for purchases of wheat for use as fodder. In 1965 the Government arranged through the Australian Wheat Board for the provision of wheat to drought affected farmers on 12 months credit where other credit was not available. Recently the problem of drought feeding of breeding stock has been very acute in parts of Victoria which have perhaps the heaviest stocking rate of any farming areas in Australia. Because of this the Government has made arrangements, similar to those that operated in New South Wales, for the sale of wheat on 12 months credit for use by farmers in drought areas in Victoria. This credit will be available to all farmers in droughtdeclared areas in the State who wish to make use of it.

The Victorian Government has decided to provide, also a special subsidy on purchases of wheat and oats by drought affected farmers. The cost of this measure, which is outside the ambit of the normal drought assistance arrangements between the Commonwealth and the State, will be met from the Victorian Budget. The Commonwealth recognises, however, that Victoria is faced with a special problem on this account and has offered to provide an amount of $lm which will help the State in meeting the cost of the subsidy. I shall refer to this special revenue assistance again later.

Assistance is also being provided under the arrangements between the Commonwealth and the States in the form of subsidisation of the transport of fodder and water to drought affected areas and the transport of starving stock out of drought affected areas. The cost of these subsidies to the States is being fully reimbursed by way of grants from the Commonwealth, which will have amounted to about $12m in the 3 years to the end of the current financial year. The extent and importance of these subsidy arrangements is, perhaps, not fully appreciated, lt would not be practicable for me to spell out here all the details of the arrangements, which vary slightly from State to State. However, in broad terms it can be stated that a drought affected farmer who purchases fodder foi his starving stock has to meet only 25% to 50% of the cost of the rail transport of the fodder. In many cases fodder is being brought to drought areas from interstate. Victoria and South Australia have found it necessary to import oats from Western Australia and special arrangements have been agreed with the governments of those two States to subsidise the cost of the transportation.

Similar subsidies are being provided in the case of farmers who wish to send their starving stock out to agistment and, where rail transport is unavailable or impracticable, the subsidy arrangements extend to road transport also. Here again considerable numbers of stock are being sent interstate, particularly from Victoria to northern parts of New South Wales. It is indeed fortunate that, at a time when drought conditions are prevalent through southern New South Wales and Victoria, most of the northern half of New South Wales is experiencing an excellent season. In consequence, there is good agistment available and, through the freight subsidy arrangements, farmers in Victoria and southern New South Wales are able to take advantage of it.

In addition to measures designed to help individual farmers, considerable Government expenditure on a variety of activities is being undertaken to alleviate conditions in drought areas. Here again the State governments and their authorities are undertaking these activities and are being fully reimbursed by the Commonwealth. In this context I would mention particularly the grants being made to local authorities to enable employment of persons who are either unemployed as a result of the drought or who are temporarily unable to work their farms for the same reason. Commonwealth grants to the States for this purpose will have amounted to about $21 m in the three years to the end of the current financial year. Other State expenditure of this nature which is being met by the Commonwealth includes expenditure on running costs of additional cloud seeding operations and special measures designed to maintain water supplies in droughtaffected areas.

Finally, I would recall that in 1966-67 the Commonwealth provided $8m to New South Wales and $2.75m to Queensland to help those States in meeting budgetary problems arising from the effects of drought on their revenues. A further S14m is to be provided this financial year. Of this amount, $13m is to be divided between the four affected States in proportion to the financial assistance grants that will be received by them this year. The other $lm is to be provided to Victoria in recognition of the special problems being faced by that State. On the basis of current estimates the distribution of the S14m would be as follows:

The Commonwealth has also provided financial relief to drought-affected farmers through a number of taxation measures which have been specifically introduced with this aim. Thus, wool growers who, because of an advanced shearing due to drought, sell two wool clips in a year, may reduce their income by the amount of the net proceeds of the second clip and carry that amount forward to the next year. Concessions have also been made in relation to the taxation of proceeds of forced sales of livestock due to drought and in relation to the averaging of incomes for tax purposes. Losses by primary producers may now be carried forward indefinitely for taxation purposes. Apart from these concessions, drought-affected primary producers in financial difficulties are receiving sympathetic consideration from the Commissioner of Taxation in relation to requests for extension of time to pay income tax.

It will be apparent to honourable members that the Commonwealth Government has been undertaking, and is continuing to undertake, considerable expenditure over a wide front to help alleviate the effects of drought. Apart from the provision since 1965 of nearly $25m of special revenue assistance to the States, over the same period the reimbursement of State expenditure will, by the end of the current financial year, have involved the Commonwealth in additional expenditure of about $59m. Details of this expenditure are set out in the following tables which, with the concurrence of honourable members. T incorporate in Hansard.

Despite recent rains, an important segment of Australia’s rural economy, one which contains perhaps one-third of Australia’s sheep population, is still facing a serious drought situation. The Government recognises this and it will continue to provide assistance and relief along the lines I have indicated just so long as this is necessary. At the same time it should also be recognised that governmental action can do no more than alleviate the position. It is not possible, in practical terms, to avoid some adverse effects from drought, particularly if it continues for any length of time. We all hope for a quick return to better seasonal conditions in the areas where drought still persists. I present the following paper:

Commonwealth Drought Assistance - Ministerial Statement, 27 March 1968- and move:

That the House take note of the paper.

Debate (on motion by Mr Beaton) adjourned.

page 490


Ministerial Statement

Minister for External Affairs · Curtin · LP

– by leave - I wish to inform the House that Australia will be represented at the International Conference on Human Rights to be held in Teheran next month by a delegation led by the AttorneyGeneral (Mr Bowen) and including two members of the Commonwealth Parliament.

The United Nations General Assembly decided on 20th December 1965 to hold an International Conference on Human Rights in Teheran from 22nd April to 13th May 1968. The General Assembly has also designated the year 1968 as Internationa] Year for Human Rights. It is the 20th anniversary of the adoption and the proclamation of the Universal Declaration of Human Rights.

The International Conference at Teheran will be one of the major international events associated with the International Year for Human Rights. All member states of the United Nations and the specialised agencies have been invited to participate. Provision has also been made for representation of some of the non-governmental organisations, and of specialised agencies and other bodies.

The aims of the Conference are:

  1. To review the progress which has been made in the field of human rights since the adoption of the Universal Declaration of Human Rights;
  2. To evaluate the effectiveness of the methods usedby the United Nations in the field of human rights, especially with respect to the elimination of all forms of racial discrimination and the practice of the policy of apartheid.
  3. To formulate and prepare a programme of further measures to be taken subsequent to the celebration of the International Year for Human Rights.

The Conference will deal with a wide range of subjects. It will be concerned with issues arising from various United Nations conventions, covenants, declarations and recommendations on human rights, and also subjects like apartheid, racial discrimination, self-determination, slavery and colonialism. The Australian Delegation will be:

The Honourable N. H. Bowen, Q.C., M.P., Attorney-General - Leader of the Delegation;

Mr O. L. Davis, First Assistant Secretary, Department of External Affairs;

Senator L. K. Murphy, Q.C.;

Mr A. S. Peacock, M.P.;

Mr H. A. Snelling, Q.C., Solicitor-General for New South Wales;

Mr J. A. Benson, Australian Mission to the United Nations, New York, Adviser; and

Mrs Tonia Shand, United Nations Branch, Department of External Affairs, Adviser

page 490



– I have received a letter from the Speaker of the Parliament of Mauritius thanking this Parliament for the gift of an inkstand made of specially selected Australian woods which was presented to the Parliament of Mauritius on the occasion of the independence of that country. The Speaker, Mr Vaghjee, stated that the gift would be a constant reminder of the ties of friendship which unite our two Parliaments and countries.

page 491



– I present the following paper:

Report of the Delegation from the Commonwealth of Australia Branch of the Commonwealth Parliamentary Association to the Thirteenth Commonwealth Parliamentary Conference held in Kampala and move:

That the House take note of the paper.

The report I have just presented relates to the visit of the delegation from the Commonwealth of Australia Branch of the Commonwealth Parliamentary Association to the Thirteenth Parliamentary Conference held at Kampala, Uganda, during OctoberNovember last year. It deals with the Conference, the meetings of the General Council, the General Meeting of the Association and the visit to Uganda and Kenya. The delegation comprised Senator Marriott as leader of the delegation and a Branch Representative on the General Council, Senator Benn, and the honourable members for Bowman (Dr Gibbs), Hunter (Mr James), Hume (Mr Pettitt) and myself. The honourable member for Fawkner (Mr Howson) also attended the Conference in his capacity as Chairman of the Working Party of the General Council.

On behalf of all members of the delegation I would like to say that we were highly honoured and privileged to represent the Australian Branch in Kampala and we endeavoured to uphold the high standards maintained by previous delegations from this Parliament. Sixty-four branches of the Commonwealth Parliamentary Association were represented at the Conference by some 122 delegates who were accommodated in the Apollo Hotel in Kampala. The practice of previous conferences continued and new friendships were made and old ones renewed and strengthened to the mutual benefit of all concerned. This, to me, was one of the great beneficial results from attending the Conference of the Commonwealth Parliamentary Association.

The proceedings in Kampala were spread over 8 days, and included four plenary sessions, plus three committee sessions during which two committees met concurrently, three meetings of the General Council and also a general meeting of the Association.

This report has been circulated to all senators and members, State and Territory branches and to all active branches overseas and associate members of this Branch of the Association. The verbatim report of proceedings will be issued later in the year by the General Council and is recommended to all honourable members. I know that honourable members have already received reports of the consensus of the debates issued by the General Council and are therefore aware of the trend of the discussions at the Conference, which ranged over a wide field and included international affairs, Great Britain’s proposed entry into the European Economic Community, parliamentary institutions and aid to developing countries.

The subject of Rhodesia was hotly debated, as it had been in previous years. The failure of sanctions to bring the Smith regime to its knees had some delegates demanding the use of force by Great Britain to remove the rebel administration. The leader of the British delegation spoke very strongly and forcefully in reply in his speech winding up the debate. The proposed entry of Britain into the European Economic Community proved to be a very interesting discussion and delegates were not slow in placing the problems that would face their respective countries before the Conference if and when Britain eventually entered the Common Market.

As a representative of a very large and important dairying electorate, I was very disappointed with the remarks of the British Secretary of State, Mr George Thomson, when he reiterated that the onlysafeguards for primary products from the Commonwealth on Britain’s entry would be for sugar and for meat and butter from New Zealand. He pointed out that we in Australia had had ample time since Britain made her formal application to join the Common Market in 1961 to diversify our production and find other markets, especially for butter. We were able to point out to bini that the dairying industry had made great progress in recent years in diversification with such products now as reconstituted milk manufactured in South East Asian factories, casein for sale to Japan and the United States of America and the great increase in cheese sales to Japan. At the same time we pointed to the fact that new markets were becoming increasingly harder to obtain because of the dumping policies of the countries in the European Economic Community. It was pointed out that 5 years ago the average amount of butter held in cold storage in those countries averaged 100,000 tons a year, but today, due to the price support programme, the amount held is 250,000 tons. Some of this is dumped into countries, such as the Middle East countries, at the equivalent of 20c per lb Australian, or at about one-third of the cost of production.

We were able to point out to Mr Thomson that Australia’s dairy farmers could not hope to compete at prices such as these and therefore our efforts at finding new markets are made very difficult indeed while such dumping practices continue. Prior to the Conference I was very pleased to be able to spend 2 weeks in the Common Market countries studying this price support programme, the way in which these countries and the Commission itself operates in releasing butter overnight to various countries within the Common Market at a reduced price in order to step up consumption, and the methods that are used in getting butter and other products into other parts of the world at very reduced prices.

The delegates from tropical and subtropical parts of the Commonwealth expressed grave concern to Mr Thomson regarding sugar. He said that there would be a safeguard for sugar. But the delegates pointed out that the Common Market countries themselves produced 109% of their own requirements of sugar. They expressed concern as to what would happen in 6 years time - in 1974 - when the present Commonwealth Sugar Agreement expired. They pointed out that they will be confronted with the problem of disposing of this vast amount of sugar which is grown in these Commonwealth countries and which in many cases is the sole export earner. As I have said, the debate on the European Economic Community and the effect on the Commonwealth if and when Britain is permitted to enter the Community was a very interesting discussion and one from which we gained a vast amount of information.

The other committee discussions were very well attended, and the contributions from delegates were, in the main, thoughtful and very well prepared. Honourable members will be pleased to learn of the establishment of an executive committee of the General Council to deal with the management problems of the Association. The Australian Branch first mooted this idea at the New Zealand Conference in 1965 and in more positive form at the Ottawa Conference in 1966, resulting in the establishment of a working party under the chairmanship of the honourable member for Fawkner. The working party met in Malta in 1967 and reported in some detail to the General Council in Kampala. A summary of the more important working party recommendations appears in the report presented to the House.

The recommendations of the working party were agreed to in toto by the General Council and confirmed at the general meeting of the Association. The honourable member for Fawkner was elected unanimously to the position of chairman of the new executive committee for 3 years. I extend my sincere congratulations to him for having this great honour bestowed on him and also for the very able manner in which be represented this country in Kampala. The executive committee will be holding its first meeting in Mauritius in June. Of the recommendations contained in the working party’s report one of particular interest to Australia was that outlining the possibility of arranging courses in Australia in parliamentary practice and procedure in addition to those already held in Westminster. Th:s matter is under active consideration at the moment. Honourable members are no doubt aware that the next conference is being hosted by the Bahamas Branch at Nassau in October and November this year and they will, I am sure, be pleased to hear that Australia has offered to host the 1971 Conference. Honourable members will recall that the sixth CPA Conference was held in Canberra in 1959.

Mr Deputy Speaker, 1 join with the Leader of the delegation in paying high tribute to the secretary of the Australian Commonwealth delegation, Mr Doug Blake. His zeal and attention to detail at all times did much to ensure the successful participation of our delegates at the conference. He was always ready and willing to assist our delegates in matters beyond his normal duties as secretary to the delegation, and his friendly and co-operative manner won friends for himself and a high regard for Australians generally from members of other delegations. In the pre-conference tour of Uganda Mr Blake joined me in Party X, a group of eight delegates who visited the Kidepo National Park in the north east section of Uganda, travelling in President Obote’s private plane. Thus 1 was able to appreciate his worth beyond the conference room and 1 thank him on behalf of all members of the delegation. I might add, in case his colleagues did not believe him when he returned home, that he also established himself as a fisherman of note, landing several large Nile perch, one weighing 132 lb. This matter was referred to in the opening speech to the Conference by the Chairman of the Association. In conclusion, I commend the report to all honourable members and strongly urge them to continue their support of the Commonwealth Parliamentary Association and what it stands for.


– 1 associate myself with the remarks of the honourable member for Braddon (Mr Davies). I felt privileged to be able to attend the conference. It was a conference of considerable value. Very satisfactory arrangements were made for the visiting delegates to see something of the country and to assess some of the problems of the country. This is a very good arrangement. It also enables delegates to meet and to get to know one another and this has a bearing on the subsequent debates. The honourable member said that the problem of Rhodesia was raised. The debate on this issue was rather hectic, but it would have been much more hectic if the delegates had not already met and heard the differing views. Many of the delegates hit very hard, but underlying the debate was a feeling of friendliness and understanding, and this was most important. Without it the debate may have gone beyond reasonable bounds.

The problems raised by the formation of the European Economic Community were discussed. The very pressing problem of food production and the increase of world population occupied one committee session. The debate was of a high order and showed that delegates had done a good deal of work. Many, though by no means all, of the delegates were aware of the tremendous problems created by the rapid increase of the population of various countries. Disease generally has been checked and many fatal diseases have been conquered. As a result, populations are increasing by leaps and bounds. Some countries have difficulty in maintaining an economy that will meet the needs of the increasing population and other countries are unable to deal with the problems adequately. Increasing misery and starvation are the result and this will have very serious repercussions in the very near future. Britain’s efforts to join the European Economic Community have been mentioned. Britain will be required to subscribe to the Treaty of Rome. This is a very inelastic treaty. It sets up a supranational organisation to control the economic affairs of the members and it must have repercussions in other areas, such as defence and transport. Under this arrangement, parliamentary democracy will be considerably weakened and important decisions that would otherwise be made by a government will now be made by the supranational body, which is not responsible to the people. This very important point should be borne in mind by those people who consider subscribing to the Treaty of Rome.

Some of the problems and difficulties inherent in the parliamentary system were also discussed at the conference. 1 was unable to attend this discussion because I was present at other discussions that were held at the same time. However I understand that the debate was very good. I would make one suggestion. A good deal of time was devoted to delivering papers and virtually no time was left for discussion. The Commonwealth Parliamentary Association may consider making more time available for debates or restricting the first half of the time allowed for a debate to the submission of prepared papers and keeping the remainder of the time for discussion of the papers. I am sure such an arrangement would prove to be helpful. I would like to pay my own tribute to Mr Doug Blake. He was a most pleasant companion and he worked very hard. Nothing was too much trouble for him. He was most conscientious. We were very happy to have his company and we benefited from the tremendous work he did for us. Without his assistance we would have experienced difficulties.


– I am glad to be able to take part in this debate on the report of the Australian Branch delegation to the 13th Conference of the Commonwealth Parliamentary Association at Kampala. I am pleased that this has become an annual debate. It enables us to bring the work of the Association before the House. I have attended two other conferences and I would like to pay a tribute to the Australian Branch delegation on this occasion. I was not a member of the delegation but I was able to observe the work that it did. The members of the delegation represented the Australian Parliament with great distinction. The members who have spoken and also the honourable members for Hume (Mr Pettitt) and Hunter (Mr James) did a great job of which Australia can well be proud, and I join in this tribute to the leader of the delegation, Senator Marriott.

The Association is now much better prepared than it was in past years to face contentious issues squarely and without too much heat. The honourable member for Bowman (Dr Gibbs) has already mentioned this point. Now that the Association has learned to deal with contentious issues, it is playing a much more forceful and important part in the world. The issues of Rhodesia and the implications of Britain’s application to join the European Economic Community were faced squarely. These problems were examined in depth, both formally in conference and informally in a series of discussions throughout the week that we were in Kampala. Unlike other gatherings of delegations from various countries, such as the United Nations and the InterParliamentary Union, delegates to the Commonwealth Parliamentary Association do not take up previously prepared positions from which no movement is possible. There is a willingness to state the issues and to listen to the problems of others. The attitude of Senator Stollmeyer of Trinidad and Tobago was an example to many other delegates. I could sum up the feelings of the delegates as to the importance of the Association today in the words of a senior delegate from India who said that in his opinion the task of the Association today was to examine in depth those issues which divide us and to reinforce the links that hold us together. In the Commonwealth

Parliamentary Assoiation, it is possible for us to exchange views in the English language and we are all members of Parliament. No other organisation today is able to discuss the tremendously important issues that face us in such depth and with such a feeling of friendliness amongst the delegates.

I should like for a moment to refer to the new executive committee of the Association. It was set up after the meeting in Kampala. The recommendations of the working party that met in Malta last year were unanimously accepted. The new committee is to my mind an extremely strong and worthwhile committee with a highly qualified membership. I believe that the lobbying by delegates for votes to elect them to the Committee indicated the conviction of all the delegates present that this Committee will prove worth while and important to the future progress of the Association. I believe also that there is a feeling that the importance of the Association is growing. This is indicated by the number of invitations received for future conferences. One has been mentioned already by the honourable member for Braddon (Mr Davies). In addition; invitations have been received from other branches for representatives to attend meetings cf the Executive Committee, not only in Mauritius later this year, but also in Singapore next year, as well to attend meetings of Branches in places such as Gibraltar, Gambia and Jersey in years to come. I think we can foresee a more important role For this Association in the years ahead as a result of developments that have taken place over the last 1 2 months. The role of the SecretaryGeneral has increased in importance as a result of these developments. I believe that it will be necessary for the Australian Branch, along with other branches, to increase its contribution in order to promote the work of the Association.

I should like also to pay a tribute to Doug. Blake, the Principal Parliamentary Officer of this House, not only for the work that he did at the Conference but also for the help that he has given in compiling this report so quickly and so successfully. I say in conclusion that the Commonwealth Parliamentary Association has grown tremendously in strength over recent years. I believe that in this growth no small part has been played by the Australian Branch, and particularly by the President of the Senate and the Clerk of this House, who have done so much and have devoted so much time to thinking about the ways in which the Association can play its proper role in the world today.


- Mr Deputy Speaker, I support the remarks made by the honourable member for Braddon (Mr Davies), the honourable member for Bowman (Dr Gibbs) and the honourable member for Fawkner (Mr Howson). I, too, should like to pay a tribute to the leader of the delegation, Senator Marriott, who did a tremendous job and at all times had the confidence of the whole Australian group. I endorse also the compliments paid to Mr Doug Blake. I agree wholeheartedly with all that has been said about him. He was a tremendous help to the delegation at all times. It might be appropriate for me to direct the attention of the House to the fact that sitting in the Speaker’s Gallery at the moment is a young Australian who served for 71/2 years in Uganda and whom we met while we were there. She has been doing a tremendous job. Efforts like hers are significant, for I believe that there is a tremendous opportunity for young Australians to serve in developing countries. 1 assure this young lady that we all are pleased to see that she is present in the Speaker’s Gallery to hear us report on the Conference of the Commonwealth Parliamentary Association that was held in Uganda.

