26th Parliament · 2nd Session
Mr SPEAKER (Hon. W. J. Aston) took the chair at 2.30 p.m., and read prayers.
– My question is directed to the Minister representing the Minister for Supply, ls it a fact that the Airframe Repair Workshops, operated by the Department of Supply at Parafield, in South Australia, are considering curtailing employment later this year, culminating in a complete shut down in May 1969? If so, has the Department any plans to absorb these employees in other activities? If not, what provisions are available to employees in regard to long service leave, superannuation and other benefits should they seek other jobs in the meantime?
– This is quite a technical and far reaching question which I would not care to answer without a discussion with my colleague in another place. I will consult him and obtain an answer for the honourable gentleman.
– My question is directed to the Minister for the Army. In the list of honours and awards for service in Vietnam published today there is reference to one brigadier, three colonels, eight other officers and two warrant officers. Is this a final list of awards for units about to be relieved? If so, are there no non-commissioned officers and other ranks worth mentioning? If there is to be a second list of awards including MIDs for NCOs and other ranks, would it not be advisable to publish one list in future in order to prevent any misunderstanding?
– lt is likely that there will be other awards. As the honourable gentleman is aware, this is a matter which concerns departments other than my own. I will check on the precise status of the question and let the honourable member have a considered reply in writing.
– My question is directed to the Minister for the Navy. Is it a fact that thirty boilermakers and a large number of other employees at Cockatoo Island were dismissed after the company concerned had launched, about 2 weeks ago, the last ship it had on the slips? Is it a fact that further dismissals will occur unless orders come from the Government for new vessels? Oan the Minister advise me whether it is the intention of his Department to construct further new vessels, thus ensuring that the existing highly skilled labour force at Cockatoo Island will be retained and that those who have been dismissed will be given the opportunity for new employment?
– It is a fact that 30 tradesmen had to be dismissed from Cockatoo Island Dockyard because of the lack of construction work taking place there. However, it seems that continuing work is available in refitting submarines, patrol boats and other vessels. I am not aware of any intention to dismiss considerable numbers of other nien. As for the future programme of construction in the yard, this is a matter that will have to await the Government’s defence review, which will take place in due course.
– The Treasurer will be aware that only 5% of retirement benefits paid as a lump sum are taxable. He will be aware also that in the case of annuities purchased by recipients of these lump sum benefits, that portion of the annuity deemed to represent portion of the original purchase price is not taxable. Will the right honourable gentleman consider an amendment of the law to ensure that beneficiaries of superannuation funds who are eligible for pension right only are not, by the burden of taxation imposed upon them, placed at a disadvantage compared wilh those who can and do receive retirement benefits by way of lump payments?
– I doubt whether you can compare lump sum payments invested in annuities with weekly or other regular payments under superannuation schemes. What the honourable gentleman has said is accurate so far as it relates to the taxation of lump sum payments and other payments from superannuation funds, but it must be remembered that a taxation concession is allowable both to the employee and the employer. Taxation concessions apply also with respect to the investment of funds by the superannuation fund. At the time of the next Budget I will consider the honourable member’s recommendations in order to ensure that no injustice occurs. If I find that anomalies exist I will do my best to see that the matter is raised during the Budget discussions.
– I ask the Minister for Air: Is the runway at Amberley air base being extended from 8,000 feet to 10,000 feet? If so, what is the reason for the extension? What will be the cost of the extension?
– In the past, several references have been made in the House to the probable requirement for a runway of 10,000 feet at Amberley. This project is on the works programme for this year. The runway will be extended to 10,000 feet. The extension will provide additional safety margins for training crews of the Fill aircraft in maximum all up operational weight take off and for the operation of arrester gear if required during normal training operations. I believe that the runway would have had to be extended ultimately whatever heavy bomber aircraft were operating from it. Extension of the runway is a normal requirement for such aircraft. 1 cannot give a precise figure for the cost of the extension but I think it is about $2m, including associated hard standings and other works.
– My question is addressed to the Minister for Trade and Industry. On 7th November, in reply to a question, he said that meetings would be held in New Zealand this week to consider the question of imports of peas and beans from New Zealand. Is he in a position to give any information on the result of these discussions?