It is a compliment to anyone to be selected to attend such a conference. One of the advantages of attending is that, not only doe, one derive benefit from the conference itself, but also one has an opportunity to visit other countries. Government help in many ways and assistance towards the payment of fares make it possible for the individual, without too great cost, to visit a number of other countries. Opportunities to make such visits are extremely important to us in Australia. Apart from attending the recent conference, I did most of my travelling independently. I went to South Africa, Tanzania, Kenya, Ethiopia, Iran and India and returned through South East Asia. 1 cannot pay too high a tribute to the officers of our Department of External Affairs for the way in which they made it possible for me, in a short time, to learn something of the background and the problems of the countries that I visited. Our trade commissioners, too, were most helpful, as were our Service representatives, particularly in Djakarta. Everywhere I travelled, 1 found that our Minister for External Affairs (Mr Hasluck) was held in extremely high regard. I found, too, that Australia had a very high standing among the developing nations, particularly in South East Asia.

Turning directly to the Conference, I want to say that it was quite an experience to attend a meeting at which some 37 nations were represented by 120 delegates. Those nations were once parts of the former British Empire, now known as the Commonwealth of Nations. Not many of the delegates were of European extraction. Most of them were coloured people and many different races were numbered among them. Yet they all were able to express themselves fluently in excellent English and to understand one another readily. Witnessing this was in itself a significant experience. One of the things that impressed me most was the fact that, although the representatives of these former parts of the British Empire were critical at times of the mother country, they all still had tremendous respect for her, and especially for her parliamentary institution. They plan to model their new democracies on the British pattern as far as they are able. Sometimes we wonder just how they can apply the British parliamentary system in their own countries, but they are certainly doing their best to plan their democracies on the British pattern. I gathered from talking to other delegates at the Conference that most members of the Commonwealth want it to persist. I am aware that there may be a good deal of self interest in this, because they gain a lot from the Commonwealth. The various member countries want the Commonwealth to continue, for they believe that they can be of tremendous help to one another.

A considerable range of debates took place at the Uganda Conference. I was asked to take part in four in all. That was more than I had intended to take part in, and I take it as a compliment to the delegation rather than to myself. I was asked to open one of the debates, mainly, I suppose, because the subject was one in which I am closely interested - the application of scientific research and technical services in developing countries. It is interesting to record that most of the countries in the Commonwealth regard not only the United Kingdom but also Canada, New Zealand and Australia as the developed countries of tha Commonwealth. Indeed, they consider that Australia is a well developed country and they expect to get a lot of help from us, as well as from other Commonwealth countries that they regard as developed. I believe that we have a tremendous opportunity to assist developing countries, perhaps more particularly those of South East Asia. This fact was brought home to me very significantly as I talked with young people in the places that I visited, particularly in South East Asia. Only this morning, the Minister for External Affairs said that we in Australia have a unique image in the developing countries, particularly those of South East Asia. He said that we have an opportunity to do things in a unique and unusual way in which many other European nations are not able to do them. Perhaps this is because we are prepared to take our coats off and show how a thing ought to be done. Furthermore, we are not associated to a great degree with the old colonial powers. The people of the developing nations know that we are not a military threat and that we are not a great financial colossus that attaches a string to every gift it makes and every contract it writes. We are known as a people who are fairly easy to get on with and who do not patronise others.

I believe that one of the great lessons to be learned from the recent Conference is that Australia is faced with a challenge that becomes greater every year. The Australian delegation, in my view, made a very good impression. It is important that delegates who attend conferences of the Commonwealth Parliamentary Association realise that they represent Australia and, most of all, that Australia has such a good name. They must remember that the continuance of that good name is in their hands. I look forward to hearing what those who attend the conference to be held later this year have to say on their return. I suggest that it is well worth while for any member of the Federal Parliament to attend such conferences and to see as much as possible of the other countries that are important to us.


- Mr Deputy Speaker, I endorse the remarks made by my colleague, the honourable member for Braddon (Mr Davies), the honourable member for Bowman (Dr Gibbs), the honourable member for Fawkner (Mr Howson) and the honourable member for Hume (Mr Pettitt) about the Commonwealth Parliamentary Association Conference that was held in Uganda last year. I should like to say how beneficial it is to members of this Parliament for them to be able to meet their brothers and sisters in other parts of the Commonwealth of Nations at these important conferences. I pay a tribute to the Government of Uganda, a country which has had its independence for only about 6 years and which is going through the teething troubles of self government. I believe that the Government there is doing a good job. When I think of Uganda’s shortcomings at this stage of its history T recall the shortcomings and errors in Australia when New South Wales first gained independence. I recall reading a book entitled The Scandals of Sydney Town’, which refers to the early days when citizens were more anxious to become members of Parliament than they are today. Wages were not paid to members in those days; they depended mainly on the land rackets to enrich themselves. One should remember these things before criticising the shortcomings of the Uganda Government.

Our hosts, the Uganda Government, went to great extremes to extend every possible courtesy to the delegates who visited their small and beautiful country last October. The Australian delegates made many and lasting friendships with members of parliament from other parts of the Commonwealth. I believe the Australian delegates made worthwhile contributions to the debates. Both on and off the field - if I may be permitted to use such a phrase - they were a credit to Australia. I was disappointed to learn that in Uganda the gross national product represents about £25 sterling per head of population. When we compare this with our living standards we must be inspired to give to these developing countries to the extent that it pinches us. We must help them to raise their living standards.

The bringing together of delegates in tours to various parts of Uganda before the Conference commenced took the bite, as it was intended to do, from some of the speeches at the Conference, and helped towards understanding of other points of view. I had the happy experience of visiting the great Murchison Falls on the Nile. Some of the Canadian delegates described them as greater even than Niagara Falls in North America. It was a wonderful experience to see the River Nile, the second largest in the world after the Amazon, with millions of tons of water flowing over the Falls. The debates at the Conference were worth while and I benefited from listening to them and from participating in them.

I had not made up my mind on the Rhodesian question before the Conference, but after listening to the British delegates I. thought that I had to come down on the side of Great Britain. Rhodesia is a problem, but it is a problem to be solved by Britain. All Australian and New Zealand delegates supported Great Britain. The discussion on the Rhodesian situation was the most heated debate at the Conference. As a person who abhors war I do not want to see Africa plunged into a bloody war similar to that which is being waged in Vietnam. It is easy to start a war - and some delegates from the coloured countries wanted to do so - but it is very hard to stop a war. The British delegates described Rhodesia as a landlocked country and said that it would be foolish to put land forces into Rhodesia as they had been trained in neighbouring Zambia for about 12 months. If they were not properly trained Ian Smith’s powerful Rhodesian Air Force could wipe Lusaka off the map. The British delegates also said that the British people would not support action to invade Rhodesia. They emphasised the urgency of even stronger economic sanctions as a means of bringing the illegal Smith regime down. Britain and members of the United Nations believe that there should be one vote one value in Rhodesia and that all citizens of Rhodesia who are over the agc of 21 years should have the right to vote at election time.

The Apollo Hotel in Kampala is a credit to the Uganda Government. I favour government instrumentalities and we should follow the lead of Uganda by building government owned and government con trolled hotels to accommodate tourists to Australia. I pay a tribute to the leader of the Australian delegation, Senator Marriott. He was a worthy leader. He gave good leadership and kept remarkable harmony among members of the Australian delegation. I, too, pay a tribute to the secretary of the Australian delegation, Mr Doug Blake, who unstintingly gave most of his time to attending to requests of the Australian delegates. 1 have happy memories of my visit to Uganda as a delegate to the Conference. Many worthy organisations inside and outside my electorate have benefited from the information that 1 have been able to impart to them in talks since my return.

Mr Duthie:

– Did the honourable member buy his safari jacket in Uganda?


– Yes, I did. That is the jacket that has aroused so much interest in this place in recent weeks. I took part in a debate on war and peace while at the Conference. I emphasised the need for nations to get together because, as was said by a former secretary-general of the United Nations, due to fast air travel the world is becoming a backyard of nations. 1 referred to man’s capacity to control his own environment, to end hunger and thirst, to conquer poverty and disease, to beat illiteracy and to remove human misery. I concluded by saying that man had the opportunity to make this the best generation of mankind or to make it the last.

Question resolved in the affirmative.

page 497


Second Reading

Debate resumed from 20 March (vide page 259), on motion by Mr Fairbairn:

That the Bill be now read a second time.


- Mr Deputy Speaker, this legislation which, on the surface, appears to be quite innocuous purports to deal with amendments to sections 16 and 146 of the Petroleum (Submerged Lands) Act 1967. The first amendment - to section 16 - is consequential on the alteration in the title, status and administration of the Minister for External Territories and the Minister for the Interior. The other amendment is the one on which we join issue.

My preliminary comment is that it is a typical example of slovenly drafting. The old maxim used to be: Marry in haste and repent at leisure. With this Government, it is a case of legislating in haste and amending at leisure. The figures ‘43’ will be omitted from paragraph (a) of sub-section (2.) of section 146 and the figures ‘44’ will be inserted in their stead. This amendment is to correct an error by the draftsman but in the process of doing this it opens up very important issues.

It is worth reminding honourable members of what section 146 contains. This section refers to the ‘Barracouta and Martin Fields Petroleum Production Licences to have effect as production licences for petroleum under this Act’. This Act was passed by the Parliament in October and November of last year. In particular, the purpose of section 146 was to give a cloak of legal validity to certain production leases which were entered into between the Victorian Bolte Government and the Esso-BHP group prior fo the Commonwealth exercising its undoubted constitutional rights.

The section, together with the proposed amendment, proposes to make licences granted by the Victorian Bolte Government transferable and equal to licences under the present Act. It is worth noting that the licences as referred to are in the Third Schedule of the Act, which again is worth mentioning. I refer honourable members to it. In the Third Schedule, with reference to the Barracouta and Martin fields petroleum production licences, agreements are made between the then Minister of Mines of the State of Victoria and Haematite Explorations Pty Ltd, which is a subsidiary of Broken Hill Pty Co. Ltd, and Esso Exploration and Production Australia Inc. The Third Schedule sets out the period of the licences. It sets out the royalties to be paid. It has as an annexure maps delineating the particular areas in which the activities of the company are to be conducted.

Much has happened since October 1967. Regrettably, at the time when this House was considering the original legislation, no picture was available as to the productive capacity of the Esso-BHP group from the fields which are the subject of section 146. But subsequently, within 2 weeks of the legislation being passed by this House, this group disclosed its full hand and proudly stated that by 1970 it would be producing 160,000 barrels of crude oil per day. The company then went so far as to state that there would be 100,000 barrels per day in the Kingfish field, 50,000 in the Halibut field and 10,000 barrels per day from the Martin field. This is very nice indeed and very comforting news to Australia. The resultant gambling and speculation on our stock exchanges were perhaps the most hectic in the history of those institutions.

The point that mainly concerns the Opposition is the new situation that arises from these revelations and particularly the impact on the production income of this group of companies of the subsidy of SI per barrel to be given as a production incentive. Figures issued a couple of weeks ago showed that the Esso-BHP group expected to produce 240,000 barrels per day by late 1970 equalling at least 60% of Australia’s estimated needs by the end of that year. At the present time, of course, the percentage of Australian crude oil refined for Australian consumption compared with total Australian consumption is 7%.

I wish to point out what the profits and royalties are from Bass Strait oil. I quote from the ‘Australian Financial Review’ of 14th November 1967. It is stated that the geologist of world-wide eminence, Mr Louis Weekes, will receive $5. 3m per year from oil operations. That is his 2i%. The Federal Government will receive some $8. 5m per year while the Esso company will receive $35m and BHP will receive $35ni. These are the estimated figures issued immediately after the initial announcement by the company. The production of the Esso-BHP group for the year ending 31st May 1969 will be quite small. Drilling is still going on. Pipelines are being made and shore works are being established. In the next year, 1969-70, a substantial increase will take place. There will be 25 million barrels for that year. It was estimated last year that 50 million barrels will be the figure for 1970-71. But now the true figure is estimated as being over 93 million barrels per year. This company and its American associate will draw a total subsidy of $93 m on that production figure.

These facts were not in contemplation when the legislation was passed by this Parliament. It poses new problems for this Government and also for the Australian motoring public who will be expected to cover the whole cost of the subsidy by price increases imposed progressively. I know that the protagonists of the Esso-BHP group immediately will rush into the ring and say: Look what its outlay will be’. The outlay by this company up to date is SI 50m. Once it gets fully into its stride, it will not take much more than 1 year’s gross subsidy to cover the total cost of its outlay. There are some substantial concessions made to the company in the field of taxation and exploration subsidies with which I will deal later.

The subsidy itself was arrived at following on but not being fully related to an inquiry made by the Tariff Board on a submission to it by the Minister for Trade and Industry (Mr McEwen). That report was dated 23rd July 1965. If Australian petroleum is to be used exclusively when we reach full production, it would appear that at least 3c to 4c per gallon will be added to the price of petrol. The Tariff Board made certain recommendations which were not accepted by the Government. The recommendations were based on the particular needs at that time of the Moonie field which was having specialised problems. T do not cavil at the particular solutions offered by the Tariff Board for Moonie. But the main point is this: The starting point of the Tariff Board, in relation to the general inquiry, was what should be the price of Australian crude having in mind that Australian crude was to be refined in Australian distilleries in substitution for imported crude? The Tariff Board adopted a basis in terms which I quote from page 15 of its report. It stated:

The Board considers that in the absence ot any other basis it is expedient in valuing Australian crude oil to use in the first place the published prices of the principal crude oils being imported into Australia. It has been shown earlier (Table No. 11) that the principal crude oils imported into Australia in recent years originated in the Middle East, Indonesia and Borneo.

This is of importance also: The Tariff Board did not probe fully into the real cost of production at the well head of the Australian crude oil. It chose instead to accept the undiscounted prices which were calculated, published and charged by overseas producers. The Tariff Board’s comment was:

The use of undiscounted ‘posted’ prices -

It should be borne in mind that 70% of our crude oil comes from the Persian Gulf at the present time. The statement continues: means in effect that the f.o.b. prices of imported crude oil used by the Board in its calculations- will be higher than the actual f.o.b. prices paid by the Australian refineries. However, as most of the crude oil imported into Australia is imported by companies which are affiliated internationally with the producers of that crude oil, the level ot discounts received need not necessarily be related to the price of crude oil in a free world market.

The Board does not accept that the ‘discounted’ price has real meaning in those cases where overseas producers supply crude oil to their affiliated refining companies in Australia.

There is a very considerable profit component in the price of crude oil as it comes into Australia. Whilst the Tariff Board chose to accept these figures in respect of Moonie crude, the price of imported crude, which is shown in Table No. 12 of the report was SUS1.82 per barrel. The cost of freight in United States currency was 56c per barrel and the price for wharfage and other charges was 10c per barrel. This gave a quality differential of SUS0.25 and the margin of assistance - that is production assistance - was SUS0.25. This made a total assessed recommended price of SUS3 per barrel of Moonie crude.

The Tariff Board did not consider other factors which must be taken into consideration if we are to evolve a proper price structure for Australian crude in the fond hope that this Government one day will ultimately establish a national fuel policy. Firstly, there is world over production in oil, so that listed prices as quoted are a polite fiction to say the least. A full inquiry was not made into the well head price paid for the Persian Gulf oil. Nor was it considered that the royalty payable to the Arab sheikhs is between 50% and 60% of the well head price. Other factors that have to be taken into account are that in the last 3 years there has been further progress in the development of mammoth tankers and competitive reductions in the freight on oil from the points of production to the points of refining and consumption.

The Republic of India took direct action, not being able to get a credible answer from the various oil companies operating within its boundaries on crude prices and chose deliberately to purchase in bulk to obtain the crude oil requirements of all companies. Nothing like that has ever been attempted by the Australian Government. Even when production is at full blast, it will still be necessary for Australia to import certain types of crude into this country. For many years there has been not merely guerrilla warfare, but I would say full legal warfare, between the Commissioner of Taxation and the Shell Company of Australia Ltd in relation to the actual profits of that company on imports of crude oil. It appears that the oil marketing companies selling petroleum products in Australia tend to low profit operations with parent groups, relying on well head production in the Middle East and elsewhere to provide the bulk of group profit. Speaking in the vernacular, there are no flies on these people. Probably only a handful of individuals in overseas major capitals would have access to the complex statistics. But this is the general pattern: There is no company tax in most of the Middle Eastern countries. These oil companies are major international operators. In order to keep taxation to a minimum, their main profit structure is based on operations in one of these Middle Eastern principalities, sheikhdoms, or whatever you like to call them. But the profitability of the Middle East production which accounts for about 70% of our oil, has generally been the main source of profit of these companies. In other words, they do not take their profit in Australia. For taxation purposes in Australia they minimise - that is a euphemism which is usually employed - their book profits to the ultimate. We have heard a great deal of propaganda emanating from the oil companies to the effect that Australian crude will always be dearer than that which is imported. I doubt whether this will be so.

There is a need for a full inquiry by the Tariff Board into the real cost of production at the well head in Bass Strait of Australian crude. If this is -undertaken the results could be surprising. In that regard I will be moving in the committee stages an amendment that will permit of the price structure of Australian crude being referred back to the Tariff Board. The Board stated on page 19 of its report:

In the event of Australian production of crude oil being capable of satisfying a large proportion of demand, an earlier review than the 1970 review mentioned by the Minister may be desirable.

Precisely that situation has arrived today.

It would be shocking to contemplate that in a country whose Prime Minister has just said that we face the prospects of heavier taxation for reasons that he has advanced, we should be gratuitously handing over to an American company a 50c per barrel subsidy on an estimated production of 240 barrels of crude oil per day. It is something that no government with a proper sense of national responsibility should contemplate or accept. It is true that there is need for a limited subsidy because there are four different types of companies operating in Australia today. There are those which have proven successful fields and which are entitled to a reimbursement of their expenses and a legitimate profit. We do not object to that, but we do object to people lining up in the queue as synthetic medi.cants and asking that they should continue to receive subsidies of this kind - and that is precisely what has occurred. A matter of a fortnight ago a conference was held in Melbourne of Australian petroleum exploration companies. They asked that the $1 per barrel production incentive, which under existing legislation will terminate in 1970, be carried forward well into the 1970s. The Esso-BHP group was amongst those pushing in this direction.

Apart from the successful producers there are those who are drilling and who are entitled to the usual subsidies for their drilling costs, and who are entitled also to their tax concessions, which are very substantial now and perhaps may be even more substantial as a result of the recent High Court decision. It is estimated that in the case of the companies mining iron ore this decision will cost $150m a year in extra company tax deductions. There is also substantial assistance given by the Bureau of Mineral Resources. Assistance is given in another direction; the Tariff Board made the comment as long ago as the time of its 1965 report that the rate of royalty payable on oil production in Australia is relatively low compared with the rate applying in other producing countries.

In addition to those companies which are now operating are those which have failed. Then there is a fourth category - companies which are meeting minimal requirements and acting literally as dummies. They have acquired huge tracts of the offshore shelf under exploration licences and are dummying in the main for overseas oil interests.

We are breaking new ground in Australia, lt has been notorious for many years that Australians have been paying for their own primary products prices far in excess of those obtaining on world markets, so that surpluses of commodities such as butter, sugar, meat and other primary products could be exported. The justification advanced by the Country Party has been that at least foreign exchange was being earned for Australia. But now the wheel has completely turned; Australians will now have to pay a subsidy in return for the privilege of using their own petrol and distillate, the product of Australian refineries and coming from Australian crude, and half of that subsidy is being sent overseas. It is an intolerable situation. It has been the subject of severe criticism in the Australian Press, and that criticism has been fully justified.

The whole policy of the Government has been to surrender as quickly as it can to private interests the birthright of the Australian people. We have at least 1,250,000 square miles of Australian continental shelf. We have the largest coastline of any country in the world and we have the largest continental shelf. Conceivably, from the proliferation of applications for exploration licences and the like, our continental shelf contains a very high proportion of oilproducing strata. It is also worth reminding the House of comment that was made by the present Minister for Social Services (Mr Wentworth) during the debate on the Petroleum (Submerged Lands) Bill last year. He referred to the depth of the oil-bearing sands in Bass Strait and he made a quite exact calculation that 1 square mile of oil producing area in the Bass Str ait or Gippsland offshore fields would yield products worth $300m. As the matter stands we have certain admissions from this group of companies. We have been told that they will have a gross income of some S3 15m from their admitted or anticipated production of 240 million barrels of crude oil per day.

Are the Australian consumers to continue to accept this imposition that has been placed on them? We in the Australian Labor Party believe that the Commonwealth Government, having undoubted rights under the international convention to which Australia became a signatory some years ago, should have continued to exercise sovereign control. Proper reward could have been given to the companies which have been responsible for the drilling and proving of the area, but the fact is that these companies have been given leases quite out of proportion to those granard for these purposes in other parts of the world. They have been granted not oil provinces but oil principalities. The Government has been profligate in its treatment of these companies.

Let me make a comment on oil production subsidies, in case some protagonist of the Esso-BHP group should come forward and say that group is entitled to the same as anyone else. When the Tariff Board made its inquiries the Moonie field had been proved and its special problems were being dealt with. But in the case of the Gippsland and Bass Strait offshore fields the EssoBHP group at that stage had entered into a drilling operation, and consequently the $1 per barrel subsidy was not in contemplation by that group. In other words, that organisation was prepared to accept the subsidy for drilling and the deductions for income tax purposes and to go ahead and take its chance. It was successful and it has been treated more than handsomely.

Oil refining is the only major industry which has been established in Australia since World War II which can operate without a protective subsidy. It is true that there are many complications - and unexpected complications - arising from the present situation. Australian crude is a high quality crude, lt is a light crude. It probably produces a higher proportion of petrol than most other crudes. The figures, as far as I have been able to ascertain them, show that about 56% by volume of the crude is petrol or motor spirit or similarly volatile hydrocarbons. Many of the Australian refineries have been designed to deal with overseas crudes and modifications are required. There is no doubt that the supporters of the Esso-BHP group will argue that they have special problems in negotiating with some refineries, but had the Government exercised its sovereign powers it could have brought these people together and, in many cases, knocked their heads together. The fact that the Esso-BHP group is getting this high subsidy together with the other less privileged producers means that the oil refineries in many cases are prepared to gouge out as much of that subsidy for themselves as they can.

There have been complaints in Australia of excessively high freight charges. One Australian producer in Western Australia claims that it is cheaper to send crude oil to Singapore for refining and bring the refined product back than to have it refined in Australia. In other cases there have been complaints that the refining charges of the Kwinana refinery in Western Australia were too high. There is certainly a case for depletion allowances to be made available, following the general pattern, in instances where the oil in the particular bearing sands becomes depleted. There is a certain formula which is generally accepted in other parts of the world. But even after allowing for all these matters there is an undoubted case for the reduction of the subsidy, and the sooner the matter is referred back to the Tariff Board for further inquiry the better. Justice must be done to the Australian motoring public. No country in the world needs motor transport more than Australia does. We are a huge country with long road mileages, and motor transport is necessary for both primary transport and as an auxiliary to rail transport. As I say, no country needs motor transport more than Australia, and no country has to pay a higher price for it. There is a duty on this Government to see that the real benefit of the production of Australian crude is passed on to the Australian public. Foi that reason the true value of crude at the wellhead offshore should be inquired into by the Tariff Board. The true cost of transporting it to the shore, which would be considerably less than marine transport from the Persian Gulf, should also be inquired into. The true impact on the finances of the particular company of the special concessions which are given by this Government should also be considered. Of course there is a case for production subsidies to be continued to certain companies whose findings have been minimal or who still need an incentive to produce and prove the oil bearing content of offshore areas in parts of Australia that are remote from available refining facilities.


– When the Petroleum (Submerged Lands) Bill was before this House last year, I remember, the Minister for National Development (Mr Fairbairn) said that the fixation of royalties took into consideration all the operating charges and taxation payable by the companies. He said that in those circumstances the royalties charged were justified. I have risen today in order to secure some information. I ask: If the Esso-BHP company that operates this particular concern in Bass Strait were a company that was owned by shareholders in West Germany or Japan and not the United States of America would the conditions be similar to the conditions that operate at present? This company is required to pay company taxation and it is also required to pay royalties, but considerable expenditure has been entered into by the Australian Government through the Bureau of Mineral Resources and through the provision of assistance to oil companies for exploration and other activities. Therefore the Australian Government has been of assistance to the Esso-BHP group. The Government would have been of assistance to a Japanese or West German company if it were operating in the same way as this company is operating in Bass Strait; but would the circumstances and the financial operation have been exactly the same?

A double taxation agreement operates with the USA but not with West Germany or Japan. The result of this double taxation agreement is that taxation upon dividends payable by shareholders in the United States is exactly half the rate of taxation upon dividends that would be payable by shareholders in West Germany or Japan to Australia. The flat rate of taxation upon dividends that are paid in New York is 15%, but it is 30% upon dividends paid in Berlin or Tokyo. Honourable members may point out that the United States Government has done nothing to improve the circumstances of Esso-BHP or the American shareholders in that company. That is perhaps correct, because presumably the American shareholders in EssoBHP would pay the full tax as citizens of the United States and that tax may be equivalent to the Australian rate of taxation. All that it would be doing would be to give a dividend to the United States Government. But these shareholders would have a remission of the amount that they had paid in taxation to the Australian Government. For example, if Sim profit is to be paid to shareholders in America then, say, $150,000 would be payable to the Australian Government and the difference between $150,000 and what under Ordinary circumstances would be paid to the United States Government by an American citizen would be payable in America. That may amount to $150,000 or it might amount to $400,000 or $500,000. I do not know what it would amount to.

The relevance to the legislation of what I have been saying is that determination of all conditions in regard to the operations of overseas companies should take into consideration the taxation that is payable to the Australian Government. If a company from West Germany, Japan or any other country comes to Australia and operates on our continental shelf, I see no reason why the shareholders of that company, if they live in countries other than those with which we have a double taxation agreement, should not pay twice the amount in taxation to the Australian Government that is paid by the Esso company. Because of that I say–


Order! I suggest to the honourable member for Scullin that he is getting very wide of the provisions of the Bill.


– I have the Bill before me, Mr Deputy Speaker, and I have seen the Schedules to the Act. They deal with the issue of licences and with the amounts of money payable.


– The Bill before the House is to amend the original legislation. This Bill is treated by the Government as a formal amendment. The Chair has been very tolerant but I suggest to the honourable member that he confine himself to the provisions of the Bill itself.


– With all due deference to you, Mr Deputy Speaker, I have read the particular sections of the original legislation which are to be amended by this Bill. Section 146 of the Act deals with the issue of licences and the schedules in connection with that section deal with the amounts of royalties to be paid. You will see that the last sub-section of section 146 includes the question of royalties payable overseas.


– Order! Secion 146 of the Act is not before the House. Clause 4 of the Bill relates to an amendment of section 146 of the Act by omitting the figures ‘43’ and inserting in their stead the figures ‘44’. The Bill is strictly a formal one and it does not justify a wide excursion into royalties. The Chair has been very tolerant and I suggest to the honourable member that he confine his remarks to the Bill.


– I express great appreciation of your guidance on this matter. I admit that I was led a bit astray by the previous speaker from this side of the House, the honourable member for Cunningham (Mr Connor). I thought that if I confined my remarks to a much smaller area then he traversed that 1 would be in order. Not being in order I still suggest to the Minister for National Development that he should see that, as a result of any amendments to the Act, the Australian Government receives in every form - in the form of taxation upon investors in Esso or in the Broken Hill Company - its proper share of the results of the drilling activities.

The only point I want to make is this: The Government of the United States of America has not assisted the Esso company in any way whatsoever to set up its operations in Bass Strait and to carry out its explorations. The Australian Government has done so. Why, then, should the biggest share of the cake, in the form of taxation upon dividends, go to the American Government and not to the Australian Government?

Question resolved in the affirmative.

Bill read a second time.

In Committee

The Bill.


Clause 4 of the Bill reads:

Section 146 of the Principal Act is amended by omitting from paragraph (a) of sub-section (2.) the figures ‘43’ and inserting in their stead the figures ‘44’.

I move:

The purpose of the Opposition in proposing this amendment is not vexatious. We realise that there is a major consortium operating in the Gippsland-Bass Strait area. We realise that it has major developmental projects under way and that it is operating under the terms of a production licence granted to it by the Victorian Government. Our purpose in seeking to restrict the operation of section 146 to a period of 12 months is that we believe there are facts now available to the Government which it did not have under contemplation at the time the original Petroleum (Submerged Lands) Bill was enacted, and certainly were not under contemplation by the Victorian Government. We believe in particular that, if the provision of a subsidy is to continue at the present rate of 75c per barrel of crude oil, this will represent an addition to the profits of the consortium to which it is not entitled. The subsidy was never under contemplation when this organisation commenced operations in the present area.

Accordingly, there is a strong case for the Tariff Board, in the terms of its own recommendation or suggestion in its report of 1965, for the matter to be re-opened. That report said that the matter should be referred back to the Board if it was found that Australia would be reasonably self sufficient in oil by 1970. An amendment in the form proposed would allow the Government sufficient time to refer this matter again to the Tariff Board. We believe that not only should the subsidy be reconsidered, particularly in relation to proved, successful oilfields - oilfields that are gigantic and of world magnitude - but that the Tariff Board should go further. We believe that the Board should conduct an investigation into the well head value of Australian crude. We believe that the price structure on which the Board based its recommendation to the Government did not take into account all factors relating to the cost of imported crude.

As I said in my earlier argument today, there is world over-production in crude oil. In many of the major oilfields less than 40% of their actual capacity is being used. We believe that the listed price which the Board accepted as the basis for the cost of crude, particularly Middle East crude which supplies 70% of Australian requirements, was high; that the Board should have taken into account the 50% or even 60% royalty payable to the Arab sheiks or rulers of that area. We believe that the Board should take into account the economies of scale in the operation of mammoth tankers now plying the oceans of the world in the transport of crude oil and petroleum products. We believe that the freight costs should be contrasted with the cost of the transmission of oil by undersea pipelines from the present drilling platforms in Bass Strait and on the Gippsland shelf. We believe also that the Government ought to re-examine the question of the royalties that should be charged.

As things stand, the Esso-BHP group is getting a bonus which it never contemplated. The crowning paradox of the whole situation is that the Australian motorist will have to pay a considerably increased price when we get to the point of 100% crude production for Australian requirements, lt is a grim alternative to the Australian motorist to have the choice of a foreign exchange drain with the import of crude oil from overseas or subsidisation of the production of Australian oil. When the Government decided on a policy of giving an incentive to these people, oil production on the present admitted basis by the Esso-BHP group was never contemplated, much less known. In view of the new situation, the Government has to face up to its responsibilities. Its responsibilities are of its own making because it has failed to introduce a national fuel policy. It has failed really to come to grips with the questions of price structure, production costs and the true profits of the major producer of crude oil in Australia today.

We recognise that there are areas in which there would need to be some differentiation regarding subsidies, but in certain other cases subsidies could be paid. I know that the Minister will immediately say that the subsidy is to be cut off in 1970 but, as the Minister well knows, pressure is already being applied. The Minister was not here at the earlier stage of the debate.

Mr Fairbairn:

– Which subsidy does the honourable member mean?


– I am speaking of the production subsidy, not the subsidy for the higher quality of Australian oil. That is something altogether different. But in the case of the production subsidy, the recently held conference of the Australian petroleum exploration companies decided to press the Government for the subsidy to be continued into the 1970s. We say that, in fact, it should not be continued as far as the end of 1970, in the case of the Esso-BHP group. If it is suggested that the 12 months limitation would seriously affect the group in its enterprise, I should like to refer to an article in the ‘Australian Financial Review’ of 14th November last. It was stated that from an analysis of the EssoBHP group figures for the year ended 31st May 1969, there would be only a small production. Obviously, at the end of that period the Government could enact new legislation, fixing a new rate of subsidy or eliminating the subsidy in the case of the particular company to which section 146 refers. There would be ample time in that period for the Tariff Board to carry out the further inquiry which it anticipated and which it suggested it should do when it was proved that Australia could be reasonably self-sufficient in oil production.

Minister for National Development · Farrer · LP

– Naturally, the Government does not accept the Opposition’s amendment.

Mr Peters:

– Why ‘naturally’?


– I shall tell the honourable member if he would like to wait. This is only a very minor Bill which is designed to make a couple of completely minor alterations to a Bill which was debated at great length and was carried by a large majority of this House just before we rose at the end of the last session. The Bill is designed to do two things: Firstly, it corrects a drafting mistake. Section 146 of the principal Act refers to section 43 of the Act instead of section 44. Probably we would not have worried about this amendment if it had not been for the fact that a Bill was to be introduced anyway.

Mr Connor:

– The Act would not be operative until the amendment was made. It would be nugatory completely.


– This was purely a drafting error at the time. The other amendment is necessary because of a different setup in the Ministry. The Minister for the Interior (Mr Nixon) is the Minister in charge of the Northern Territory. He now becomes the designated authority in tha

Northern Territory. The Minister for External Territories (Mr Barnes), who was formerly called the Minister for Territories, becomes the designated authority for Papua and New Guinea. These are two completely minor amendment* and I should have thought that the Opposition would have accepted them. But, of course, while these minor amendments are being made the Opposition has chosen to jump on the bandwagon and to try to re-open the whole discussion on the Bill.

I regret that because of an important engagement in my office 1 was not able to hear everything that was said by the honourable member for Cunningham (Mr Connor) who led for the Opposition in this debate. But I did hear enough to make me realise that all he was doing was canvassing the arguments which he put forward unsuccessfully about 4 months ago. But let me get down to the point. I think that I can clear the matter up for the honourable member for Cunningham.

The honourable member’s main point is that there have been gigantic discoveries of oil in Australia. 1 would not go quite so far as to say they are gigantic. There is no doubt that they are exciting and magnificent for the future of Australia. But recently I discussed this question of the discovery of oil with a principal of one of the companies involved in this work. I said: ‘Is this a major oil field by world standards?’ He said: There is no doubt that it is a reasonably good field but by comparison with some of the fields in the Middle East it is only a pimple.’ He referred to one field which had reserves probably twenty-nine times the reserves of the largest field now known in Gippsland.

Dr Patterson:

– It is still pretty good.


– It is still very significant, and we are particularly glad to have found the oil. Of course, if it had not been for the Government’s fuel policy the oil would not have been found. It has been our policy to carry out geophysical mapping in order to encourage people to come in and search for oil. We are giving exploration assistance by way of subsidies for drilling. There is also the subsidy which was referred to by the Opposition as a production subsidy. Tn actual fact, it is an encouragement for prospecting. The oil search companies know that if they discover oil, firstly, it must be taken in Australia because there is a penal tariff which prevents other oil coming in until the Australian oil is taken; and secondly, they know that they will get slightly better than the world price for the oil in order to enable them to put money back into further exploration.

Oil in the Middle East sells at an amazingly low price. If we want to be dependent on the Middle East for oil for the rest of our lives, all we have to do is to give no assistance for exploration and search in Australia. We will get cheap oil so long as we can continue to get it out from the Middle East. Literally, some of these enormous Middle East fields have been amortised, and all you have to do is turn on a tap and out comes the oil. You can get the oil here in mammoth tankers, and you can get it here cheaper than we can produce it locally. But I, for one, do not want to see us dependent forever on oil from the Middle East. Not so long ago, during the Suez crisis, we were considerably worried as to whether Australia would continue to have an availability of crude oil which is so necessary for our industries. I would not say that we were lying awake at night, but we were certainly concerned and every day we watched the figures for tankers on the sea to see whether there was sufficient oil available.

Now we have struck oil in Australia. The Opposition is now taking the view that it always adopts. When a thing is not profitable the Opposition says: ‘Do not worry about it at all. It is private enterprise, and it will look after itself.’ But the moment something becomes profitable, the Opposition says: ‘The horse has cleared out and it will be first past the post. For heavens sake, let us get some money on it before it wins.’ The Opposition cannot have it both ways.

We have succeeded in discovering a vast quantity of oil. We are glad to see that the company which has taken enormous risks is suceeding and will do very well financially out of it. But not only will the company do well, Australia will also do well. A considerable part of the profits will come to the Government in the first instance through taxation. The company has put the figure at 50% of the profits. but 1 think that is a little high. Australia will undoubtedly get a magnificent taxation return and our expenditure on the importation of crude oil will bc substantially reduced. My Department has estimated that by the end of 1970, when the known Gippsland fields will be in full production and with the Barrow and Moonie fields continuing to produce, even without any further discoveries we will be able to supply more than 60% of our oil requirements. This will mean a saving on our imports of $240m per annum. Surely such a result as this shows that it is worth encouraging companies to search for oil. One company has been lucky and has met with success.

But West Australian Petroleum Ltd spent 13 years and $50m from the time of its first oil strike until its second oil strike. Vast risks are taken. If the companies are lucky, the risks pay off; if they are nol, large sums of money are lost.

Let me get back to the point that the honourable member for Cunningham raised about the price. The Government is not asleep. It realises that it has encouraged the exploration for oil. When only a very small quantity of local crude oil was produced, the price was not affected very much. The price in Australia is one of the lowest in the world. I think it is the next lowest after America. The effect on the price is absolutely minimal when we are producing only 5% or 6% of our requirements and paying 75c a barrel more for local crude. In fact, the figure was probably more, say about 90c, because it was 75c above the posted price and discounts were applied to the posted price. Even with a large increase in production, as there will be by mid 1970, the price of petrol will still not increase substantially. It is a little like the price of a suit of wool. It seems to me that, whatever price is paid for the wool, no difference is made to the price ultimately paid for the suit. This would also apply to some extent to oil. We could certainly say that the difference in the price of oil would be of the order of lc or He, even when Australian production increases considerably.

The Government has been concerned about this problem for some time. It has already appointed a very well known international expert, Dr Frankel, and has brought him out here from the United Kingdom at Government expense. He has already seen a number of the companies and has had discussions with them. He has bad discussions with officers of the Fuel Branch of my Department and with the Secretary and other officers of the Department. Four Departments are interested in oil production. They are the Departments of National Development, Trade and Industry, Customs and Excise and Treasury. The problems are already being discussed. Obviously the Government must make a decision in the not too distant future as to what it will do, but it is quite unnecessary to amend the Bill that is now before us. The Government realises that action must be taken, but it believes that the explorer must be assisted. It is all very well to say that we are likely to produce 60% of our requirements, but this is only for 1 year. If no further discoveries are made, the percentage will go down. Our consumption of crude oil is increasing at the rate of 9% or 10% per annum. We need further discoveries of oil to keep pace with increasing consumption and we must keep spending vast sums of money.

We should congratulate Esso-BHP on the way it has undertaken the task of searching for oil. Broken Hill Pty Co. Ltd originally obtained the rights to an area but realised that it did not have the technical knowledge to carry out the search effectively. We cannot blame the company for taking that attitude. The search for oil is one of the most difficult exercises that can be undertaken. Drilling has been commenced at the Prawn field and the rig is 320 feet above the sea bed. This is an enormous distance. 1 believe that I am right in saying that this is the greatest depth at which drilling has been attempted in any part of the world. At the Halibut field, the pipes will have to go deeper than any pipes have yet been laid under water. All this calls for vast expenditure and the companies must have some guarantee of a reasonable price and a complete guarantee that the licences and leases will be fully supported both by the State and the Commonwealth. For these reasons the Government does not accept the amendment.

Question put:

That the clause proposed to be omitted (Mr Connor’s amendment) stand part of the Bill.

The Committee divided. (The Deputy Chairman - Mr E. N. Drury)

AYES: 70

NOES: 39

Majority . . . . 31



Question so resolved in the affirmative.

Amendment negatived.

Bill agreed to.

Bill reported without amendment; report adopted.

Third Reading

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

page 508


Second Reading

Debate resumed from 13th March (vide page 42), on motion by Mr Freeth:

That the Bill be now read a second time.


- Mr Deputy Speaker, the Bill that we are now discussing is in terms similar to those of one which was before the House last year and which remained on the business paper until the Parliament was prorogued. This is a measure of great interest to the people residing in the valleys of certain coastal rivers of New South Wales and to the community generally, for the prosperity of the people of the Northern Rivers district of New South Wales is vital to the prosperity and wellbeing of the people of Australia. This is important legislation because it exhibits the achievement of unity of action by the partners in government in Australia in the local, State and national spheres. Indeed, the example given to us here might well be followed in other fields of governmental activity. Frequently the Parliament and the people are faced with problems that involve the local, State and national arms of government. We have before us now a glorious example of the way in which this National Parliament, with the Parliament of New South Wales and the local councils, which directly express the views of the local citizens, can work together to attain a laudable objective.

The purpose of this Bill is to amend the New South Wales Grant (Flood Mitigation) Act 1964 so as to increase the Federal Government’s financial assistance under the terms of that Act from $5.5m to $8m. This assistance is to be paid in the form of nonrepayable grants over the 6-year period ending in June 1969. Subject to the provisions of this legislation, flood mitigation works are undertaken on six coastal rivers in New South Wales. The financial assistance provided by the Commonwealth will match dollar for dollar the State Government’s contribution. The State Government contributes S3 for every $1 spent by the local authority on works on the Hunter River and S2 for every SI spent by the respective county councils on the Tweed, Richmond, Clarence, Macleay and Shoalhaven rivers. The Treasurer (Mr McMahon) has stated that flood mitigation is costing more than had originally been estimated when this scheme began in 1964. The increase in cost is acknowledged by the Opposition, as it is acknowledged by the whole community, which witnesses in all directions the effects of the cost spiral.