– The meetings concluded in Wellington yesterday. The Australian delegation will not be back until tomorrow, but I can give the honourable gentleman the substantive answer to the question. Present at the meetings were representatives of the Australian and New Zealand Governments at official level, representatives of the growers of peas and beans of both countries and representatives of the processors of both countries. They were to discuss the problems which will arise or which are expected to arise from the expected surplus in production that will result from the 1968-69 crop. The meetings agreed - this is the substantial point - that there is likely to be a surplus, that it will pose a threat and that there should be close co-operation between the growers and processors on both sides of the Tasman Sea. The meetings agreed that orderly marketing of these products on both sides of the Tasman was highly desirable. On that basis it would be recommended to both Governments that a panel of processors, growers and government officials be established to watch carefully the developments of the marketing situation. A panel no doubt will be established. It is agreed that there should be a further meeting in February of the group which met in Wellington and further meetings periodically after that as they become necessary. When this group meets it will make recommendations to the Government for the purpose of avoiding or ameliorating any marketing problem that may develop. This Government will cooperate, and I do not have the slightest doubt that the New Zealand Government also will co-operate. This means that a useful start has been made towards reaching a permanent satisfactory working arrangement in relation to these products between the two countries.
– I ask the Minister for Air a question supplementary to that asked him by the Deputy Leader of the Opposition. Let me remind the honourable gentleman that on 17th September he stated in answer to a question:
The truth is that Amberley will be the home base of the Fill but the aircraft will be used in operational exercises from a number of strips without the expenditure of many millions of dollars. lt can be used now from Darwin, Tindal, Learmonth, Townsville or a number of strips - in fact, from any strip that is 8,000 feet or more in length.
I ask the honourable gentleman: If safety margins require that the Amberley strip be extended to 10,000 feet, can the Fill in fact carry out training exercises or operational exercises from Tindal, which I believe has a strip of 9,000 feet, from Townsville with 8,000 feet and from Learmonth with 7,000 feet, particularly as these bases do not have the sophisticated and costly ground installations of Amberley?
– The answer 1 gave on that occasion was perfectly correct. I was careful to explain in my answer today that the additional length of the strip at Amberley will be required when the aircraft is operating at maximum all-up operational weight. Under normal training conditions, an aircraft does not operate with a full bomb load, with all-up fuel weight and in other operational circumstances. When relatively unskilled pilots are being trained, an additional margin of safety is required. The aircraft can operate with all-up weight, full bomb load and full fuel requirements, under hot weather conditions, from a strip less than 8,000 feet in length. But it is desirable to have that additional margin of safety for maximum all-up Operational weight, particularly in training circumstances. We believe that the expenditure is good insurance.
– My question is directed to the Minister for Education and Science, ls the Minister aware of the decreasing opportunity for external study by students at universities in Victoria? ls this trend present in other Slates? As a matter of policy, does the Government believe that the opportunity for external study should be available to students who arc unable to attend a university full time?
– I know that there are a great many people in Australia, especially members of Education departments, who have a particular interest in the availability of external studies. In most States of the Commonwealth such opportunities are provided by the universities. Sometimes this provision is assisted specifically by arrangements made by State Education departments, lt is unfortunately true, however, that in Victoria the opportunities for external studies seem to be decreasing. The University of Melbourne has been conducting an external studies course, but I think it is only concluding that course for those people who began some time ago and that it will not take in new students. There could have been some misunderstanding about the Commonwealth’s attitude to this matter in the past, although there should not have been misunderstanding. Although the report of the Martin Committee on the Future of Tertiary Education in Australia recommended against the continuance of external studies and part time studies in Australian universities, I think Sir Robert Menzies said at the time that the Government did not accept that recommendation. The Australian Universities Commission has never accepted the recommendation. It is my hope that in its present round of discussions with the universities for the next triennium the Australian Universities Commission will bc able to assist with various proposals to extend where necessary the opportunities available for integrated external studies. Mr Speaker, in passing I would like to answer a question asked by the Leader of the Opposition. The University of Queensland is still taking external study student* from the Northern Territory. He will be supplied as soon as possible with an answer to a question that he put on notice.
– I address a question to the Minister for Health, ls the control of tuberculosis a Commonwealth responsibility? If so, what were the main reasons for accepting that responsibility? Is the germ which causes tuberculosis closely related in many respects to the germ which causes the dreaded disease of leprosy? Is it correct that the World Health Organisation favours a one-body central control of diseases such as tuberculosis and leprosy. Has the Commonwealth Government considered the wisdom or otherwise of accepting responsibility for the control of and eradication of leprosy in Australia? If so, what are its intentions in this regard?