The work being undertaken will not prevent floods from occurring but is designed to mitigate the intensity of and the damage wrought by recurring floods. The Opposition does not oppose this measure, but it would be much happier if a national conservation authority could be established by the Commonwealth for the purpose of conserving water and diverting it to the dry and arid parts of Australia. Indeed, it is incongruous that as the Parliament considers this measure parts of southern Australia are experiencing one of the worst droughts ever known. To our dismay, we have learned from the Minister for National Development (Mr Fairbairn) of the dismissal from the Snowy Mountains Hydro-electric Authority of valuable key personnel. The flood mitigation works envisaged under the terms of this measure will be designed to keep flooded rivers within their banks as far as possible and, where water spills over the river plains, to drain the flood waters as speedily as possible into the Pacific Ocean. So the policy is to drain flood waters as rapidly as possible into the Pacific Ocean while vast tracts of Australia remain dry. I hope that in future we will find means of diverting these waters over the ranges to areas where they can be of value. This is the Australian paradox; it is a paradox of flood and drought, of great bounty and of shortages, of water inundating vast areas of rich and valuable countryside while elsewhere drought and ruin exist.

A major contributing factor to the flooding of river plains is undoubtedly the erosion of top soils which are carried by streams into river beds that are unable to cope with a huge volume of water. In discussing this legislation J pay a tribute to the soil conservation service of New South Wales. I acknowledge the outstanding contribution it has made in this field. Its officers have rendered valuable work and they need encouragement. A 2-year survey of the eastern and central divisions of New South Wales, completed in 1943. classified 1.865 square miles of land as beyond reclamation. This is a shocking indictment of our occupancy of this country. It confirms that there is a link between flood mitigation and conservation - the conservation of water, soils and forests.

In discussing flood mitigation it is necessary, too, to acknowledge the work of those who were responsible for bringing this question so strongly to the attention of the Commonwealth Government and of the New South Wales Government. I have in my possession a document entitled ‘The Case for Flood Mitigation on the Coastal Rivers of NSW. It relates to the Tweed, Richmond, Clarence, Macleay and Shoalhaven Rivers. lt was prepared in 1963 by the local councils in the area and was submitted to the State Government. The document formed the basis of a debate on the urgency of doing something to overcome the tragedy of lands that were being submerged as often as three times in one year. According to the document, 5,621,852 acres were affected. That area had an annual production averaging £9,169,000 and it was claimed thai the proposals for flood mitigation would involve an expenditure of £5,397,000, which would increase the average annual production to £18.242,250. It was an extremely good case, presented by people deeply interested in their district and in the development of the coastal river areas of New South Wales. They represented the Macleay River County Council, Clarence River County Council, Richmond River County Council. Tweed Shire Council and Shoalhaven Shire Council and they acknowledged the work of the Hunter River County Council, which also had worked effectively in seeking flood mitigation assistance. I do not ask that this document be incorporated in Hansard, because it is too voluminous, but I commend it to honourable members.

In my possession I also have a copy of the Grafton ‘Daily Examiner’ of 15th May 1963. On the front page are pictures taken the previous day of the flooded Clarence River plain. The paper reports the visit of an all-party parliamentary group from Canberra which flew over the area and then touched down at Grafton to discuss the problems of flood mitigation with a dynamic group of people who had a message to tell the delegation. I was one of the party which called on that area and it was my privilege to learn at first hand of the desolation and losses caused by floods of such magnitude. There was shocking evidence of the damage caused by flooding of rich and valuable country. Our visit to the area was due to the untiring work of Mr F. W. McGuren, who was at that time the member for Cowper. He worked unceasingly, and I pay a tribute to him for his incessant and untiring work and for his great faith that something would be done about flood mitigation. Following that visit in 1963. and as a result of the document prepared by the county councils, the legislation which we now seek to amend was introduced.

Flood mitigation work is proving successful in draining river flats of floodwaters quickly and enabling people to return to their homes and farms. During the recent parliamentary recess I visited the Clarence River and Macleay River areas. Both county councils are working hard to overcome the effects of floods. I congratulate the county officers, engineers and staff for what they are doing. The approach in each area is somewhat different. The Clarence County Council seems preoccupied with digging channels and undertaking drainage work to get the floodwaters out to sea as quickly as possible so that the water will not become stagnant and waterlog vast areas; in the Macleay River area greater emphasis is being paid to building up the river banks, constructing levees, strengthening the walls of river banks and clearing debris to enable the river to carry a greater volume of water. As a result of the work that has been done the Macleay River is carrying a much greater volume of water today. The river bed itself is deeper. I visited the area shortly after a flood and I was pleased to note that dairymen and others were returning with their stock to their properties. The countryside had not suffered grievously.

According to Mr Davis Hughes, the New South Wales Minister for Public Works, flood mitigation work on the Clarence River is 73% completed; on the Macleay River, 50% completed; on the Richmond River, 60% completed; on the Tweed River, 58% completed; on the Shoalhaven River, 62% completed; and on the Hunter River 37% completed. This indicates that the money voted by this Parliament for flood mitigation works has been well spent. Some areas concentrate on drainage works and constructing canals whereas other areas concentrate on river bank protection work and levee stabilisation work.

In discussing this work 1 want to refer to a problem that is constantly with us. When rivers are cleaned out the flow of water is accelerated. Many of the rich alluvial flats on the upper reaches of a river are subjected to surges and pressures which destroy the river system and the alluvial river flats. The beautiful rich soil is taken away in the floods that repeatedly come down the rivers. So the class of work to which I refer will need to be continued. As far as 1 am concerned there is no ending to this work.

Whilst this Parliament, the Parliament of New South Wales and the county Councils have carried out the work over a period of years, I can envisage a continuing service required to attend to the need for the preservation of these rich alluvial river flats. This is something that must go on all the time. I can only hope that we will go from flood mitigation to flood prevention and conservation as well as to changing the courses of streams in order to use water in a similar way to that in which it is being used in the vast Snowy Mountains project. I hope that the people who have worked on the Snowy scheme will be given a charter to go forward to work on the northern rivers of New South Wales. Those people can make a contribution assuring not only a supply of water in drought time, in good and bad seasons, but also regulation of flow in times of flood, conservation of water and its use in the dry periods. The waters of these rivers can also be diverted over the mountains to increase the already great productivity of this nation.

Concern has been expressed by farmers and settlers on the upper flats of the Macleay River, as I have said, and the work must be given very high priority. The work should not be delayed. I wish to go on record in expressing my personal appreciation to those who have made their contribution to the practical methods of dealing with flood situations on the rivers of the eastern coast of New South Wales. It may be thought by some that those people do not make a contribution. It is known that the county councils do make their contribution. But the money that is required must come in the first instance out of the pockets of the people who live in these county areas. They find the money. They make it available by payment of rates to their local councils which, in turn, pass it over to the county councils which engage in this valuable work. This work is an example of valuable self help.

As I commented at the outset, it is good to know that this work is receiving support from the State and from the nation. May this form of teamwork in government - local, State and national - be continued so that the people will be able to advance themselves knowing that they have, in addition to their own efforts, the support of the councils, the State and the nation. Now that the present work of the county councils is well advanced, we need to press forward with a comprehensive water programme. The magnitude of the work that will be required in the future is much beyond the purse of the people in that area. They cannot be expected to finance the grand and major schemes that will be required in the future.

It is true that floods will continue. The north coast of New South Wales over the years has been blessed with bounteous rains. It is a rich and wonderful area. What has been accomplished there is truly to the credit of all concerned. Water is a basic requirement in the development of the resources of this nation. Waters being discharged into the Pacific Ocean are vitally necessary for the effective occupation of this land. I believe that no better purpose exists for the investigation, survey and design sections of the Snowy Mountains Hydro-electric Authority than to involvement and assistance with the major tasks that lie ahead. This should form a part of the objectives of a national conservation authority. We have the evidence that local, State and Commonwealth bodies can work together. We hear of dismissals taking place at the Snowy Mountains project. I can only hope that the Commonwealth Government, realising what is before it at the present time, will use these valuable men for the great work that lies ahead in the conservation of water, and make that water available to those who need it most, sparing the people of the coastal strip of New South Wales from the disasters of floodings and the desolation and loss that follow them.

Debate (on motion by Mr Robinson) adjourned.

Sitting suspended from 5.56 to 8 p.m.

page 511


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

Second Reading

Treasurer · Lowe · LP

– I move:

That the Bill be now read a second time.

By this Bill the Parliament is asked to approve - and give the force of law to - a new double taxation agreement between Australia and the United Kingdom. Some changes in the income tax law are also proposed by the Bill. These flow from the new agreement and I shall refer to them again briefly later on.

The new agreement - which followed some months of negotiation - was signed in Canberra on behalf of each Government on 7th December 1967. Shortly after that, 1 arranged for a copy of the agreement, together with some explanatory notes on it, to be sent to each member of the Parliament so as to provide members with an opportunity to study its terms before it came up for debate in the Parliament. I mention also that, the agreement has been a public document since last December and, while I have received one or two inquiries about some aspects of it, the evidence is that it has found general acceptance with people likely to be affected by it.

The Parliament of the United Kingdom has already debated and approved the new agreement. It will not, however, come into force either in the United Kingdom or here until we also approve it and give it the force of law. There is, of course, an earlier double taxation agreement of long standing with the United Kingdom. It was concluded in 1946. The new agreement, if it is approved, will replace the 1946 agreement and I think J should say at this point that it is the opinion of the Government that the new agreement is, from Australia’s standpoint, far better balanced than the one it is designed to replace.

Before I go on to talk about the provisions of the new agreement and how they differ from those contained in the 1946 agreement, perhaps I should say a few words about the general aims and purposes of double taxation agreements. I think this would be appropriate because arrangements of this kind have not come before the Parliament for discussion very often. The last occasion was in 1960 when our agreement with New Zealand was approved. Bilateral taxation agreements have two principal functions. One is the formal prevention of double taxation on income flowing between the two contracting countries; the other concerns the apportionment between the two governments of the taxation collected on this income. The first of these functions is clearly of importance to businessmen and others who reside in one country and receive income from investments or activities in the other. It is obviously in the interests of harmony in the commercial relations between two countries that businessmen and investors residing in one of the countries should know with a strong degree of certainty what the taxation consequences of transactions with, or investment in, the other country will be, and that the income will not be taxed by both countries without any double tax relief.

The second matter is the one that causes most difficulty in negotiations, particularly where there is an imbalance in the flow of income between the two countries. One viewpoint is that any country should be able to look to its own residents to contribute at normal rates towards the cost of the government of the country and the benefits it provides for its residents. It is also said that the country which is the source of capital invested in the other country - presumably to the benefit of that other country - is entitled to a reasonable share of the taxation of the income yielded by investment. From the contrary point of view, the country in which the income originates can argue that, in providing the conditions necessary for producing the income, it acquires the main right to the taxation revenue on that income.

All methods of relieving double taxation between two countries involve each country in giving up some or all of the tax it might otherwise collect. One method may require either the country of residence or the country of source to exempt particular classes of income from its tax. Other methods require the country of source to limit its tax on particular classes of income, or the country of residence to give credit for the tax imposed by the country of source. Each of these bases of relief is to be employed, in one context or another, in relation to the new agreement with the United Kingdom.

In the Government’s opinion, the new agreement represents a mutually satisfactory compromise as to each country’s taxing rights and will serve very well to facilitate and encourage the flow of investment and trade between the two countries. It is to be borne in mind that the agreement was negotiated against the background of fundamental changes in the British tax law designed to make overseas investment less attractive than it had previously been. The new agreement differs from the 1946 agreement in a number of important respects. I think it may be convenient if T refer to the main differences under appropriate headings.

First of all, I refer to dividends. Under the 1946 agreement, dividends paid by an Australian company to a United Kingdom company that wholly owns the Australian company are, in general, completely exempt from Australian tax. Other dividends paid to residents of the United Kingdom are subject to 15% Australian withholding tax, that is, half the general withholding tax rate of 30%. Under the new agreement the exemption for United Kingdom parent companies disappears as from 15th December 1967 and all dividends flowing from Australia to the United Kingdom will - unless, in broad terms, they are part of the receipts of a business carried on here - be subject to the 15% rate. Conversely, dividends flowing from the United Kingdom to Australia will, with the exception I have mentioned, be subject to 15% United Kingdom tax. The normal United Kingdom rate is currently 41.25%.

I mention that profits of Australian public companies distributed as dividends to United Kingdom residents will initially have borne Australian tax at the company rate of 42.5%, so that when the dividends also bear withholding tax of 15%, the total Australian tax on each $100 of profit derived in Australia is S5I.12. I suggest this represents a reasonable contribution to Australian revenue and that the arrangements 1 have outlined secure a fair share of the tax revenue to Australia without discouraging investment here of United Kingdom capital. Where dividends are part of the proceeds of a business carried on in one country by a resident of the other, the country where the business is carried on will be able to exact its full rate of tax on the dividends by ordinary assessment processes. A corresponding provision will apply to royalties and interest in respect of which, as I shall now explain, the country of origin will otherwise be required to limit its tax.

Under the 1946 agreement, the country of residence of the recipient has the sole taxing rights as to most royalties. The country in which they originate is obliged to exempt them from its tax. The new agreement provides that the country where royalties originate may tax them, but generally ils tax is not to exceed 10%. This means that Australia will regain important taxing rights that it had forfeited under the 1946 agreement. I should mention at this stage that another Bill which will be introduced later on is designed to ensure that the taxing rights regained will prove fully effective.

Turning now to interest, under the new agreement each country is generally to limit to 10% its tax on interest flowing to the other. The normal rate of Australian withholding tax is, of course, 10%. The British rate, on the other hand, is currently 41.25%.

Now, Sir, I wish to say something about shipping and airline profits. Under the 1946 agreement - as indeed under our other three agreements with the United States, Canada and New Zealand - the basic principle is that the country of residence of a shipowner, or of an airline company, has the sole right to tax shipping and airline profits. The new agreement with the United Kingdom continues this as regards profits derived in the course of international traffic but concedes taxing rights to the other country as regards profits from voyages or flights solely between places in that country.

The new agreement follows the customary arrangement that the business profits of an enterprise of one country may be taxed in the other if, broadly speaking, they are derived there through what amounts to a branch or, as it is called in the language of double taxation agreements, a ‘permanent establishment’. The definition of permanent establishment for this purpose is a comprehensive one quite satisfactory to Australia.

What I have said so far covers the main income categories to which the agreement extends. There are other provisions, customary in international tax agreements, regarding visiting businessmen, entertainers, teachers and students. As to a visiting businessman who is an employee or director, the general rule is that his salar)’ is not to be taxed in the country visited unless his visit exceeds 183 days in a year of income. This rule does not apply to entertainers. These may be taxed by the country visited on income derived from their activities there, no matter how long the visit, and whether they are self-employed persons or employees of someone else.

Government remuneration will, in general, remain taxable by the paying Government. On the other hand, pensions, either governmental or private will be exempt from tax in the country of source whether or not they are taxable in the country where the pensioner resides.

An important point I should mention is that there are comprehensive credit arrangements which ensure that, where both countries tax the same income, the country in which the taxpayer resides will give credit for the tax of the country of source. The general effect is that the total tax payable cannot exceed the higher of the taxes imposed by each country. A further point of some substance is that, except where otherwise specified in the agreement, the country of source of income will retain its full rights to tax the income on whatever basis it considers appropriate from time to time.

In Australia the new agreement will apply as from 1st July 1967 and the 1946 agreement will be terminated at that time. There are, however, special provisions for the 1967-68 income year to facilitate smooth transition from the 1946 agreement to the new agreement.

As well as giving force to the agreement, the Bill makes some amendments to the existing income tax law. I foreshadowed these in a statement I made on 15th December 1967. Except as to dividends Australia’s general way of relieving its residents from double taxation on income derived abroad, and taxed there, is to grant an exemption from Australian tax. Dividends taxed abroad we tax again here but. we allow a credit for the foreign tax, up to the amount of the Australian tax. The Bill proposes that this credit system be extended to interest and royalties in respect of which the United Kingdom tax is limited to 10%. I have already explained in my statement of 15th December 1967 that it would be anomalous to allow these classes of income to go free of Australian tax merely because they have borne a rate of tax no higher than 10% in the United Kingdom. To do so would be to give up revenue the United Kingdom has conceded us.

The credit system will be applied to interest, royalties and dividends from the United Kingdom by including the gross amount of this income in Australian assessable income, ascertaining the Australian tax payable on the income, comparing that with the United Kingdom tax paid, and allowing a credit for the United Kingdom tax to the extent that it does not exceed the Australian tax. Formulae are provided by the Bill for ascertaining the Australian tax. There will be no credit for United Kingdom tax on dividends derived by Australian companies. Because of a rebate allowed in Australia, such dividends are effectively free of Australian tax.

Detailed explanations of technical aspects of the agreement and the Bill are contained in a comprehensive explanatory memorandum being made available to honourable members and I do not propose to speak at greater length about them at this stage. I commend the Bill to the House.

Debate (on motion by Mr Crean) adjourned.

page 513


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

Second Reading

Minister for Air and Minister Assisting the Treasurer · Forrest · LP

18.16] - move:

That the Bill be now read a second time.

The main purpose of this Bill is to correct some shortcomings in the income tax law relating to the taxation of royalties derived from Australia by persons resident in other countries. In brief, it is proposed by the Bill to insert a definition of ‘royalty’ in the income tax law and to specify the circumstances in which a royalty derived by a non-resident is to be treated as having a source in Australia.

Honourable members will recall that the general principle of the income tax law is that a non-resident is subject to Australian tax in respect of income that has its source in Australia. The law contains provisions under which an amount derived as or by way of royalty by a non-resident is, subject to any exempting provisions, liable to Australian tax if the payment has an Australian source. There is, however, no clear definition of royalty in the income tax law. This means that many items of income that are in the general nature of royalties - for example, payments for industrial know-how or for the right to show films - have, in effect, to be treated as income other than royalties. The provisions I have mentioned do not then apply and difficulties can also arise in respect of some of our double taxation agreements. Under these agreements Australia retains the right to tax royalties but the term is not, except in the new agreement with the United Kingdom, defined for the purposes of the agreement. The result is that the term must take whatever meaning it has for the purposes of the Australian income tax law. But, as I have said, there is no clear definition in the Australian income tax law, and the lack of such a definition tends to place narrow constraints on the operation of the agreements as regards this type of income.

Probably a more important reason for our inability to tax much of this income flowing overseas is that, although it has a very definite connection with Australia in that it is paid out of profits earned here and for rights used here, it does not have a source in Australia as the term ‘source’ is interpreted under our existing income tax law. An Australian source for the income can be avoided by executing the relevant contracts abroad and by providing for payment to be made abroad. There is an increasing tendency for arrangements of this kind to be made.

The Government has concluded that steps are necessary to secure an appropriate contribution to the Australian revenue on income of this kind that now escapes Australian tax. Accordingly, it is proposed by this Bill, as a first step, to enact a definition of ‘royalty’ for the general purposes of the taxation law. The term will include payments - received in the form of income - for the right to use items of industrial property, such as patents and copyrights, and for the supply of knowhow. It will also include payments received in an income form for the use or letting of machinery or other equipment and for the right to show films. The definition is identical with a definition included in our new double taxation agreement with the United Kingdom, and is in line with modern international usage. For example, a substantially similar definition has been included in the model double taxation agreement devised by the Organisation for Economic Co-operation and Development.

The other major step proposed is the provision of a statutory source in Australia for royalties. In legislation passed by the Parliament last year a withholding tax was imposed on interest paid to non-residents. The legislation specified the circumstances, in which, in effect, interest was to be treated as arising in Australia. It is now proposed to follow the same broad rules for ascribing an Australian source to royalties derived by non-residents. A royalty payable by an Australian resident will be treated as having a source in Australia except to the extent that it is attributable to a business carried on by the payer outside Australia. Likewise an Australian source will be attributed to a royalty payable by one non-resident to another to the extent that it is an expense of a business carried out in Australia by the payer. I mention that these proposed source rules are ones that receive wide international recognition.

Amounts to which the proposed new provisions apply will be subject to tax in Australia by assessment processes. This means that deductions will be allowed to the non-resident, in accordance with ordinary principles, for expenses incurred in deriving the royalties, and the net amount of the royalties will be taxed at appropriate general rates of tax. As the Treasurer (Mr McMahon) indicated when introducing the legislation on the United Kingdom agreement, the Australian tax on royalties flowing to the United Kingdom will be limited to 10% of the gross royalties. Although the royalties are to be taxed by assessment and not by way of a withholding tax there are provisions in the law by which the payer of royalties is obliged to deduct from royalties amounts sufficient to cover the tax that will ultimately be assessed. These provisions, which the Bill proposes to strengthen in minor respects, will continue to apply.

The new provisions are to apply to royalties paid on or after 1st July next. Royalties that are exempt from Australian tax under specific provisions of double taxation agreements will continue to be exempt. In this category are copyright royalties derived by residents of the United States, Canada and New Zealand. Other provisions of the Bill are of a purely technical nature associated with the new double taxation agreement with the United Kingdom. I will not refer to them now as they are explained in the explanatory memorandum on the Bill, which also gives more detailed information about the proposed royalty amendments. I commend the Bill to the House.

Mr Crean:

– Before I seek an adjournment on this matter I would like to ask the Minister and perhaps the Treasurer whether debate on these Bills will be deferred until after Easter? They are very complicated measures. I hope that the Government does not expect to debate them next week.


– I cannot answer the honourable member but I will take note of his request.

Mr Crean:

– I would like to have some sort of assurance on this.


– I cannot answer the honourable member, Mr Speaker, but I .will take note of his question.

Debate (on motion by Mr Crean) adjourned.

page 515


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

Second Reading

Mr Malcolm Fraser:

– I move:

That the Bill be now read a second time. This Bill seeks authority for the Government to continue, during the next 3 financial years, grants for the construction and equipping of science laboratories. The scheme was introduced in 1964-65 and has been continued in subsequent financial years up to 30th June 1968. These grants for the construction and equipping of science laboratories represent one part of what can be regarded as an overall Government programme to up-grade scientific skills in Australia.

The Government recognises that if Australia is to develop as we wish and if we are to make the greatest use of our own resources we need a greater number of welltrained scientists and technologists. If we are to maintain and improve our position in the modern scientific age it is clear that the Government must give attention to the standards of training. The Government has therefore attempted, in co-operation with the States, to upgrade the level of scientific training in the schools and universities and in post-graduate research. Scientific training in the universities has greatly benefited from increasing Commonwealth support for universities.

The universities use a proportion of the recurrent funds generally available to them for research but, wishing to give particular attention to the needs for research, the Commonwealth has been making increasing funds available specifically for this purpose. It is indebted to the work of the Australian Research Grants Committee which recommend the allocation of these funds, which have been increased from $4m in the first triennium of the Committee’s operation to $9m in the second and current triennium. While not limited to universities, the greater part of these funds go to research in universities.

It was clear that students entering universities would not be able to make the maximum use of the increased facilities being provided unless adequate facilities were available for their training at school. Such facilities are expensive and in many cases have been beyond the resources of the authorities previously responsible for providing them. Four years ago the Commonwealth therefore began its support for the construction and equipping of science laboratories.

Under existing legislation, grants for science facilities totalling $42,291,200 will have been provided between 1st July 1964 and 30th June 1968. A total of $28,951,200 will have been provided to Government schools, and payments totalling $27,114,000 have already been made. These grants have been used to build laboratories at 383 Government high schools throughout Australia as selected by the States. Details of these are given in the lists that I have circulated. In addition every State Government school in Australia which teaches secondary science has received some additional science teaching apparatus as a result of the Commonwealth grants.

The balance of $13,340,000 will have been provided over the 4 year period to independent schools in the States. The lists which I have circulated give details of the independent schools which have been assisted under the scheme and the amount granted to each school in each year of the scheme. Of the 750 applicant independent secondary schools, 508 have received some assistance under the scheme.

The bill proposes that a further amount of $37,721,400 be available over the next 3 years. Of this amount, $21,713,400 is for assistance for science facilities in government schools and $ 16.008m for independent schools. The amount for independent schools will continue to be, as it was in 1967-68, at double the rate it was in the earlier years of the scheme. The money once again will be allocated in specific amounts to groups of schools, but the opportunity has been taken to revise the allocation on the basis of more up-to-date population and secondary enrolment figures. On the basis of the population figures obtained from the 1966 census and statistics for secondary enrolments in 1966, the latest’ available, the annual distribution will be as shown in the following table, which, with the concurrence of honourable members, I incorporate in Hansard:

In relation to independent schools it has been decided that part of the total amount available will be used, in the first place, to meet the balance of the reasonable cost of science buildings already assisted and then to make grants to schools which have built science laboratories to plans approved by the Minister on the advice of the Standards Committee but for which they have not received any assistance. The other part will be available for allocation on the recommendations of State Advisory Committees for completely new projects at independent secondary schools.

As a result of the grants now proposed, by 1971 substantial inroads will be made into the backlog of needs for science facilities in both Government and independent schools. On present information, it appears that a further triennium with reduced funds would be sufficient to complete the exercise with respect to existing schools. 1 am pleased to report that the Commonwealth and States have co-operated fully in improving the science facilities available to students attending government schools and that the scheme has been most successful in providing such facilities. I should like to pay tribute to the members of the Standards Committee who, notwithstanding their other duties as senior members of the staffs of independent schools and universities, have visited every applicant independent school to assess its needs for science facilities. They have made themselves available too, for numerous discussions with school principals, school boards and their architects so that the plans developed to meet needs will be of the highest standard. Honourable members will appreciate the amount of travelling involved in this achievement.

I wish to thank the committees convened, at my predecessor’s request, by the senior Roman Catholic and senior Anglican Prelate in each State to recommend priorities for Roman Catholic schools and schools other than Roman Catholic respectively. The work of these committees has been most valuable in ensuring that local knowledge is brought to bear in the determination of priorities amongst needs. I will be providing these committees this week with information about the current needs of applicant schools so that their recommendations for the proposed extension of the scheme may be available as soon as possible. I commend the Bill to the House.

Debate (on motion by Mr Crean) adjourned.

page 517


Second Reading

Debate resumed (vide page 510).


– This Bill is for the purpose of raising to $8m the amount of Commonwealth assistance to New South Wales for flood mitigation works on the Clarence, Richmond, Macleay, Tweed, Shoalhaven and Hunter Rivers. As I am sure honourable members know, flood mitigation is a work of national importance and is of great significance to the areas I have mentioned. The works programme to which this Bill refers commenced in 1963. The funds required originally were estimated to total in excess of $llm. It was found, however, that cost rises took this figure for the completion of the works to a total of about one-third more than the amount I have mentioned. I think this fact warrants some brief explanation.

Th; original surveys carried out by the New South Wales Government were some years old when the programme of works was agreed upon in 1963. In the light of construction work carried out it was found that these estimates were outdated. I want to make it clear that this was not the fault of the New South Wales Government authorities or of the local government authorities in whose areas the works programme is being carried out. 1 will now quote the figures involved in this programme. The cost of the works on the Clarence River will now be $4.452m, an increase of $1.2 14m. On the Richmond River the cost will be $3.26m, an increase of $1.49m. On the Macleay River the anticipated cost is now $6. 18m, an increase of $2.34m. On the Tweed River the estimated cost is now $ 1.271m, an increase of $334,000. On the Shoalhaven River the works are to cost $1.298m, an increase of 5673,000. On the Hunter River the cost is now estimated at $7.683m, an increase of $283,000.

The works in those areas are carried out as part of a joint scheme. Finance for them is flowing at the. rate of $4 from the Commonwealth, $4 from the State Government and $2 from local government authorities. That is the ratio of contributions to all works on these rivers except the Hunter River where the proportions are as follows: $6 from the Commonwealth, $6 from the State Government and $2 from the local government authorities. The work is mainly within the tidal limits of the rivers and there have been results of tremendous significance in the engineering field so far as flood mitigation is concerned. Individual schemes on each of the rivers have been developed as a result of local engineering design and research; work that has been carried out on the spot by men engaged at local level to deal with what have been regarded for very many years as very complex engineering works. These people are aided of course by engineers of the New South Wales Department of Public Works. I want’ to pay a tribute to what has been accomplished by the engineers at local government and at State Government level.

The Commonwealth does not play a part in the administration of these projects, it was made clear in 1964, at the time of the original Bill granting financial assistance, that the Commonwealth would make funds available to the State on condition that the State would be the authority responsible for supervision and control of the construction works. It is proper that this basis should be maintained. 1 feel it is equally proper that honourable members should be given some information as to the details of the works and their benefits. In order to do this I want briefly to give some figures which I believe spell out the magnitude of the work being undertaken. The total area involved in the local government districts to which I referred is no less than 5,600,600 acres - a tremendous area of land. Within that total area there is an area of 3,750,000 acres which is, or which was, directly affected by floods. This area is receiving the benefit of the mitigation works being carried out. There are about 6,700 farm holdings in this area and of that number about 3,600 were badly affected by flood.

Of course, the cities and towns in these areas have a very direct interest in what is being done. There has been flooding of homes, shops and property of all descriptions in cities and towns such as Grafton, Lismore, Kempsey, Murwillumbah, Maitland and many others. Those places will benefit directly from this vital and important work. The area has a population of about 125,000 people. Of that number some 15,000 constitute the farming sector which is a very substantial population interest when we think of the total cost of the project and the contribution by the Government, and relate it to some of the major public works undertakings in Australia. I make this point because it is obvious from early calculations that the cost benefit ratio for the expenditure from Government funds is very high indeed. The benefits to productivity in the field of rural industries and the benefits to the community as a whole run into a calculation that gives a return for the investment which I am sure will be found to equal, if not exceed, the returns that can be assessed from the construction of major dams, such as those in the Snowy Mountains scheme, the Ord scheme and the Nogoa scheme in Queensland. We can include for the purpose of comparison any of the great schemes in Australia which have been the subject of wide debate, extensive consideration by governments and, in particular, consideration by this Parliament.

The industries concerned in the fields of dairying, grazing and crop production, including sugar cane and maize growing, are a very substantial factor in the economy of northern New South Wales. This programme of flood mitigation will greatly aid the development of these industries on a basis that will overcome a problem that has impeded their standard for the last 100 years. 1 speak on this matter as one who is a third generation farmer on the flood plains of the Richmond. In my own experience I can recall the ravages of flood and the losses that have been sustained. It is very interesting to note that in the present year the winner of the New South Wales dairy farm competition was none other than a farmer named John Ensley who farms on the Clarence River in the very heart of the flood devastated districts. His success illustrates very clearly the beneficial results of flood mitigation work because emphasis was placed on the utilisation of farm lands that had been drained as a result of flood mitigation work. There was the creation of a planned programme of pasture production to sustain his herd and to put it into the field of reliable production of a standard that would accord with the best practices of dairying in New South Wales.

This has all happened in the space of 3 years. In 1964 when the original Bill was debated it will be recalled that a 6 year programme was agreed upon for the carrying out of flood mitigation works on the rivers to which I have referred. The approach to construction by the local government authorities has been so successful that the construction time was cut down by about one-third. In fact, in some areas work which was expected to take 6 years has been completed in 3 years. This is a tribute to the leadership in the field of local government given by such men as Counsellor G. McCartney of the Clarence River, Counsellor C. N. Yabsley of the Richmond River and Counsellor D. O’Dell of the Macleay River who has been succeeded more recently by Counsellor C. Cavanagh. These four men have been real leaders in the cause of bringing to reality proposals for flood mitigation which had been talked about, thought about and worked upon for many years - perhaps it would be no exaggeration to say 25 years.

All of this has been an approach to a vital field of development that is worthy, not only of the interests of this Parliament, but also of those who are concerned with national development and who see the need to assess, as I said earlier, the value of looking at things on a cost benefit basis. I believe that wherever funds can be spent in a manner that will produce useful results - useful, not only in terms of a purely academic approach but from the point of view of a positive calculation - those are the areas into which national, State and local government funds should be directed.

I spoke earlier of my own experiences in this problem of floods. One can recall the sorry plight of farmers seeing their stock drowned in floods. I have had that experience myself. I have seen a crop which one had planted inundated with water and stay under water until it rotted or was beyond value from the point of view of any chance to harvest even a portion of it. I have seen damage to farm improvements, buildings, fences and this sort of thing. One can relate this directly to personal hardship on the part of those who live in these areas. I have seen them lose their source of income for months - perhaps 6 months. I have seen families unable to carry on a normal life because of the effect of the devastation of flood.

There are the disabilities experienced during flood time through the loss of communications - the inundation of the roads which has made it impossible for transport to flow in the normal way. People have been isolated for up to 3 months because of flood. All of these things happened in earlier days before relief measures were instituted in the post-war period. All these disabilities are being very quickly moderated by flood mitigation measures. Although flooding is not prevented, these measures reduce it and its effect is so minimised that very little loss is sustained. There has been a great reduction in the extent of damage caused by a flood and a complete absence of the type of interruption to life and community living that was experienced in earlier years.

This is quite a remarkable story - a remarkable aspect of Australia’s progress. It has not happened because of some grandiose scheme designed by a great body of people. Reference has been made to the great work of the Snowy Mountains Authority and to those engaged in it. This flood mitigation work is of equal importance. But it has not required the enormous background of drum beating to get it going that was so evident in some other fields. These other fields are no more important than this field of flood mitigation. Certainly, on a cost benefit basis, they could not be sustained as being of greater value to the nation than the flood mitigation works to which I have referred. I do not say this in criticism of those who work on the great Snowy Mountains scheme or on similar schemes, in other countries, such as the Tennessee Valley scheme in the United States of America.

It is time for us in this country to realise that we are doing a job for the nation that is worth talking about. This Government, in co-operation with the New South Wales Government and local government, has achieved a success in this field of flood mitigation that is very notable indeed. Of course, what I have referred to is the first stage of this great work on the coastal rivers of New South Wales. Ultimately, 1 am sure it will be a realistic approach to consider not merely flood mitigation but also the possibilities of water storage in order further to control flooding. It will be possible to find a new direction for work of this kind based on the possibility of the diversion of water into the inland for irrigation purposes and the possibility of a greater use of hydro-electrification as a result of water storage.

I think an honourable member said in this House this afternoon that these are great things and that we should get on and do them. Certainly we should do them, but the first step is to make a positive approach through effective engineering planning. We do not want to approach this question merely because someone talks about it or because it is a proposition that makes good reading if someone quickly runs his eye through some story or statement that has been produced for publication. We want to see something on the drawing board and to see it stand up to the test of an economic assessment and a real feasibility study. These are important matters. The northern rivers of New South Wales will in the immediate future play a significant part in our national development. The flood mitigation programme to which we are directing our attention in this legislation provides an opportunity for the northern rivers of Australia to become an area of positive development. They have a potential greater than that of the Snowy Mountains area. This is because the total water resources of the northern rivers exceed the total resources of the Snowy. More water is available and we now have the prospect of seeing it used.

Water resources anywhere in Australia should be used for the benefit of the nation. This is a dry continent and its future is directly related to the utilisation of the available water, whether it be for agriculture, secondary industry or domestic supply. We will not in the future be able to afford to waste the water by allowing it merely to run into the ocean. Learning to use it and to take advantage of the great potential that is within our grasp is vital. I am pleased that we in this Parliament have the chance to show the nation that our schemes are practical and that we do not rush in with ill conceived and badly planned propositions. I support the current moves to extend the Ord scheme in the north-west of Australia and to encourage development in Queensland. I hope we will see a further extension of the schemes in New South Wales, Victoria and the other States on precisely the same lines as those adopted in the Bill that is now before us.

As I said a little earlier, sound development depends on a sound engineering approach. I pay a tribute to the New South Wales Government for the action it is taking now to implement a scheme that will provide for models of river valleys to be built. The models will enable a thorough examination to be made of the systems of drainage and water behaviour in the valleys of our important coastal rivers. A model of the Clarence River is now being constructed at a cost of about $70,000. The construction of a model of the Richmond River will commence within the next few months. A model of the Tweed River has been completed. Similar action will be taken in respect of the Macleay River, which is in the electorate of my colleague, the honourable member for Lyne (Mr Lucock). All this work is fundamental to future planning. This is the way to ensure that we have a sound approach to the development that all of us are so keen to see in this country. The Government’s policy in relation to the Snowy Mountains Authority and its employees is correct. To restate it briefly, the Government has said that it will retain the specialist section of the Authority to assist in an advisory capacity. It will not superimpose an authority on the States, which already have very fine instrumentalities engaged in public works and water conservation. The

States have done good work in the field of flood mitigation. But co-operation between each of these instrumentalities will ensure that important national schemes receive expert attention.

It was said a little earlier in this debate that a visit to the north coast of New South Wales by a group of honourable members from this House had produced good results. But we are now seeing the results of fundamental work that goes back very many years. There was a period in New South Wales when no progress was made. Every time a proposition was put up, successive Labor governments - first the McKell Government, then the Cahill Government and subsequently the Heffron Government - said they would not support a scheme of flood mitigation. The Chifley Government gave a consistent ‘No’ to every approach that was made in this Parliament for assistance for flood mitigation. I pay a tribute to the work done by the present Minister for Primary Industry (Mr Anthony) and the honourable member for Lyne, who is the Deputy Speaker and who is now in the Chair. Their agitation and their representations were primarily responsible for the joint venture that was ultimately undertaken by the State, the Commonwealth and the local government authorities.

The scope of this debate does not allow me to mention other aspects. However, 1 would like to state my own interest in flood mitigation. For 10 years I was Secretary of the Flood Mitigation Committee on the Richmond River and worked in the State Parliament for the introduction of a feasible scheme which would stand the test of a proper assessment at government level and which would be so attractive that funds would he allocated to enable the work to be carried out. In more recent times the first stages of the work have become a reality. I want to thank some of the senior members of the Government for their personal interest in the work. The Minister for Trade and Industry (Mr McEwen) visited the northern rivers on two occasions. He looked in detail at the work that was under way and gave encouraging advice to the local authorities. He urged them to go further and he played his part in seeing that the additional finance provided by this legislation became available. My colleague, the honourable member for Fisher (Mr Adermann), visited the area when he was Minister for Primary Industry and made an assessment of the work that was being done. His assessment related to the important aspects of programmed farm development, based on the use of the most modern scientific methods and upon the practical down to earth approach of a farmer. He saw an area that needed a lift, an area that had been beset by problems for many years.

It is a paradox that in Australia, as in many other countries, the fertile soils are alongside the rivers and on the flood plains. For years the normal flow of rivers and the flooding of rivers have resulted in the best soils being deposited in these areas. The paradox is that in the same locations floods cause devastation. In the United States and in Europe the biggest task in rural development has always been to find the means of overcoming the effects of flood devastation, lt is easy to say that we need merely provide the money and let people get on with the job. Anyone who thinks the problem is as simple as that should, I suggest, look at the Tennessee Valley Authority scheme in the United States of America, lt was my privilege to visit it a couple of years ago and to see the great project that was begun by the Roosevelt Administration in the 1930s. That was a very great undertaking indeed, but it has not provided the solution to the problems of the great Tennessee Valley riveT system.

The solutions to these problems are simply a matter of trial and error and of engineering and research in order to determine how what can be done can be translated into benefits for a rural community on a basis that produces not merely bricks and mortar, so to speak, or banks of soil or dams, whether they he earth fill, rock fill or concrete, lt is not merely a matter of providing these things. In reality, it is a matter of measuring the benefits that can be gained from the construction work that has to be undertaken. It is a matter of determining what a project will do for the community that it is designed to serve. History has shown what can happen in some of the oldest known parts of the world. Take the Nile River system, for instance. The loss of one crop a year brought ruin to those who lived and farmed along that great river system. Today the experts are devising means not merely of undertaking the necessary engineering works there but also of utilising lands that can be made to benefit from those works. We in Australia have a parallel problem. Whether we undertake works to conserve water or to drain it away under a flood mitigation scheme, whether we build a dam, a drain, a weir or a channel for irrigation purposes, the whole value of what we do must be related in the main to what will be produced in terms of productivity and the use to which the community can put that productivity in terms of gaining real value from it. Great progress has been made in flood mitigation on the coastal rivers of New South Wales. The financial assistance to be provided under the terms of this measure represents a first step. I commend the Bill to honourable members and 1 thank the Government for its support in flood mitigation work. I hope that at all levels there will be satisfaction at what is being accomplished.

Mr GRIFFITHS (Shortland) [9.2J- Mr Deputy Speaker, it appears to me that the honourable member for Cowper (Mr Robinson) has been kite flying in relation to the tragedy of Hoods and the need for flood mitigation works. He has told us of the high cost of the work that is being done. He blames the Chifley Federal Labor Government and the New South Wales Labor Government for inactivity in this field. But he then contradicted his argument by pointing out that what the Roosevelt Administration had done at the Federal level in the United States of America had not solved the problems of the Tennessee Valley.


– That was done in the depression days.


– That was done in he depression days when there were. I think, 8.5 million unemployed in America. I could understand the views of the honourable member for Cowper better if there were only one side to the disaster of floods. But there are two sides to such catastrophes. The honourable member spoke of the situation of farmers and of the need for flood mitigation works along the rivers, but he said nothing about the problems of home owners in the towns. If he examines the records, he will find that in 1949-50 two severe floods ravaged the Macleay Valley within 10 months, literally submerging thousands of homes. What was the cost to tha individual home owners of restoring their dwellings? What was done to help them? The honourable member for Cowper made great play of saying that only the present Commonwealth Government had done anything to help those who suffered. I remind him that this Government came into the picture only in 1964, 14 years after heavy floods ravaged and scoured the Hunter Valley, the Macleay Valley and all the river valleys to the north within New South Wales. The honourable member talked much about the northern rivers of that State. I remind him that it was a government of his own political views that in earlier days, by bad engineering methods, caused the northern rivers of New South Wales to be closed to steamships, thereby eliminating all the river borne traffic that had been used for the transport of a large volume of goods. I agree with him that planned engineering is needed if we are to do anything effective in the long term in relation to flood mitigation.