– As … understand the position, the government of the day decided that the Commonwealth would enter the tuberculosis field in the massive way it did because tuberculosis was a highly infectious disease. Above all, it was the biggest cause of death of people in the 20 to 35 age group in Australia. Therefore, the decision was taken to launch a national campaign to attempt its eradication. That campaign has been highly successful, as the honourable gentleman is aware. The sort of considerations I have just mentioned can hardly be said to apply to leprosy.
The Commonwealth Government has considered that its activities in the treatment and control of leprosy should be confined to its Territories, particularly the Northern Territory, and to the work that it sponsors through the National Health and Medical Research Council. I will, however, be glad to look at the arguments submitted by the honourable gentleman and see whether there is any basis for approaching the problem of leprosy in the way that he suggests.
– I address a question to the Prime Minister. It concerns the proposed meeting of Commonwealth Prime Ministers in London next year. May I observe, by way of brief preface, that recent Commonwealth Prime Ministers’ Conferences would have given the impression that they have assumed something of the character of a mini-United Nations? 1 instance the insistence on meddling in the domestic affairs of member countries. 1 ask the right honourable gentleman: Has the Australian Government a settled policy on the procedure that should be observed at Commonwealth Prime Ministers’ Conferences, and can the right honourable gentleman
-Order! If the honourable member is asking for a statement of policy he is out of order.
– I am asking whether there is a settled policy.
-The honourable member may ask what is the intention of the Government.
– I defer to your ruling, Mr Speaker. To put the question more pointedly: Can the right honourable gentleman give an assurance that he will use his endeavours to see that the forms and procedures of the United Nations are not emulated at Prime Ministers’ Conferences?
– I am not entirely sure what the honourable member means by his use of the word ‘procedures’. I am not sure whether he means the settling of the agenda, or such matters as walking in, or the whole question of the carrying on of the conference. I think he is probably confining his question to whether at a meeting of Commonwealth Prime Ministers matters should or could be decided by a majority vote or a direction of some kind. The answer I would give the honourable member on that is that this has never been the case at meetings of Commonwealth Prime Ministers and in my view it should not be the case.
– My question is addressed to the Treasurer, who administers the provisions for Commonwealth employees’ compensation. Can the Treasurer justify the delays of sometimes more than 15 months before employees’ claims for compensation are determined? Is there any justification for delays of more than 6 months, especially in cases in which the departments concerned have admitted that the collection of relevant evidence has been completed? As injured employees cannot be expected to live on air, and as medical costs have to be met, wm the right honourable gentleman take action to ensure that delays in determining claims for compensation are reduced to a minimum? Finally, will he have a look at the case of J. Farley, an employee of the Department of Air, whose claim originated while he was serving in the Royal Australian Air Force and recurs from time to time?
– We do all we can to reduce the time that elapses between an application being submitted and the first payment being made to an employee. As the honourable gentleman would know, some time ago I gave an outline in this House of a new Bill to be presented which will not only introduce new principles but will also attend to certain administrative details in order to permit simplification of administration. I regret to say that although the Crown law officers have worked on this for some months it will be some months more before the Bill is ready for presentation to the House. As to the case of Mr Farley, the Royal Australian Air Force employee, I will have a look at that matter this afternoon and see whether I can give the honourable member a reply immediately.
– My question, which is addressed to the Minister for National Development, is supplementary to that asked by the honourable member for Perth last Thursday concerning the Ord River scheme. Has the Minister seen recent criticisms of the scheme which have stated that a suitable alternative crop to cotton in the Ord River area has not been found despite 20 years of research? Does the Minister believe that this is correct? Can he tell mc what work is being done at the Kimberley Research Station and also on the farms to try to prove economical alternatives to cotton?
– 1 have seen a number of articles criticising the Ord River scheme. Some of them seem to be based on the assumption that cotton, as a crop, is a failure on the Ord. This is not so. As 1 said in the House last week. I have been informed by the Commonwealth Scientific and Industrial Research Organisation that it sees no reason whatsoever to alter its previous judgment that high quality cotton can be grown in commercial quantities on the Ord River. In fact. 1 believe that the quality of the cotton this year is considerably better than it was last year. However, in addition to cotton, sorghum appears to be emerging as a crop which can be grown profitably in the Kimberley area. I understand that this year about 6,000 acres of sorghum are likely to be planted, some being on the Ord and some nearby on the Dunham River. In addition, a small quantity of the so-called miracle rice, which is known as IR8, has been received from the Philippines and has been grown up there. This year there should be some quantities available for planting out on the farms.
Furthermore, I believe it is likely that this year three of the farmers on the Ord will be associating beef production with their normal activity. The Commonwealth Government and the Western Australian Government are carrying out research at the Kimberley Research Station into a variety of crops and into the pests and soils of the area. Quite a lot of work is being undertaken. This is being stepped up and is currently under review to see that as far as possible crops that can be grown and sold profitably are looked at closely so as to assist the farmers to grow the most profitable crops in the area.
– I ask the Minister for the Navy a question supplementary to that asked by the honourable member for Kingsford-Smith. How is it, or why is it, that he told the House during the week before last that there was plenty of employment at the Cockatoo Island dockyard in Sydney? Thirty boilermakers and a greater number of other employees have recently been dismissed from that dockyard. As many of these people live in my district-
-Order! I suggest that the honourable member for West Sydney ask his question.
– Can the Minister say when these men are likely to be re-employed?
– J am afraid that 1 did not catch the beginning of the honourable member’s question. I cannot say when these people will be re-employed.
– My question, which is addressed to the Postmaster-General, is supplementary to a question I directed recently to the Prime Minister. I preface it by reminding him of the great concern of telephone subscribers about the upgrading of their telephone services and of the Prime Minister’s answer to the effect that the Postmaster-General’s Department had done a great deal of work on this problem and that it was now up to the Government to make a decision. I ask: Has the Government had an opportunity of discussing this issue? Has it reached any conclusions? When can we expect a decision?
– The Government has considered this matter and questions of substance have been determined, but there are a few matters of detail which require some further investigation. I hope that I will be able to make a statement at least before the Parliament rises at the end of this sessional period.
– I ask the Minister for Air: If the extensions at Amberley are required for training purposes what would have been the situation if the Fill aircraft had arrived in Australia in July, when it was scheduled to arrive, instead of June next year, when it is now stated it may arrive? Would it have been unsafe to have used Amberley for training purposes until the runway extensions were completed? When will the extensions be completed?
– The honourable gentleman does not have the dates quite correct. It was intended that delivery of the first Fill aircraft for Australia would be made in the United States of America some time in July, that delivery would be made progressively in America through to October and that the aircraft would finally arrive in Australia some time in November or December this year. This was the original programme. That programme has been delayed, of course, and there is now no definite date for delivery. But the original programme of flying training would have been carried out at Amberley without extension of the runway. I was careful to explain to the House that for the operation of these machines at maximum all up weight in hot weather conditions it would be desirable to have a safety margin added to the end of the runway and also to have arrestor gear installed. This would be an additional safety assurance. But flying training would have been carried out at Amberley had the Fi 1 1 aircraft arrived on time.
– My question is directed to the Treasurer. In view of the intense interest in the gold mining industry in Western Australia and the statement made last night by the honourable member for Kalgoorlie, who, when speaking on the Gold-Mining Industry Assistance Bill, said: . , the Treasurer was not so much interested or concerned-
-Order! The honourable gentleman will not be in order if he refers to a debate of the current session.
– 1 believe that the Treasurer has read the speech, anyway. 1 now ask whether what the honourable member for Kalgoorlie said is true.
– I have to make this confession: I have not read what the honourable member for Kalgoorlie said last night. Nonetheless I have gathered in very general terms the idea that he was attempting to present to the House. I can assure honourable members that in my recent trip overseas, in Germany, at the Commonwealth Finance Ministers Conference in London, and at the World Bank and International Monetary Fund meetings, I continued to stress that the very basis of the international monetary system as administered by the International Monetary Fund was gold. I did everything in my power to ensure that the position of gold as part of the international monetary system was sustained. I believe it is becoming increasingly recognised that once again we must look to the various components of the monetary system and that for many many years to come gold will retain its predominent position as part of that system.
– I desire to ask the
Treasurer a question. May I introduce my question by telling the right honourable gentleman that I took the advice he gave yesterday and read the speech which he made to the Australian-American Association and in which-
-Order! The honourable gentleman will ask his question. He is now giving information.
– My question is addressed to the Attorney-General. He will recall my asking yesterday about the High Court’s widening of the classes of persons who could be held responsible for giving advice without due care and his suggestion that it could be advisable for persons giving advice to disclaim responsibility for its acceptance. Does the Attorney-General agree-
– Ask your question.