The purpose of this Bill is to continue and increase the financial assistance that the Commonwealth Government began to provide in 1964, when, in accordance with an agreement entered into with the State Government, the sum of $5. 5m was appropriated under the terms of the New South Wales Grant (Flood Mitigation) Act for flood mitigation works in New South Wales. The present measure will increase the amount of this assistance to $8m and the period over which it is to be given may be extended beyond 1969. However, much more money will have to be appropriated for flood mitigation works if the projects at present being carried out are to yield the best results. At the outset, Mr Deputy Speaker, may 1 say that although the Commonwealth’s present contribution to flood mitigation works generally has in my view been belated, paltry and miserly, it has nevertheless been greatly appreciated by all who have benefited or are likely to benefit from it, and especially by all the authorities, local government and otherwise, that have had the responsibility for undertaking flood mitigation measures.

Flooding plagues countries throughout the whole world, Sir. Fortunately for Australia, flooding is less severe and less devastating here than in many other countries. The annual cost and the loss to the world in life and property are inestimable. According to what I have read, in other parts of the world - especially in the United States, which was mentioned by the honourable member for Cowper - central governments have thrown in their entire resources to help overcome the suffering and distress of flood victims. In Australia, the situation is somewhat different, for the financial assistance in which a victim of the ravages of floods shares often depends on who he is or what he represents. Farmers on the Williams and Paterson Rivers have had their farms covered by flood waters several times over the past 2 or 3 years, have repeatedly lost their crops, but they never seem to qualify for flood relief. I often wonder why, Mr Deputy Speaker. The last major flood in the Hunter River occurred 13 years ago, in February 1955. Since then, only nuisance flooding has been experienced in various parts of the Hunter Valley. However, much major flooding has taken place on several occasions in nearly all the northern rivers of New South Wales. After the 1955 floods, the State Government was virtually compelled to establish a committee to advise on flood mitigation and control.

Mr Robinson:

– That was a Labor Government.


– That is right.

Mr Robinson:

– The honourable member said that it was compelled to appoint a committee.


– It was virtually compelled to do so because of the public outburst in support of demands for action to prevent further flooding if possible. The committee that was appointed was an excellent one. On it were represented the major water and land authorities in New South Wales. It was a well balanced committee and the only thing that it lacked in trying to do its job was, of course, finance. The Hunter Valley Conservation Trust was later reconstituted and, with the Hunter Valley Research Foundation has made a remarkable contribution to flood mitigation and water and land conservation in the Hunter Valley, and to the port of Newcastle generally. However, one aspect of the Conservation Trust’s work on flood mitigation that I strenuously oppose is the recent decision to impose a special tax on the ratepayers of the region to help meet the cost. la ray view, flood mitigation work is a responsibility of the Commonwealth, and the Federal Government’ should meet its cost. In addition to an increase in the general rate imposed by the Newcastle City Council this year, I find that I have to pay an extra $1.81 which is levied at the rate of 0.0625c in the dollar. It is not merely the payment of the levy that bothers me. It is the principle involved about which I am concerned.

Year by year rates increase and this adds to the burden of the cost of living. This applies especially in the case of the low wage earner who is struggling desperately to live in the light of increases in the cost of living, which is constantly rising. This added tax rightly belongs to the Commonwealth Government which, as the custodian of the public purse, controls the movement of finance just as it controls the revenues it secures by way of taxation in every form. The people of the Hunter Valley should not be called upon to subscribe to a new tax for something from which the majority of them will derive no benefit. Should another flood similar to the 1955 flood occur and the homes and furniture of people who live in the path of the raging torrents be destroyed - as were homes and property in Devonshire Street, Maitland in 1955 - will the residents and owners be fully compensated for their losses? I. know already that they will not be. On the other hand, there is every possibility that farmers will be afforded help, just as they are now assisted by government subsidies.

I have in my possession two newspapers, the ‘Macleay Argus’ of 24th July 1950 and the ‘Macleay Argus-Chronicle’ of 22nd October 1949. They contain photographs revealing the devastation that occurred in Maitland and north coast towns twice within 10 months. Those honourable members who doubt the value of flood mitigation work should look at these pictures. It is hard to imagine that anything like this could have occurred. It is impossible to gauge the extent of the devastation that took place. Homes in Kempsey were laid waste as a result of these floods. Many businessmen who were bankrupted have not been able to recover. One picture shows a second river channel. The picture was taken by Archie Miller of the

Newcastle Morning Herald’ from the air and the caption to it reads:

In its height the water topped the railway bridge, and, forming a second river, tore through with unexpected violence and ferocity, wrecking and destroying homes and other buildings. The course of the new river was part of the town shopping and residential area. Now, after two great floods, it is only wrecked shambles. From that area in the centre 70 business houses and homes have been washed away. The whole of the land, and every building in the picture was immersed at the height of the flood, some portions up to a height of 20 feet or more.

This is the type of waste and destruction that occurred in only one city, but several towns were besieged by the flood during the period to which I have referred. Since its inception 13 years ago the committee and its constituent bodies have struggled hard to do a job on the restricted amount of finance available to them, finance provided mainly by the State Government from appropriations it has received from the Commonwealth in tax reimbursements. State grants, aid for roads and similar grants. Funds were provided by the Commonwealth under the New South Wales Grant (Flood Mitigation) Act of 1964, which we are now amending. I very much doubt whether, in the absence of annual permanent grants to the States for flood mitigation and conservation work, in the long term the spending of a paltry $8m by the Commonwealth Government to subsidise State appropriations will be permanently effective. If what is being done today cannot bc supplemented regularly each year then this will bc a waste of public money, as another flood like those that occurred in 1949 and 1955 will prove.

My view is that there should be established a Commonwealth-States commission with almost unlimited power and authority to deal with the mammoth task of water conservation and soil conservation, flood mitigation, afforestation and reafforestation, land reclamation, dredging, harbour and river restoration works and a host of other undertakings related to water and land control and development. What better start could there be to such an ideal than for the Commonwealth Government to constitute the present Snowy Mountains Hydroelectric Authority as its segment of such a commission? Imagine the wealth of machinery and organisation that would become available almost automatically in the initial stages. The administrative headquarters could be where the Authority is presently situated at Cooma. Such an arrangement would be good as a two-year start. I know that the question of State rights, and parochial and traditional issues, will be raised by immature and ignorant people in opposition to the proposal, but every State has its problems of water and land conservation. This is apparent in Victoria which at present is suffering from water shortages. All over the world similar problems are developing as population increases and as advances occur in science, technical education, engineering, research, medicine and surgery, coupled with the ability of industries to discover new and large deposits of minerals, oil and natural gases, lt leads one to the conclusion that so long as there is a surplus production of goods and services available to mankind, and so long as men and women offer their services to industry, the money component of the nation should not be allowed to hinder, halt or interfere in any way with the nation’s expansion and progress. In this regard I make one significant appraisal of how the Australian Government could make available sufficient finance to enable a Commonwealth-State commission to work indefinitely on the project I have suggested. I quote a statement made by the Treasurer (Mr McMahon) on 14th September 1966 when he was speaking to the second reading of the National Debt Sinking Fund Bill 1966. Of course, I do not advocate the use of Loan Fund finances exclusively, but only to the extent necessary to supplement general revenue in the Consolidated Revenue Fund over a period of 20 years. The Consolidated Revenue Fund has regularly found millions of dollars for the Snowy Mountains Authority and in my view it can continue to find an equal amount, or more, to allow the type of work I refer to to be developed in the interests of Australia as a whole. The Treasurer said:

War service homes advances were financed out of Loan Fund up to 1930-31.

They were again in 1 950-5 1 . The Treasurer continued:

The total amount of the advances financed out of Loan Fund was $90m, but repayments to the Sinking Fund have already totalled $307m. The Sinking Fund thus has received $21 7m over the years for which no equivalent amount of debt was created in the first place.

They were the important words. He continued:

The Government now proposes to channel war service homes repayments into the Consolidated Revenue Fund.

It will therefore be seen that from an advance of $90m of Loan Fund money from the Government between 1930-31 and 1950-51, upwards of 9,000 homes were built or purchased for ex-servicemen. On today’s values they would be worth at least S75m. The Government has received back its original advance of $90m plus a profit of 5217m and apparently there is still more to come. I remind the House, that, according to the Treasurer, all of this was created without original debt in the first instance.

Of course, we all know that the use of $90m credit in those days was to enable the resources of the nation, including its manpower resources, to become fully employed after World War I. That is why I urge that a Commonwealth-States commission be set up to tackle the important problems of water and land conservation. As a passing thought, I suggest that perhaps honourable members may like to study other facets of the real wealth that the $90m created in such things as rates and insurance payments to local government organisations. Again, I point out that there should not be any real problem of finance for this should be able to be arranged by the Government from one or more of its many reserves. For instance, the Government has the Loan Consolidation and Investment Reserve which has a surplus at present of approximately $9l5m to its credit in that regard.

Mr Deputy Speaker, I again quote the Treasurer who said in 1966:

Since the Loan Consolidation and Investment Reserve was established in 19SS, it has cancelled $l,379m of Commonwealth securities including $152m of Treasury Bills. There is also the surplus of something like $43 1m in the National Welfare Fund, at present invested at 1%, and huge amounts standing to the credit of the Statutory Reserve from which investments could be made for flood prevention and mitigation.

For some years now, the Snowy Mountains Hydro-electric Authority has been functioning in part on a commercial basis, lt is regularly making repayments of advances to the Government. I suggest that that money instead of being paid into the Consolidated Revenue Fund could and should be being applied as capital for the work of flood mitigation and water conservation

Widden Creek - Work commenced to arrest bank erosion threatening a bridge on main road 208 between Muswellbrook and Rylstone.

Bowman’s Creek in the vicinity of Ravensworth - Stream excavation across extensive gravel deposits of pilot channels to provide a new course for the stream.

Williams River at Munni - Stream control work consisting of clearing the channel bank alignment and installation of protective work in front of eroding banks.

General - During the year some minor works of desnagging, bank protection and river improvement generally were carried out to treat isolated sections of erosion and remove obstructions to flow, the works being mainly confined to tributaries of the Hunter River.

Forty-eight miles of stream in the Hunter Valley which were seriously affected by erosion have been brought under control and another fifty-three miles are under treatment. At 30th June, 1966, the total expenditure on this work, completed under the Hunter Valley Flood Mitigation Act, was $2,923,407.

Inspections were made, in company with members of the Hunter Valley Conservation Trust, of many sections of streams in the Hunter Valley on which work is being undertaken and of other sections which are being considered for treatment. Proposals for the control of further lengths of streams are in the course of preparation.

In addition to the above work, work on Wollombi Brook now extends over a length of thirtyfive miles and, of this, the first twenty-three miles have developed and consolidated to the stage where maintenance work of a minor nature only is required. Expenditure to 30th June, 1966, on Wollombi Brook work totalled $615,917.

It is true that much work has been done also in various parts of the north since that Committee presented its full report on the Hunter River to the Government. Work has not only been done on that stream but also, as is to be seen, a great deal of work has been carried out on the Pages River, the Patterson River, the Williams River - I am not sure about the Goulburn River - as well as many of the creeks that feed into major streams in this area. Reports show that since 1893 seven really bad floods have been recorded. In that year, the maximum height that the Hunter River reached at Belmore Bridge at Maitland was 37 ft 3 in. In 1913 the height was 37 ft. In 1930 the highest point the river reached at that bridge was 37 ft 3 in. The height in 1949 was 36 ft 7 in. In 1950 the Hunter River reached the height of 35 ft 6 in while in 1952 the height it reached was 37 ft 8 in. The biggest flood of all occurred in 1955 when the river reached a height of 40 ft 4 in with such disastrous results to the area.

This report also discloses that in 1893 the backwater at Louth Park, which is the nerve centre of the rural activities of Maitland, reached 35 ft 11 in, whereas in 1955 it reached a height of 37 ft 5 in. In the years between those two floods, the greatest depth of backwater at Louth Park was 32 ft 2 in. This occurred in 1949. Considerable argument has always taken place after each flood as to the merits of what preventative action had been taken in the meantime to prevent further flooding. Levee banks had been made stronger and higher, and other action had always been taken. But as is to be seen, Mr Deputy Speaker, the levee banks hold in one place and break away in other places. Levee banks cannot be made higher at Maitland at the present time for fear of eventual disaster should bigger floods occur. In my view, more and bigger floods will occur and should that be so I shudder to think of the consequences.

There is an old adage, Mr Deputy Speaker, which is to this effect: Water cannot run uphill. Having experienced the flooding of the Hunter River over more than 50 years, and having worked in and seen the great floods of the north coast over a period almost as long - for I was in Kempsey in the 1949 flood and elsewhere on the coast during other floods - I am sure that a number of our engineers and others seem to think that water will run uphill. The Hunter River before reaching the sea at Newcastle meanders along a course twisting and turning like a snake for approximately 150 miles or more. It is fed by several major rivers and hundreds of tributaries and its flood plain which extends almost from Singleton to Newcastle is possibly the greatest and most important of any flood plain in this country.

Its source is the western side of the Great Dividing Range and other mountains. It is thought that the Glenbawn Dam will act as a buffer against future heavy flooding - which I doubt, and which I think is wishful thinking. The statistics of the Railways Department show that Newcastle is 4 feet above sea level; Maitland, 21 miles from Newcastle, is 19 feet above sea level; and Singleton which is 50 miles from Newcastle, is 137 feet above sea level. So, in 50 rail miles the flow of the river falls only 133 feet. Muswellbrook, which is 82 miles from Newcastle, is 477 feet above sea level and Ardglen at the top of the New England range, and 130 miles from Newcastle, is 4,073 feet above sea level. So, taking a line from the top of the range, the water that flows from all sources into the Hunter River falls about 4,070 feet in about 150 miles.

In a time of excessive flooding and, in particular, in a flood in which all the elements that cause flooding have been turned loose at the one time - I refer to such things as wind, tides and rain - is it any wonder that bad flooding occurs on the Hunter River in particular seeing that it is clogged up with silt and rubbish of all kinds? It has a fall of only 17 feet in its last 15 miles run. In earlier years ships such as the Newcastle’, ‘Namoi’ and ‘Gwydir’ could sail as far as Morpeth which is mors than 20 miles up the Hunter River. Today you cannot pull a boat half the distance, (n fact, excursions by ferries went as far as Paterson at one time, for I was on the S.S. Guthrie’ in or about 1912 when it grounded in the Paterson River with about 300 people on board. The trouble, I believe, is due to many factors, among them being lack of harbour supervision and bad engineering in the building of the harbour, the ferry ramp and the vehicular ferry approaches which have been a source of siltation. In the past the fault also has extended to harbour authorities which have allowed disused hulks of vessels to rust and rot along the foreshore. This has played a major role in harbour siltation. In addition to derelict craft lying around Stockton, mangrove trees have grown extensively along the foreshores of the river and other hazards can be seen.

My fear is that in future major floodings of the Hunter River and to a lesser degree other large rivers of northern New South Wales, there will be much greater loss of life and property than hitherto. My reasoning is based on the fact that for some years now, the great Hunter River plain between Maitland and Newcastle has been undergoing a radical change in its ponding area. The Newcastle islands industrial projects will ultimately join together Walsh Island, Dempsey Island, Moscheto Island, Goat Island and Ash Island in something like a 7,000 acre industrial complex. River silt will lift the area possibly upwards of 8 to 10 feet in places. In the Hexham and other areas, industry and roads have filled in thousands of acres of pondage. In the 1955 flood, water backed up in places previously never known to flood. For instance, water came in from the moors behind the Williamtown Air Base and joined up with the waters of Fullerton Cove. That water had come in from about Raymond Terrace. Water also flooded into Nelson Street, Wallsend, which had never previously been flooded. Some industries also had water in their establishments which previously had been free of it.

Much can be said - in fact 1 have only started to talk - of the flooding in the Hunter River valley. Until such time as something like a State-Commonwealth commission is set up - something which will take over completely the control of mitigating floods and putting all our great rivers into order - ‘then I am afraid this Government must at least stand some criticism which is thrown about from time to time. This is so because under uniform taxation it is up to the Commonwealth Government to see that these rivers are made free and properly useful for the people who aic likely to live in this country in the years to come.

Mr DEPUTY SPEAKER (Mr Clark)Order! The honourable member’s time has expired.


– 1 must confess at the outset that flooding is not one of the major problems in my electorate. Nevertheless, it is a matter that does affect my constituents as taxpayers who provide a certain amount of the money that is used for national works financed by the Commonwealth Government. I want to say a few words on the principle involved in this kind of legislation. 1 am not particularly concerned with flood mitigation in New South Wales. I certainly do not oppose the Bill. I dare say, in accordance with the principles which have prevailed in the past, the Commonwealth is adequately safeguarded. Indeed it is. I noticed, looking at the principal Act, that the Commonwealth provides, in effect, a subsidy on a $1 for SI basis. For every $1 that the State spends on specified types of work, the Commonwealth provides $1 to supplement it. Also, there is adequate provision to ensure that this money is not wasted.

I am not in any way opposing the Bill or the purpose of the Bill. But it is worth looking at a very important principle involved in it. This principle is that the Commonwealth provides money for selected national works. Upon what principle does the Commonwealth provide money and how much money and for what work is it provided? This is what affects my constituents. The Commonwealth may provide aid either, as in this case, in supplementation of moneys that the States may spend or a particular State may spend on a specified type of work or the Commonwealth may provide the whole of the money necessary for some particular national work. I rather think the Ord River scheme would come into this category. This money may either be loan money that the Commonwealth has at its disposal or it may be revenue that the Commonwealth uses as in the case of the Snowy Mountains scheme. The works may not be only flood mitigation works; they may be water conservation works or works of other kinds.

At this point 1 want to quote from the Report of the Committee of Economic Inquiry, referred to as the ‘Vernon Committee’, on this matter. I do this because I think it is highly relevant to this kind of exercise. Chapter 17 paragraph 72 of the Report states:

Development of some of the resources in the north may come about naturally because of the possibility of profit in the normal commercial sense. The development of Mount lsa and the bauxite deposits of the Weipa area may be cited as examples of this. In many cases, however, as with the present plans for development of the Ord River area of northern Western Australia, development cannot start on any scale without government initiative and the provision of large amounts of public capital. If a concentrated attack on the development of the north is to be made, it will have to bc along these lines. Reduced to its essentials, therefore, the problem is one of deciding on the proper distribution of public investment between many competing objectives, of which northern development is one.

Following is the part I want to underline and which applies to other parts of Australia besides the north:

Above all, information on the nature and extent of resources and informed estimates of costs of development and market prospects are required. Cool judgment about the prospects of particular proposals is essential. We welcome the steps taken by the Commonwealth Government, including the establishment of a Division of Northern Development in the Department of National Development, to place itself in a better position to make such assessments in relation to northern development. The next paragraph covers national works other than merely northern development.

The Vernon Committee in paragraph 73 states:

While we would insist that adequate analysis of all proposals, including proposals for northern development-

These are not proposals exclusively for northern development - that involve the use of public money is essential . we do not say that any such proposal should be passed or failed on economic grounds alone. A further judgment is required whether the combined benefits, economic and social, are such as to justify the cost. Such judgment1! can, in the last analysis, be made only by governments themselves.

The rest of this paragraph is vitally important for anyone considering the throwing about of multi-millions around Australia for alleged national works which, in many cases, are merely political rackets. The statement continues:

We think, however, that there would be merit in the establishment of a Special Projects Commission, or some such body, with the power to investigate proposals for major developmental projects, wherever they are located, to advise governments on them, and to publish its findings. 1 emphasise the words ‘and to publish its findings’. The statement goes on:

Such a body, if given sufficient powers and adequately stalled, could do much both to enlighten the public and to assist governments in arriving at the most informed decisions possible. lt is this proposal of the Vernon Committee that I. want to underline and emphasise. I underline and emphasise it in this kind of context: I believe, rightly or wrongly, that Australia’s future is very much in jeopardy. I do not want to enlarge upon the situation in which Australia stands today, alone as a nation after having been a colony looked after by others, but I do believe that from this time onwards we cannot squander money on alleged public works that are merely political rackets. We cannot afford this any more. We are no longer a colony which is in a position to construct roads, bridges, dams and all manner of such things merely to win a few votes in this electorate or that. We can no longer afford to waste and squander our money because of the position in which we find ourselves today, alone in the south west Pacific.

What kind of commission is proposed? It is called by the Vernon Committee - and there is no magic in the name - a Special Projects Commission. What are the characteristics of it? First, it has to be properly staffed and equipped, lt may well be that some of the staff of the Snowy Mountains Hydro-electric Authority who are no longer required to develop the Snowy Mountains area would be available for such a commission. 1 refer particularly to those who would be concerned with the engineering aspects of proposals. But of course engineering aspects are not the only aspects of developmental proposals. For example, if we consider the Ord scheme we find that the question there is nor merely whether we can construct a dam, or how the dam should be constructed, or how much water it may impound; it is rather a question of whether it will be possible to irrigate a sufficient area to produce those crops that can be sold profitably. The project involves, therefore, not only engineers but also economists and the Bureau of Agricultural Economics - people who can give some kind of estimate of market possibilities. What is needed is a cost benefit study. If we are going to spend many millions of dollars of the taxpayers’ money we have to be sure that what we invest is invested in a sound proposition which will pay for itself in due course. So I say that this cost benefit study is essential and what is needed is a body equipped to carry out this kind of study. This body could be the Snowy Mountains Authority plus something more. Constituted in this way it would be an appropriate body, commission, or authority - call it what you like.