– Does the AttorneyGeneral agree that this could become a tedious, exacting and at times embarrassing intrusion into normal business? Will he consider the necessity for the enactment of provisions whereby there could be no liability for damages unless a person seeking advice specifically requested it in a professional or quasi-professional context - that is. if the seeker after advice indicated that he intended to place specific value on the advice and if he asked for it in a manner that could give the adviser at least the opportunity of taking advantage-
-Order! The honourable member is now giving information. He will resume his seat. I call the honourable member for Dawson.
– Mr Speaker-
-Order! I have called the honourable member for Dawson.
– Is the Minister for Trade and Industry aware that the subsidy equivalent of the tariff each year on motor vehicles and on materials for construction is greater than the entire value of protection to all primary industries in Australia by direct subsidy or bounty or by protection on food or goods manufactured from primary products? As most of the major primary industries in Australia, particularly beef, wool, grains and even sugar, are highly efficient by world standards does not the Minister agree that the primary industries whose terms of trade are progressively deteriorating through rising internal costs, are entitled to significantly higher degrees of assistance, particularly as they will continue to be the backbone of the export economy of Australia for many years to come?
– 1 have to confess that I do not carry in my mind any figure that would represent what the honourable member describes as the ‘subsidy equivalent of the tariff on motor vehicles’. But I think, if I could say it without wishing to give offence, that it is a very silly question. There is a ground for protecting the motor car industry which gives the second greatest degree of employment in Australia, but how can the honourable member make any intelligent comparison between that and the absence of a protective duty on wool or wheat?
– I did not make that comparison.
– The honourable member asked me to compare the value of the duty on motor cars and to say whether it is equal to the duties imposed in defence of
Australian primary industry. Surely every Australian knows that there is no duty on wool which is our greatest primary industry.
– The Minister did not hear the question properly.
– I did hear the question properly, lt was a very silly question.
– I preface my question, which is addressed to the Minister for National Development, by reminding him of the congestion that is taking place on the Darwin wharves. It has even affected prawn trawlers. Can the Minister advise as to whether Maunsell Partners have issued an interim report and, if so, can he advise the House of the situation?
– Yes. Some months ago the Commonwealth, through my Department, did employ Maunsell Partners to look at the position of the wharves in the Northern Territory, particularly at Darwin, and to produce a report. I have received an interim report which is being closely studied by the Northern Division of my Department. We expect to get the final report in about a month’s time - just before the end of the year. This is a private report to my Department and through it to the Government, so it will not be released unless, after the Government has considered it, it decides that it will release it.
– My question is directed to the Minister for Primary Industry. Following his statement that a Formosan ship, the ‘Chin Hong Ming’, has been apprehended by the patrol boat of the Papua-New Guinea Division of the Royal Australian Navy, namely the HMAS ‘Lae’, will he endeavour to have this ship made a test case and to have the utmost penalties imposed on the ship and crew, in order to serve as notice to future intruders?
– It is true that the naval patrol vessel HMAS ‘Lae’ did arrest a Chinese Formosan fishing vessel off Madang this morning at about 2.30 a.m. I cannot prejudge the penalties that may be imposed if there is a conviction. The vessel has been arrested and is proceeding back to Madang, lt is expected to arrive there about 3.30 this afternoon. Action will then be taken by the Territory Administration to prosecute the vessel under the Commonwealth Fisheries Act. Penalties under the Act will depend on whether a summary conviction or a conviction on indictment is obtained. The penalty on summary conviction is a fine of not more than $ 1 ,000 or imprisonment for not more than 6 months or both. The penalty on conviction on indictment is a fine of not less than $1,000 or more than $10,000 or imprisonment for not more than 1 2 months or both. Whatever the result in this case, V certainly hope it will serve as an example to other foreign fishing vessels that might intrude within our 12-mile fishing zone.
– I address my question to the Minister for Education and Science. Has he noted recent reports which have suggested that the mining industry and State Departments of Mines are restricted in their search for new mineral deposits by a shortage of geologists? Will he ascertain whether ample vacancies for students in geology are available in the Australian universities? Can he say whether colleges of advanced education can contribute to the number of geologists available in the future?
– I am not sure whether the training of geologists would be an appropriate activity for colleges of advanced education, but I will certainly refer that question to the advisory committee. The problem of obtaining an adequate number of geologists to meet the increasing demands in Australia is not a simple one. I am advised that some companies seem to be able to recruit a large number of Australians; other companies, perhaps less soundly based and not able to guarantee a continuity of employment, may have more difficulty in obtaining the number of skilled geologists that they want. Overall an increasing number of geologists is being trained in Australian universities. It is interesting to note that the Universities of Sydney, New South Wales, New England, Newcastle, Macquarie, Queensland. Townsville, Adelaide, Western Australia and Tasmania and the Australian National University either have no quotas or quotas that arc not filled for students who wish to study geology. It is disappointing to note, especially in a State such as Western Australia, that this year the number of new enrolments for geology fell below, the number in previous years. This was not caused by any lack of resources within the university; it was caused by a lack of applicants. The honourable member has referred to a fairly complex problem and I am not quite sure what the ultimate solution may be. However, I do know that the Australian Universities Commission in its discussions with universities and industry has devote? a good deal of attention to it.