The first characteristic, then, is that it be properly staffed and equipped - properly, that is, for its purpose, and I hope J have outlined its purpose adequately. Then the second characteristic, and a tremendously important one, is that it have a degree of independence. It must not be simply a group of individuals in the Department of National Development from whose reports you select those that happen to suit your purpose and say: ‘There you are, it is recommended. The Minister recommends it. We have reports of this kind and that kind to prove to us that this is a viable proposition.’ Such reports can be selected at will. So the independence of the body is just as important as its being specially equipped. In this sense it should be a body similar to the Tariff Board. It would bear comparison with the Tariff Board because the Government has established the Tariff Board as a kind of barrier between it and the pressure groups who want to increase tariffs, and this commission should be a barrier between the Government and the pressure groups who want a dam here, an irrigation system there, and flood mitigation works somewhere else, lt should be that kind of barrier and have a degree of independence in the same way as the Tariff Board has.

The third characteristic, which is related to the second, is, as stated in the Vernon Committee report, that the reports of the body receive publicity. It should publish its findings, to use the words of the Vernon Committee. This means that once the reports are laid on the table in this House, and so are made public, all the world will be able to examine the cost benefit analyses. If a particular amount of money is being spent on some political racket it will he quite clear that the project is not the kind of proposition in which any prudent person would invest his money, and therefore is not the kind of proposition in which the people’* money, contributed by way of subscriptions to loans, should be invested on their behalf.

The Vernon Committee says that, of course, there are other considerations. There are economic ones, there may be social ones. In short there are various considerations. But the point is that everything should be above board. A government may come along and say: ‘We are going to put money into such-and-such a proposition although the return is dubious and although, indeed, we anticipate a loss for years. We are doing this because there are social or national considerations that overbear the economic considerations’. But if a government wants to do something along these lines then let the Government prove its point. Let it be forced to prove its point. Let all the world see that from an economic point of view the proposal will not stand up.

I suggest that the time has come when governments should erect this barrier between themselves and pressure groups just as they have erected a barrier in the form of the Tariff Board between themselves and pressure groups. So I put this view, not in the belief that politicians will ever forsake politics, not in the belief that public money will not continue to be spent in political rackets-

Mr Robinson:

– I raise a point of order, Mr Deputy Speaker. I direct your attention to the fact that the honourable member has used the phrase ‘political rackets’ several times in his speech. This matter concerns my electorate, the phrase is offensive to me and I ask that the honourable member be directed to withdraw it and apologise.

Mr DEPUTY SPEAKER (Mr Cope)Order! There is nothing personal in the honourable member’s use of the phrase.


– If the honourable gentleman is offended I would apologise very quickly. 1 was not dealing with his flood mitigation works. I said right at the outset that 1 was not opposing the Bill. 1 was talking in principle about government moneys being provided for so-called national works. 1 was not talking about the honourable member’s flood mitigation works. God bless him. Let him have them. I was talking about a principle that I believe should be introduced into our system of subsidising national works through this Parliament. I was talking about it not, as I said, in the belief that anything will be done about it. There are too many people who prefer political rackets to the kind of investigatory authority that I have been talking about - and in this context I except the honourable member who has just told us he is offended. What I have suggested is, I believe, what ought to be done, and somebody in this place ought to say what ought to be done.


– Having listened to the honourable member for Bradfield (Mr Turner), it is my belief that his remarks had no bearing whatsoever on the Bill before the House. The amount of foundation work that has been carried out on the investigation of flood mitigation works on the six rivers involved has been considerable. Before work on any of those rivers commenced, the advantage to the community was well understood and the feasibility of the whole project was well established. Returning to the remarks of the honourable member for Bradfield, 1 suggest to the House that the report of the Vernon Committee should not be taken as divine guidance. That committee was no greater a power than three other people with the necessary qualifications would be. If we followed the Vernon Committee blindly, as the honourable member for Bradfield has suggested, Australia would be left in the doldrums for many years. I shall endeavour to prove that if we took notice of what the Vernon Committee said with regard to northern development, our northern areas would remain a vast wasteland for ever. The Good Book says: ‘Your young men shall see visions, and your old men shall dream dreams’. I have the vision of a plush, wonderful north, despite what the Vernon Committee report says. Because of what private enterprise has done in the north of Australia it is quickly becoming a vast and flourishing part of our continent. If we take notice of these academics - these people that give decisions by divine guidance - we will be left in the doldrums forever.

I would now like to reply to a brother Novocastrian. the honourable member for Shortland (Mr Griffiths), who spoke of the devastating floods on the Macleay River in 1949. He stated that nothing was done from that time until 1955. In 1945, and again several times after when matters of flood mitigation and finance therefor were mentioned, Mr Chifley repeatedly stated that it was not the responsibility of the Commonwealth Government to provide finance but that it was purely a State matter. The honourable member for Shortland said that the amount that this Government has provided for flood mitigation over the years has been poor. The amount must be reaching near the $100m mark now for schemes such as the Ord River, the Emerald and the brigalow country. The honourable member said that the amount that has been provided by this Government is paltry, but not one penny was provided by the previous Labor Government. The first time that the Commonwealth Government embarked on assistance such as we are now considering was 1964. For years the New South Wales Labor Government was wasting money spent on flood relief. Instead of working to a broad principle and getting down to tin tacks it allowed the matter to drift on. But to the great credit of the Northern

Rivers area the local shire council went into the matter very thoroughly and eventually put a proposition to the New South Wales Government, and because of that, in 1963 the New South Wales Government provided a subsidy of $2 for every $1 provided by the local authorities in the Northern Rivers area and the Shoalhaven River area. This Commonwealth Government then came in and found an equal amount to augment the State Government’s contributions. It is unfortunate that there should be so much politics and pettiness brought into a great national undertaking such as this. We should be ready to concede that these things are important.

If one travels around Australia one will soon see that the three main ingredients that we require in order to develop Australia are water, money and people. Although we have plenty of water available from time to time we are generally short of these three ingredients. The magnitude of the problem that confronts Australia today in regard to water conservation is almost frightening. We have to tackle this problem with great confidence and great faith, and unless we do that we will achieve nothing. Discounting the nuisance floods, which sometimes are wrongly named, because they can be of great advantage from time to time in building up soil value, let us consider the devastation that occurs through major floods. Firstly, there is the loss of human life. This is to be deplored. But from time immemorial man has lived where the water is. Even in these modern times he will live by the water rather than carry the water a little way back from a flood area and if it is a seaside resort or a holiday resort he will live by the water so that he can dive into it and enjoy it during a holiday period. We also have to consider the great loss of property that occurs through these devastating floods. For example, there is the loss of stock and the loss of production.

The honourable member for Shortland stated that the people who are paying a rate to assist the Hunter Valley Conservation Trust receive no benefit. Of course, they receive benefit. Immediately a devastating flood occurs there is loss of production, and commerce and transport are affected. There is a lack of food at markets and eventually everyone must suffer in some way or other. Therefore the people of Newcastle who are paying a minimal tax to augment the funds of the Trust are doing a good thing for themselves and a good thing for the nation.

This legislation provides financial assistance for flood mitigation of an area of 5,500,000 acres for five rivers, excluding the Hunter River. I think that the annual revenue from production in the area of those five rivers amounts to something like S20m. The 1955 flood on the Hunter River cost SI 6m. That is a large amount of money, but over the years up to 1963, other than what the local councils did, there was no great effort to bring about flood mitigation. We cannot prevent floods, but we should have used in some other way the money that we have doled out in relief. Although the Commonwealth provided relief in only a small way during this period, if the money had been spent on flood mitigation it would have given greater alleviation and prevented some of the major floodings. Floods are not peculiar to Australia. Huge floods occur in the United States of America, along the Nile, in China and in the low lying lands of South East Asia. They are a challenge to mankind. In Holland, land below sea level has been reclaimed and is now fertile and productive.

There is a shortfall in the number of trained personnel required to work out the feasibility of such projects as those now under discussion. However, there has been a great improvement in the availability of manpower, even in the last 4 years. In Professor Munro I suppose we have one of the most brilliant men in this field of engineering in the world. He has been assisted by Mr Scholer of the New South Wales Department of Public Works, who has carried out a tremendous amount of research into the Hawkesbury River. The honourable member for Cowper (Mr Robinson) spoke of a model of two of the northern rivers. 1 would like to tell the honourable member that Mr Scholer prepared a model of the Hawkesbury River and Nepean Valley back in 1962 or 1963 but unfortunately the Labor Government in New South Wales did not take any notice of it.

There has been an awakening on the part of authorities to the responsibilities facing them in regard to flood mitigation. We were led to believe when the Warragamba Dam project was commenced that it was to be. firstly, a water conservation project; secondly, an electricity generating project; and thirdly, a flood mitigation project. Although the dam had been built for some years the New South Wales Labor Government did not take the precaution of constructing a pipeline to feed water to the various holding dams in the Sydney metropolitan area. This water was never used for power generation. Unfortunately, in 1 964, I think, the Hawkesbury River below the dam was subjected to a deluge. The dam was full and the gates had to be opened as the tide was running in. Consequently, there was a devastating flood. This story illustrates to honourable members the ineptitude of some governments when building a clam. Despite the fact that there was water rationing from time to time the government at that time did not have enough vision to construct pipelines to carry water from this huge conservation dam across to subsidiary dams.

The bed of the Hawkesbury River was damaged as a result of the construction of the Warragamba Dam and the banks have been swept away. The people of New South Wales have been lamenting that the Hawkesbury River and the Nepean River complex was not included when funds were first made available for these flood mitigation works at the time the original legislation was placed before this House in 1964. This omission was due to the then Labor Government of New South Wales.

Professor Munro and Mr Scholer have worked for years on plans for the Hawkesbury River, in conjunction wilh the Hawkesbury Flood Mitigation Committee. They have accumulated a tremendous amount of detail and have done a tremendous amount of research. Professor Munro told me that the scientific challenge of the Hawkesbury River and the Nepean Valley was so great that if I went to the United States of America I would find that there would be a S200m research foundation willing to take up that challenge. Professor Munro visited America and I believe that because of the scientific challenge offered by the area, American authorities would have been pleased to consider such a foundation.

Honourable members have spoken about the Snowy Mountains Hydro-electric Authority but it must be remembered that in State governments and in departments there are zealous public servants and engineers who do not like people coming into their areas or divisions with new ideas. In New South Wales at present, under the leadership of the Honourable Jack Beale, the Minister for Conservation, and the Honourable Davis Hughes, Minister for Public Works, there has been formed a team of engineers who are keen on and enthusiastic about getting on with this work. That is why I am pleased to be present to support this Bill.

I congratulate the Government on providing another $2.5m for this work. The Government is making a free grant to the New South Wales Government in order to assist people who are endeavouring to assist themselves. This is the sort of activity we should encourage. We are encouraging these people to do something for themselves but they will reap the greatest benefit. Although it is of national importance that we assist them, it is up to these people who earn their living and make their profits directly from the land to endeavour to assist themselves. This is what appeals to me in respect of this legislation. The people living in the Northern Rivers district originally went into the feasibility of this flood mitigation scheme. They were prepared to back their ideas with their money. The State Government subsidised that work, and in 1964 and again now the Commonwealth has come into the picture.

But so much is involved in flood mitigation. There is so much to learn and so much to be done. I have not heard any honourable member refer to flood forecasting. In the Northern Rivers area, I believe, there is some sort of electronic system but in the Hawkesbury River area the people have to depend on the Metropolitan Water, Sewerage and Drainage Board, the police and the civil defence authorities. The civil defence authorities and other people have done a tremendous job in my area. The work performed by them at times of major floods has been a great credit to them. I pay my personal tribute to the personnel involved.

I have referred to the river complex in different areas. To flood mitigation there is the alternative of floods and droughts. There is no truer saying than the one to the effect that after every drought there comes a flood. What should we do? First of all, we should harness the head of the river. That should be used for the purpose of controlling the flow of water down stream. If the height of water is sufficient and if the flow is sufficiently strong, the water should be used for generating electricity. A great deal of thought must be given to this matter, because as I have already pointed out, in the Hawkesbury and Nepean area the water is allowed to flow out of the reservoir and the foundations of the rivers have been considerably damaged. Once this fault occurs there is a breaking of the river banks and a great waste of land. It is pitiful to see acres upon acres of the fertile land on the Richmond River and Windsor River in New South Wales being gradually eroded and washed out to sea. We are endeavouring in a small way to prevent this happening by the redirection of the rivers and the clearing of snags.

There are many problems to overcome. But this Bill gives encouragement in respect of the four rivers in the north and the Shoalhaven River and the Hunter River in the south. The Hunter River Conservation Trust has done a tremendous job. I disagree with some of the statements which were made in this House in a debate in 1964. I know the good work that the Trust has performed. I pay a tribute to the industrial, business and commercial concerns in the area. Although they are rated to support this Trust, several of these concerns provide up to $1,000 per year to assist in flood mitigation work on the Hunter.

Mr Deputy Speaker, before concluding 1 want to point out that at the present time the New South Wales Government has done a great deal of preliminary work in regard to the Hawkesbury. When the New South Wales Government makes a request to this Government for the sum of $1,440,000 in order to provide some relief in the HawkesburyNepean valley, I trust that both sides of the House will support my endeavours to have that request met. I hope that some flood mitigation work will be carried out in that wonderful, old fertile valley of Australia. When I asked the late Mr Harold Holt why the Hawkesbury and Nepean valley was not included in the scheme of flood mitigation, he said: ‘That is easy to answer. The New South Wales Government did not include it in its request.’ This area supplies the greater proportion of the vegetables and a fair amount of milk for the metropolis of Sydney. It is a shame that the Hawkesbury-Nepean valley has not been included in the scheme. As I said, when the New South Wales Government presents its reports and asks for assistance to finance the Hawkesbury-Nepean valley scheme, I trust that both sides of the House will support me in the matter.


– I have listened with great interest tonight to the debate and to the suggestions that have’ been put forward, particularly with respect to the development of a benefit cost analysis of the measurement of water conservation schemes and of this flood mitigation scheme. But my principal reason for rising to speak tonight is not to develop the arguments for water conservation. I listened with amazement to the honourable member for Cowper (Mr Robinson) who, on behalf of the Australian Country Party, attempted to take credit for this flood mitigation scheme. I do not blame him for trying to do this if he can get away with it, but I think it is very important to put the record straight concerning the history of the Commonwealth Government’s contribution to this particular scheme.

The man who was most responsible for introducing this flood mitigation scheme was the former member for Cowper, Mr Frank McGuren. At least, Mr McGuren was able to tell the truth. He always admitted that the former leader of the Country Party, Sir Earle Page, was the father of this scheme. He said it in this House, as reported in Hansard, and he said it outside this House and in his electorate.

Mr Robinson:

– He certainly did not.


– The honourable member for Cowper says that Sir Earle Page did not father this scheme. What Mr McGuren stated is in Hansard. I think that all members of the Country Party will give Sir Earle Page credit for this scheme. I will now put the position in perspective. The honourable member for Macarthur (Mr Jeff Bate) is trying to interject. He also is one of those who bitterly opposed the scheme in 1962, as Hansard will show. On 4th October 1962 the then honourable member for Cowper, Mr McGuren, moved the following amendment when the estimates for the Department of the Treasury were being debated:

That the amount of the vote … be reduced by £1-

As an instruction to the Government -

To make an immediate grant on a £1 for £1 basis with the New South Wales Government for the urgent and imperative work being carried out by the county councils to mitigate and control the frequent and disastrous Hoods in the northern rivers of New South Wales, in order to preserve the valuable production of the great north coast farming areas and prevent the heavy economic losses which follow these floods.

The then member for Cowper went on to discuss this particular amendment. He gave credit to Sir Earle Page for introducing this flood mitigation scheme. lt is important to note, as was pointed out by the present Leader of the Opposition (Mr Whitlam), that only one member of the Country Party had ever raised this particular issue in the Parliament, and that was Sir Earle Page. What, in fact, happened? I am very glad to see that the Minister for Primary Industry (Mr Anthony) has now come into the chamber because he is one who opposed the amendment moved by the then member for Cowper, Mr McGuren. What happened to this particular amendment? lt was ridiculed in this Parliament by the honourable member for Richmond (Mr Anthony), the honourable member for Macarthur and the honourable member for Lyne (Mr Lucock). The Minister for Primary Industry sits at the table with a lovely smile on his face sometimes, but if honourable members go back through Hansard theywill be amazed at what he said and how he opposed, not only the flood mitigation scheme, but also the Commonwealth’s contribution in general for water conservation. His remarks are reported in Hansard, if anybody wants to read them.

Mr Devine:

– What is the page?


– They appear at page 1157 of 4th October 1962. The Minister for Primary Industry, after the honourable member for Cowper had moved his amendment, said:

Yet this member for Cowper comes here and has the audacity to say that the Commonwealth Government should give money for flood control works.

I am very sensitive about this matter, because the county councils are being hoodwinked into thinking that they should press the Commonwealth Government for money.

Mr Robinson:

– That is right; it was a phoney.


– The present honourable member for Cowper says it was a phoney. The Minister for Primary Industry said in 1962 that flood mitigation is the sole responsibility of the States and that if the Commonwealth Government gave any money to New South Wales for flood mitigation it would create a precedent for all time. He added:

  1. . the Commonwealth would be obliged to enter the field of water conservation and of flood mitigation.

What a remarkable statement. The Prime Minister (Mr Gorton), the Minister for National Development (Mr Fairbairn), who has just left, and others laud the Commonwealth for the great work it is doing in water conservation and members of the Australian Country Party now take credit for flood mitigation schemes. In 1962 the Minister said:

These matters are completely the responsibility of the Slates. If the Commonwealth were to accept these responsibilities, the whole of the tax reimbursement scheme and all the functions of the Australian Loan Council would have to be altered.

He went on to say:

But the honourable member for Cowper–

That was Mr McGuren at that time - has the audacity to say that the Commonwealth should undertake this work, that the Commonwealth should give aid on a £1 for £1 basis. How ridiculous!

That was a member of the Australian Country Party ridiculing the action of a Labor member and putting forward all the reasons why the Commonwealth should not support a scheme of water conservation.

Let me now deal briefly with the other honourable member who opposed the scheme. We know that he is a man of principle and a man who never deceives the Parliament. I refer to the honourable member for Lyne. He made a most profound statement in opposing the proposal for flood mitigation in 1962. He said, referring to the proposal of Mr McGuren, who was then the honourable member for Cowper:

It is designed to present the honourable member for Cowper as a magnificent champion of the people of the area concerned.

And that he was.

Mr Robinson:

– Where is he now?

Mr SPEAKER (Hon. W. J. Aston)Order! The honourable member for Cowper will cease interjecting. He has already spoken in this debate.


– The profound statement made by the honourable member for Lyne shows clearly the extent of his opposition to the scheme. He said:

If effect were given to the proposal of the honourable member, the result would be detrimental to the people of this area and to the rest of Australia. Opposition supporters have often told Government supporters that they should face up to their responsibilities. If ever I go before the people and attempt to bribe them to vote for me, I hope somebody else will nominate against me and be successful.

That was the view of the Australian Country Party in 1962. Now members of the Country Party claim credit for the implementation of flood mitigation schemes. 1 say no more.

St George

– We commenced this debate tonight at 8.30 and we were going along very nicely. We had a lovely little audience here and we were discussing flood mitigation. But then the honourable member for Dawson (Dr Patterson) rose and introduced politics into the debate. My mind went back to 1964 and the acrimonious debate that took place then. That debate almost developed into a memorial service for the former member for Cowper. If I remember correctly the Leader of the Opposition (Mr Whitlam), who was then the Deputy Leader, spoke for threequarters of an hour on the performance of the former honourable member for Cowper and did not bother to talk about flood mitigation throughout the whole of his speech. Some remarkable statements were made about the establishment of an Army base at Grafton and these covered about four pages of Hansard. The Reverend Jones from Newcastle followed and took part in the memorial service with great gusto. I believe he did on occasions mention flood mitigation, but it was left to the honourable member for Shorthland (Mr Griffiths) to give us a run down on flood mitigation in his area. My distinguished colleague, the honourable member for Macarthur (Mr Jeff Bate), the honourable member for Cowper (Mr Robinson) and the honourable member for Evans (Dr Mackay) discussed the subject at length. But the debate in 1964, when the original amount of $5. 5m was allocated, was marked by acrimony and political references.

If I had been given the call at 9.15 when 1 tried to get it I would have said that tonight’s debate was marked by a splendid appreciation of the needs of the people of the northern rivers and the Hunter Valley. Those of us who are not directly concerned with flood mitigation did get an appreciation in the 1964 debate and in the debate that took place earlier tonight of the amount of work that is involved. The work started originally in 1939, 1940 and 1941 with some local groups, particularly on the northern rivers and to a lesser degree in the Hunter Valley, undertaking the basic work, for which they carried the financial burden themselves, ft was not until 1944 or 1945, when substantial floods occurred in the Hunter Valley and in some other parts of the north coast, that a determined effort was made by the New South Wales Government.

Mr Griffiths:

– lt is still only a patchwork scheme.


– That is certainly so. I remind the honourable member for Shortland that in 1947 the Huddleston report recommended that work, estimated to cost $17m, be undertaken. The Labor Party cannot take credit for doing any substantial work. Labor dominated the benches in the New South Wales Parliament for 24 years and did not lose office until 3 years ago. But the scheme proposed in 1947 has still not been fully implemented. The Huddleston report in 1947 was really the start of planning for the control of floods. Following that, a body known as the Hunter Valley Interim Conservation Advisory Committee was formed. As a result of its recommendations, the Hunter Valley Conservation Trust Act of 1950 w”as introduced into the Parliament of New South Wales. The Rivers and Foreshores Improvement Act was introduced in 1948 and was substantially amended in 1955. The Hunter Valley Committee of Advice in 1955 submitted a lengthy plan. It was in almost identical terms with the Hunter Valley Flood Mitigation Act of 1956. It would appear that on the New South Wales scene there had begun some sort of crystallisation of ideas about what was required for flood mitigation works in that State, particularly in the Hunter Valley, the area in all Australia that is most prone to extensive flooding, and also the northern rivers of the State. However, it is highly questionable whether any thrust was given to the plans at that stage. Although attempts to get action were made in the intervening period, it was not until 1964 that any worthwhile momentum was injected into flood mitigation schemes in New South Wales.

For your information, Sir, 1 want to say that I understand that at this stage the New South Wales authorities rely on the Hunter Valley Conservation Trust to coordinate work in that Valley and to advise the State Government on what is required. I have referred to various New South Wales Acts. You will recall, Sir, that under the terms of the New South Wales Grant (Flood Mitigation) Act 1964 the Commonwealth’s assistance was limited to $5.5m. In 1966, there was a minor, routine amending measure related solely to decimal currency. That is why the long title of the Bill refers to the New South Wales Grant (Flood Mitigation) Act 1964-1966. The present measure will raise the limit on the Commonwealth’s financial assistance to $8m. We were told earlier in the debate that the Commonwealth matches dollar for dollar funds contributed by the State Government In relation to works on the Hunter River, the State contributes S3 for every $1 spent by the local authority. So, of the total sum spent on works on that river, three-sevenths is contributed by the Commonwealth, three-sevenths by the State and one-seventh by the local authorities. For works on the other streams mentioned - the Macleay, Richmond, Clarence, Tweed and Shoalhaven riven - the contributions are respectively two-fifths, two-fifths and onefifth. lt is known, though, remarkably enough, it has hardly been mentioned tonight, that we can hardly hope to eliminate flooding completely. Basically, flood mitigation work is designed to restrain the impact of floodwaters, to prevent damage to stream banks and surrounding areas, to reduce to the minimum the areas inundated and, after the peak of flooding has passed, to expedite drainage. The most important facet of all, of course, is the protection by levee banks of urban areas. This protection is provided nowadays by a very advanced engineering science. The honourable member for

Mitchell (Mr Irwin) paid a tribute to the engineering and other staffs of the various New South Wales Government authorities and the expert advisers who are concerned with flood mitigation works. The engineers have calculated that temporary storage in dams is useful but not very practical in Australia where, overall, there is such a dire shortage of water. I understand that some storage is provided between the levee banks at riversides and others farther back. In Australia, as yet, not a great deal of storage is provided in this manner. 1 understand that much more is provided by this means in the United States of America. Other engineering work is undertaken to de-snag streams and to remove as many obstacles as possible in order that more water may be contained within river systems without overflowing the banks. As I have mentioned, a most important feature of flood mitigation work is the expediting of drainage of flooded areas after the peak of flooding has passed. This is done by means of a series of flood gates and canals. Life and work in the urban communities must go on as far as practicable, and much effort has been directed to the protection of urban areas so that normal activity shall be interfered with as little as possible. A system of priorities has been developed, with selected areas graded according to population.

As I said earlier, the incidence of flooding and its impact are most felt in the Hunter Valley, which is affected more than any other area in Australia by this sort of occurrence. I gather that in New South Wales the sort of flood mitigation work that we are discussing normally originates with local groups that want flood mitigation works to be undertaken in the areas with which they are concerned. Their representations are gathered together and from time to time submitted to the State Government by the Water Conservation and Irrigation Commission. The Department of Public Works also is involved. The Commission is responsible for the upper reaches of streams and the Department for the tidal sections in the lower reaches. Two other instrumentalities are concerned also. Tha Soil Conservation Service deals with erosion works on the banks of streams and the Department of Agriculture is concerned with flat areas of land adjacent to the higher reaches. Feasibility studies are first undertaken and after a project is approved funds are provided by the State Government and the Commonwealth in accordance with the arrangement under which the Commonwealth matches State contributions dollar for dollar. When recommendations for works are submitted to the State Government, it relies on the Committee of Advice on Flood Control and Mitigation and on the Hunter Valley Conservation Trust for advice. lt is now only about 4 years since thi original Act was passed in 1964. We have heard a lot of discussion tonight about who should receive credit for the introduction of this scheme for financial assistance. This discussion may be interesting and even enjoyable and entertaining to some honourable members. However, 1 believe that all of us agree that the important thing, and the thought that is uppermost in our minds, is that flood mitigation work is of great value and that in recent years it has gained momentum and received support at all levels of administration from the Commonwealth at the top down to local authorities. I believe that it is of interest not only to honourable members but also to the public to reflect on what the honourable member for Bradfield (Mr Turner) has said. He spoke somewhat critically about the expenditure of funds and questioned whether they are being spent on these projects in the right manner. In his terms, he questioned whether expenditure might be directed towards political rackets. I do not agree with the extreme terms that he used, but I do not believe that we ought to dismiss completely the observations that he has made. I know that in practice it may not be possible to introduce a system such as that which he proposed. However, let us not overlook the fact that already we have the Joint Parliamentary Standing Committee on Public Works, which investigates substantial projects. During 1966 it vetted works to the value of $88m, I think. I believe that the honourable member for Bradfield has in mind a similar kind of committee to which flood mitigation proposals could be referred. The interposition of such a committee might have the effect of slowing down works a little and such a system might seem somewhat cumbersome, but I believe that it would at least have the virtue that the people of Australia would have their minds set at rest about the spending of their money and would be more sure that it had been spent properly. Such a committee would lend weight to the belief that justice was being done. It is doubtful, however, whether the proposal advanced by the honourable member for Bradfield could be fully implemented throughout the whole ambit of political activity.

J am inclined to share the views of my distinguished colleague from Mitchell, who gave us a quotation that made a considerable impact on my mind, though I cannot now recall his exact words. He said that much wisdom, much breadth of vision and much foresight were required by the younger men of Australia to put into full effect the splendid works that have been undertaken in northern areas. The honourable member for Bradfield, I suggest, must bear this in mind in putting forward the submissions that he made tonight about the manner in which funds should be expended. He made the point, and 1 appreciate it, that he was not necessarily standing in the way of this Bill, which is designed to promote flood mitigation works. I expect that he was worried most about a flood of money being taken from his electors in the form of taxes and felt that he was bound to make some reference to these matters. What we will need to do before we can achieve his objective of a Commonwealth-State financial agreement is to have another look at and think about the present system of financing capital works from revenue, lt has been considered prudent and necessary for money from revenue to be directed to capital works in order that the economy may be kept in a balance which is acceptable and suitable for the country as a whole and which ensures a desirable economic climate for the community at large.

It would be useful if honourable members could gain some appreciation of the magnitude of the works undertaken in certain areas of the Hunter Valley and in northern river areas by responsible authorities in New South Wales. I refer to the Water Conservation and Irrigation Commission’s Synopsis of River Improvement Works in the Hunter Valley in which it is stated:

Apart from Wollombi Brook 47 miles of stream in the Hunter Valley which were seriously affected by erosion have been brought under control and another 93 miles are under treatment.

They are not insignificant figures, and honourable members who represent northern river areas and parts of the Hunter Valley will appreciate the value of this type of work. Another portion of the synopsis reads:

The largest single embayment of bank erosion treated has been on the Hunter River at Scott’s Flat, located approximately 6 miles downstream from Singleton. Erosion of the left bank commenced in 1949, when an isolated, pocket developed, and by July 1964 there had been lost 50 acres of land, of which the last six were washed away in one flood which did not even overtop the banks . . . Although delayed by a flood which occurred soon after commencement, the necessary work was completed by the 30th September 1964 and the expenditure to 3Isi December 1966 was $98,466.

I am pleased lo note the interest of honourable members in the corner opposite.

Mr Charles Jones:

– Country Party members are not interested in this matter. They never have been. If you want proof of that, look at Hansard.

Mr Robinson:

– Who is making the speech?

Mr Charles Jones:

– The honourable member for St George is trying to, but you are not giving him a go.


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


– Another extract from the synopsis worth noting reads:

The new channel across the 16 ft high sand deposits on the inside of the bend was constructed with a bottom width of 30 ft compared with the planned width between banks of 300 ft and involved the excavation of 90,000 cubic yards of material. The major problem is that of ensuring that the river will stay on its new course and to do this a wide and dense growth of trees (usually willows) is established across the former bed of the stream on the revised alignment for the river bank. Planting of trees alone provides no guarantee of success and obstructions are installed to retard the flow and protect the willows until they are well developed and consolidated in position.


-Order! There is too much conversation audible from the Country Party benches.


– The extract continues:

The spoil obtained by the construction of the pilot channel was placed in the stream bed on the selected alignment of the bank to provide a base just above water level for the installation thereon of these obstructions which extend upstream to an existing stable section of bank.

From this report one can gain an appreciation of the detail of the work that has been undertaken. I could refer at length to work that has been done in the Hunter River Valley area in recent years, particularly in the first 2 or 3 years following the implementation of this legislation. I had intended to quote extensively from a report by the New South Wales Public Works Department, but my colleagues opposite apparently are fully aware of the details contained in that report so I will not cite it. However-

Mr Charles Jones:

Mr Speaker, may I move that the report be incorporated in Hansard?


– No.


– I refer honourable members to the New South Wales Water Conservation and Irrigation Commission’s 1966 report in relation to rivers and foreshores improvements, portion of which reads:

Since ‘ the commencement of operations under the Rivers and Foreshores Improvement Act, 1948, the Commission has received 1,003 requests for assistance or advice in respect of river improvement problems.

Inspections have been made of 836 of these requests but some cases will require further detailed investigations before proposals for protection works can be prepared.

Collaboration has been maintained between the Commission and the Committee of Advice on Flood Control and Mitigation, the Hunter Valley Conservation Trust, the Macleay River County Council and other local government bodies in carrying out protection works on streams throughout the State.

In a section of the report related to river improvement and river control works it is stated:

On those sections of streams where work was completed some years ago and is now fully developed, minor routine maintenance, as required, was carried out.

Work of this nature was undertaken on eight rivers including Pages River, Hunter River, Goulburn River*- Martindale Creek, Williams River and Black Creek, while follow up work was carried out on nine rivers, including the Hunter River and the Paterson River. Work in other parts of the Hunter Valley included work at Westbrook at Michell’s Flat and the Williams River at Bendolba where willows were planted as a necessary part of previously installed work; and at Glennies Creek, where there was major stream control work consisting of relocating the main flow channel within the gravel deposits of the creek bed as well as the installation of associated protection. Other work is detailed at length. It indicates to honourable members how the money they allocate is being expended. The report mentions work that is being undertaken on the Macquarie River, Belubula River, Murray River, Castlereagh River, Gloucester River, Bell River, Macleay River, Peel River, Namoi River, Goobang Creek, Apsley River, Dumaresq Creek, Guidgera Creek and in various other areas. I point out to the honourable member for Lilley (Mr Kevin Cairns) that the New South Wales Government is not relying solely on Commonwealth moneys to undertake this type of work. It is important for this point to be made, because some honourable members from States other than New South Wales are inclined to think that some States rely entirely on Commonwealth money, but the report I have quoted illustrates the comprehensive nature of the work being undertaken by New South Wales authorities. This is a classic example of the Government working in association with provincial and local bodies. This has always been the objective of the Commonwealth Government, and here it is in full bloom in this flood mitigation legislation.

Another important aspect to which other honourable members have referred is that we have about 3 million square miles of country encircled by 12,000 miles of coastline, and we would be recreant to our trust if we were to neglect the lands which have been left to us to develop. This is an important factor. We must utilise the very rich alluvial plains of the northern areas of New South Wales and the Hunter Valley as well as many similar areas in other States. It is important that those areas be utilised to the fullest extent and that we appreciate the great heritage that we have in this country.

Supporting this legislation are the extensive moneys which are being directed into water resources, lt is the combination of various Acts of the type that is so spectacularly in the forefront of the administration of this Government. But it is in the work of flood mitigation that we need to address ourselves more specifically to what 1 term - I used this expression in my speech during the Address-in-Reply debate the other day - a shake-out of these areas of misapplication of moneys. This is where we are falling down in our job. When I say our job’, I refer to the job of the Australian nation in the broadest sense. We are not utilising our heritage. Our moneys are not being used in the right direction. The classic example of this point is to be found in the matter of subsidies payable to the dairy industry. Over a lengthy period, we have found it desirable to direct approximately S27m per annum into dairying. Now, we have had to rethink this form of assistance. We have had to take another look at it. We can see now that this money, by being redirected, can be put to far better use. One suggestion for its use is reafforestation. Other suggestions are forthcoming as to ways in which these colossal amounts of money can be and should be directed into the best avenues where they will gain the greatest advantage for the Australian people.

Mr Robinson:

– Hear, hear!


– I am interested to hear that interjection from my colleague in the Country Party arena. I wonder whether members of the Country Party are aware of the fact - if they are not, they should be - that only 10% of all the land in some sort of rural tenure in this country is under sown grass, improved pastures, crops or lying fallow. This leaves between 300 million acres and 400 million acres of land needing improvements as far as cropping and grasses are concerned. This is so despite the wonderful advantages which bodies such as the Commonwealth Scientific and Industrial Research Organisation have introduced. I refer to such developments as tropical legumes, Townsville lucerne in particular, and background research into the use of trace elements, fertilisers and so on.

A vast problem is before us. A vast challenge lies ahead. Our whole approach to the agricultural question is concerned. We need more of a shakeout. This has commenced in recent times with such things as this flood mitigation legislation and the reconstruction of the dairying subsidy. The field is a vast one. I have heard my colleagues talk about the tremendously expanding market for beef and the colossal market for grain sorghum. There is also the matter of fishing which will be debated in this session. There are tremendous possibilities in this regard. Vast arenas open up for anybody with imagination as to what can be done if we utilise our resources properly.

This proposition was proved even today. I read in a newspaper a report about a project being conducted at Tipperary, some 100 miles from Darwin. After 2 years those concerned in this project have pulled off the first crop of grain sorghum. By 1970 a crop of grain sorghum worth approximately $50m will be harvested. This return will come from an investment of approximately $20m. Here is the result of a combination of capital, imagination and science. All that was needed was application. On this occasion we had a look outside Australia for the imagination. Is this right? I believe that we have the imagination here in Australia. All that is needed is for us to apply this imagination. Here we are considering legislation concerning flood mitigation. But an even wider field of thought is required. We can do the job. I believe that the legislation which is put forward here tonight is the kind that we need.

Debate (on motion by Mr Charles Jones) adjourned.

House adjourned at 10.56 p.m.

page 541


The following answers to questions upon notice were circulated:

Papua and New Guinea (Question No. 12)

Mr Stewart:

asked the Minister for Exter nal Territories, upon notice:

What sums have been repatriated from the Territory of Papua and New Guinea to (a) Australia and (b) other countries in each of the last five years?

Mr Barnes:
Minister for External Territories · MCPHERSON, QUEENSLAND · CP

– The answer to the honourable member’s question is as follows:

As Papua and New Guinea is part of the Australian monetary system and as the trading and savings banks operating in the Territory are branches of Australian banks it is not possible to determine the sums that have been repatriated from Papua and New Guinea to Australia or to other countries without very complex statistical investigations. These investigations are under way but will not be completed for some time. The difficulties faced are much the same as would be involved in determining the sums repatriated from say Tasmania to other States and other countries.

Diplomatic Mail Bags (Question No. 23)

Mr Webb:

asked the Minister representing the Minister for Customs and Excise, upon notice:

Will he submit a statement on the misuse of diplomatic. bags to send private parcels duty free into Australia?

Mr Nixon:
Minister for the Interior · GIPPSLAND, VICTORIA · CP

– The answer to the honourable member’s question is as follows:

Random checks were made of the incoming Australian diplomatic bags on three occasions during November 1967, and some goods were found which should not have been in the bags.

Goods detained were either unsolicited gifts or had been sent throughthe bag without the knowledge or instigation of the recipients.

Under these circumstances it would be difficult to prosecute the recipients under the Customs Act.

The Customs Act has jurisdiction only in Australia. Hence there is no power to instigate proceedings under the Customs Act against the senders, as the offences were committed at places outside the jurisdiction of the Act.

The Department of Customs and Excise initiated the following action following the detention of the goods:

  1. issued Notices of Seizure for the goods;
  2. advised the Permanent Head of each Government Department concerned of details of private parcels forwarded by or to officers of his Department;
  3. requested the Permanent Heads to issue firm instructions to all overseas officers that this practice is to cease forthwith;
  4. sought the co-operation of the Permanent Heads in having all private parcels found in incoming Australian diplomatic bags forwarded to the Department of Customs and Excise.

The Departments of Customs and Excise and of External Affairs have co-operated closely throughout in regard to this matter, and new measures and procedures have been put into effect in Canberra and overseas to guard against misuse of diplomatic bags.

The action I have mentioned appears to have eliminated the practice, as no further parcels have been received since 18th December 1967.

It is intended that future random checks will be made and should any private parcels be detected, consideration will be given to taking disciplinary action against the senders under the Public Service Act.

Broadcasting and Television (Question No. 25)

Mr Webb:

asked the Postmaster-General, upon notice:

  1. Is it a fact that, because of elections and by-elections being held in other States of Australia, the Western Australian radio and television stations will be forbidden by law to make use of political matter on about six days of the current campaign?
  2. When the Broadcasting and Television Act was amended to provide for the restriction on broadcasting and later on in relation to television, was it visualised that the restriction would create the position now applying in Western Australia?
  3. Will he propose an amendment of the Act to provide that the restriction should apply only to Federal elections or by-elections, or, alternatively, that the restriction should apply separately to each State so that an election in one State would not interfere with an election in another State?
Mr Hulme:
Postmaster-General · PETRIE, QUEENSLAND · LP

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

  1. The writs in connection with the general election for the State of Western Australia were issued on 21st February 1968, and polling day was 23rd March 1968.

Within the period, the following elections were held: 24th February 1968:

By-election for the Federal Seat of Higgins (Victoria);

General election for the State of New South Wales; 2nd March 1968:

General election for the State of South Australia; 16th March 1968:

By-election for the State Seat of Landsborough, Queensland.

Pursuant to section 116 of the Broadcasting and Television Act the broadcasting or televising of election matter’ as defined in section 116(6.), by Western Australian stations was, therefore, prohibited during the following periods:

  1. From midnight on Wednesday, 21st February 1968, to 8.0 p.m. on Saturday, 24th February 1968.
  2. From midnight on Wednesday, 28th February 1968, to 8.0 p.m. on Saturday, 2nd March 1968.
  3. From midnight on Wednesday, 13th March 1968, to 8.0 p.m. on Saturday, 16th March 1968.

    1. I think it would be agreed that it is most unusual for five elections to be held within the space of one month and, for this reason, I doubt whether such a situation as has occurred in Western Australia would have been visualised when this provision was inserted into the Act.
    2. I have already given assurances to the Federation of Australian Commercial Broadcasters and the Federation of Australian Commercial Television Stations that the provisions of the Act in relation to this matter will be examined and all alternative courses of action considered.

Electoral (Question No.65)

Mr Hayden:

asked the Treasurer, upon notice:

  1. Will he supply total population figures for each Federal electoral division based on the 1966 census in similar form to information supplied by the then Minister for the Interior in answer to question No. 692 (Hansard, page 2964, of 12th November 1964)?
  2. For the purpose of evaluating the need for social services, can he state the proportion of the population in each division (a) under the age of eighteen and (b) over the age of sixty?
  3. For the purpose of evaluating the problems of migrants, can he state the proportion of the population in each division born (a) in Australia, (b) in the British Isles and (c) elsewhere?
Mr McMahon:

– The answer to the honourable member’s question is as follows:

The honourable member asked the same ques-. tion on 18th October 1967 and I supplied him with an answer on 9th November 1967. The answer appears in the Hansard of that date, pages 2858-9.

Telephone Services (Question No.85)

Mr Daly:

asked the Postmaster-General, upon notice:

How many applications for telephone services are outstanding in Marrickville, Newtown, Erskineville, Dulwich Hill, Lewisham, Summer Hill and Petersham?

Mr Hulme:

– The answer to the honourable member’s question is as follows:

The number of applications for telephone service which have been deferred pending major extensions of plant in each of the localities mentioned, as at 18th March are as follows:

Cite as: Australia, House of Representatives, Debates, 27 March 1968, viewed 22 October 2017, <>.