– I ask the AttorneyGeneral a question. What progress has he made with the Australian Capital Territory Companies Ordinance, which, as a result of the sale of shares in MLC Ltd, was foreshadowed by the Prime Minister on 22nd September and stated by him to be intended to be retrospective to 23rd September?
– We have reached the stage where a printed draft, which we think will be very close to the final version, is still being considered. I would not forecast the precise date of promulgation, but I would hope it would be in the near future. I mentioned earlier some of the difficulties relating to nominee shareholdings that we have experienced. We also have had an almost embarrassing number of precedents to consider. We had to consider the Canadian legislation, the Canadian and British Life Insurance Companies Act of 1965, which performs a similar function. We had to consider various English matters, such as the order in July 1 968, issued under the Banking Act, which governs foreign shareholdings sold on the stock exchange. We had references to the articles of a great number of English companies. For example, articles of the Cunard company does not permit a person not resident in the United Kingdom to be either a director, an officer or a shareholder, and does not allow a person who manages to become a shareholder to vote if he is a foreigner. We had these different approaches to these kinds of problems to consider, lt has been a longer exercise than 1 expected.
– My question is directed to the Treasurer. To what extent has Australia adopted the credit card system in order to replace money and the use of cheques? Are trading banks conducting extensive inquiries overseas to ascertain how they can become involved in this method of exchange? If this system were adopted more extensively, what conditions might be imposed by the Reserve Bank to control or at least to gain a knowledge of the extent of the activities of the trading banks?
– To the best of my knowledge the Reserve Bank has not yet received any request from the Commonwealth Trading Bank or the commercial trading banks for its guidance on the use of credit card facilities in Australia. The commercial trading banks have, to my knowledge, had discussions in the United Slates of America and Canada to see whether a credit card system on the lines that are so familiar in overseas countries could be used in Australia. As 1 said, I have not yet had any report on this matter, butI am sure that as soon as the Reserve Bank does receive any application - if it does receive one - it will attempt to establish the guide lines and will then consult the Governmenf.
(No. 2) 1968
Bill - by leave - presented by Mr Barnes, and read a first time.
– 1 move:
That the Bill be now read a second time.
Earlier this year the Papua and New Guinea Act was amended by this Parliament to make provision for the constitutional development of the Territory of Papua and New Guinea. This Bill proposes further changes in the Act, firstly, to make statutory provision for guarantees which the Government has given in relation to payments for superannuation and retirement benefits and the employment security scheme; and secondly, to bring the Act up to date with respect to appointments of overseas officers to the Territory Public Service and powers of delegation for the appointment of overseas and local officers. Until 1963 almost all officers of the Papua and New Guinea Public Service were recruited from Australia and were appointed as permanent officers. In 1963 permanent appointments of overseas officers were discontinued, and in 1964 the Public Service was reconstructed to provide a career service increasingly manned by Papuan and New Guinean officers. Since then only local officers have been appointed as permanent officers and overseas officers have been appointed only on a contract basis.
In order to dispel fears expressed by permanent overseas officers about the effect on them of constitutional or administrative changes in the Territory, the Government introduced the employment security scheme which has been established by an ordinance of the House of Assembly. The scheme applies to serving permanent overseas officers of the Territory Public Service and the Royal Papua and New Guinea Constabulary. The scheme provides an insurance against the possibility of an overseas officer’s career being terminated before normal retirement age through such constitutional or administrative changes. An overseas officer in these circumstances will be re-established in government employment elsewhere or if this is not possible he will receive cash payments and other benefits specified in the Territory legislation. The amendments now proposed to the Papua and New Guinea Act provide a Commonwealth guarantee in respect of such payments. Apart from these employment security arrangements it is also of major importance to permanent overseas officers that their superannuation benefits should be guaranteed. Similarly, it is of major importance to contract overseas officers that their retirement benefits should be guaranteed. The Government’s decision to make statutory provision for these guarantees follows representations by the officers concerned and the Government considers that these guarantees will contribute importantly to the morale and efficiency of overseas officers and the stability of the Public Service and the Constabulary.
Clause 5 of the Bill lists the ordinances which set out the benefits to which 1 have been referring. The proposed new section 30a in clause 4 incorporates the Commonwealth guarantee of payments that may accrue to overseas officers under these ordinances. Copies of the ordinances conferring the benefits which would be guaranteed have been placed in the Parliamentary Library together with an explanatory booklet on the employment security scheme. The guarantee applies to the ordinances listed in clause 5, including future amending ordinances. Such future amending ordinances will require the Governor-General’s assent.
The second part of these proposals arises from the reconstruction of the Public Service. As already explained, overseas officers were previously engaged on a permanent basis and the present section 30 provides for them to be appointed by the GovernorGeneral. Following the reconstruction of the Public Service in 1964 local officers have continued to be appointed under the Papua and New Guinea Act on a permanent basis. Contract officers recruited in Australia, however, are not covered by the present definition of officer in the Act and they have been appointed under Territory ordinance. The proposed new section 30 and the new definition of officer will enable overseas contract officers to be appointed under the Act just as overseas permanent officers used to be appointed under the Act. The proposed section 30 would also simplify the appointment procedure and would permit delegation of the power of appointment by vesting the authority for appointment of officers in the Minister rather than the Governor-General and by making the usual provision for delegation. It is proposed to establish a Public Service Board in the Territory and delegations to that Board will bc possible under these new provisions.
Those of the present proposals which deal with guarantees are designed to give confidence and reassurance to overseas officers. Australians serving in Papua and New Guinea in past years have created a fine tradition of dedicated service to the Territory and progress in the Territory is still heavily dependent on the services of Australians, whether permanent or contract officers. The five year development programme calls for the recruitment of an additional J, 450 overseas officers to provide the Territory with special skills needed to carry out the programme. The statutory guarantees proposed in this Bill are intended to recognise service in past years and to recognise the service overseas officers will be relied upon to give to the Territory in the future.
Debate (on motion by Mr Clyde Cameron) adjourned.
– I move:
The suspension of standing order 103 has become a traditional procedure at about this stage of the session. So far as I can remember, in all the years I have been here it has been at this time of the session that it has been suspended. So far as my research has been able to indicate, this is a tradition that extends back long beyond my entry into the House. This procedure has been followed by successive Leaders of the House. It is a necessary move to facilitate the business of the House. I do not propose that it will bc used to introduce legislation of a major character after 1 1 p.m. It will be used to introduce legislation of only relatively minor character or, alternatively, legislation about which there is no controversy. Mr Speaker, it is the intention of the Government that this standing order should be suspended.
– The Opposition opposes the suspension of standing order 103, which is commonly described as the I I o’clock rule. The Minister for Immigration (Mr Snedden) pointed out that research into the records had confirmed his opinion that it is a traditional move on the part of the Government at this period of the session to seek the suspension of this standing order. The Opposition does not accept this as a reason for its suspension. I want to take the opportunity on behalf of the Opposition to give some of the reasons why we believe it is unnecessary and indeed undesirable to suspend standing order 103. If it is suspended it will mean in effect that the Government will have the opportunity to introduce new legislation after 11 o’clock. If the Government is in a position to advise the Opposition of the legislation which it intends to introduce during the next fortnight, it is unnecessary for the Government to adopt this procedure.
I have made it perfectly clear on a number of occasions that the Opposition believes that the sitting days of the Parliament could be extended. It is common knowledge, of course, that the Government intends to finish this session at the end of this month, that is, on Thursday, 28th November. No doubt the House will adjourn in the early morning hours of Friday, 29th November. Surely there is no reason why the Parliament should go into recess at that time. The Parliament could continue in session until the end of December, if necessary. The Minister has offered no reason why the Parliament should not continue to sit after 28th November, approximately a fortnight from now. Anyone who has had the opportunity to study the notice paper, as I am sure all honourable members have, will see that there are now listed forty-two Bills - in point of fact, forty-three, if one includes the Bill that the Minister for External Territories (Mr Barnes) has just introduced.
Does the Minister want to suspend the 1 1 o’clock rule so that the House will have the opportunity between now and the end of November to deal with forty-three Bills, plus the additional Bills that the Minister has indicated could be introduced? If so, the Opposition regards it as a most unsatisfactory situation. In the absence of a much stronger reason than has been advanced on this occasion by the Minister, the Opposition believes that standing order 103 should not be suspended. I have already indicated the alternatives that the House could adopt. 1 think they are quite reasonable. The House sits on 3 days each week - Tuesday afternoon and night, Wednesday afternoon and night, and most of Thursday. I have indicated on a number of occasions that if the Government believes that it is impossible to get through the amount of business on the notice paper before the target date set by the Government for the House to go into recess, either a Monday or a Friday should be included as a sitting day.
Irrespective of whether the Minister contends that it is traditional at this stage of the sitting to suspend the 1 1 o’clock rule, I believe that, if there is business before the House which requires mature consideration not only by the Government but also the Opposition, honourable members should be given the opportunity to consider that legislation. I am sure that the Minister appreciates that some of the Bills now on the notice paper will require lengthy debate, particularly on the part of the Opposition. The Minister may shake his head, but the fact remains that the Opposition has yet to determine its attitude to some of these matters. Although it may be the Government’s attitude that some of the Bills do not require lengthy debate, this is not necessarily the Opposition’s attitude. In view of the fact that the House will be expected to debate more than forty-three bills in the next fortnight, the Opposition believes that rather than suspend standing order 103 the Government should take the opportunity to extend the days of sitting to include Mondays or Fridays. In any case, there is no necessity for the Parliament to adjourn at the end of this month.
– The Deputy Leader of the Opposition has had a letter from me stating that the Government will continue the sittings until the business is concluded.
– The Opposition accepts that proposition. Surely there is no necessity to suspend standing order 103 if the Minister has in mind that the House will continue to sit until the business has been concluded. Why should the House not continue into December to deal with the legislation before it if this is necessary? The Minister has already referred to precedent and to what is traditional in this Parliament, but the fact remains that the Parliament has sat into December on previous occasions. If the Minister takes the opportunity to study Hansard he will find that there have been frequent occasions when the Parliament has continued to sit well into December. I remind the Minister that when he moved a similar motion at this time last year there was the certainty of a Senate election. One can understand the attitude of the Minister on that occasion. But even then the Opposition pointed out that the fact that there was to be a Senate election at the end of the year was no reason for the Parliament not to resume after the Senate election had been held. No election is to be held this year. There is no reason why the Parliament should not continue to sit until December or, as I have already pointed out, to extend the days of sitting in each week.
The Opposition believes it is almost impossible for honourable members to be able to give mature consideration lo the legislation before the House under the circumstances that the Minister now proposes. All honourable members are fully aware of the situation that will develop during the next 2 weeks. We will be considering legislation in the early hours of the morning. Frequent reference has been made in this Parliament to the process of legislation by exhaustion that is so often followed. The Opposition completely opposes the Government’s attitude in this respect. On earlier occasions the Minister has given as a reason for the build up of legislation the excuse that the Parliamentary draftsmen are unable to prepare the Bills until near the end of a session but the fact remains that when it is necessary to introduce emergency legislation the Government can always do so. An example of this is the legislation which was introduced into this Parliament yesterday to amend a serious omission of the Government and previous governments over a very long period. The Opposition in this House and in another place co-operated with the Government and that legislation passed through both Houses. The Bill was obviously prepared over the weekend or early yesterday. Surely in those circumstances the Government cannot successfully argue that the difficulties lie with the drafting of legislation. Therefore, as 1 have already indicated to the House, the Opposition opposes the suspension of standing order 103. Until the Minister is in a position to give a much more reasonable explanation that he has given on this occasion, the Opposition is bound to oppose such a proposition.
– T do not agree with the remarks of the Deputy Leader of the Opposition (Mr Barnard) in regard to the suspension of standing order 103, but 1 would like to take this opportunity to make a most vehement protest about the House sitting at all after 11 p.m. 1 took this matter up fairly strongly at the beginning of the session and a discussion was held amongst many people on this side of the House. 1 then wrote to the Prime Minister (Mr Gorton) and outlined our views on the subject. I also discussed this matter at great length with quite a number of honourable members opposite and they thoroughly agreed with me. It was even suggested by some of the officers of the House that we should not sit beyond 10.30 p.m. We always have this last minute rush. 1 cannot see any reason why the Ministers responsible for the introduction of legislation cannot do it in an orderly fashion.
My protest is that the House should not be silting at all after 1 1 p.m. If the Senate can have a rule that the adjournment shall be moved at 10.30 p.m. 1 see no reason why this House should not have the same rule. I do noi mean that the House should necessarily adjourn at that hour every night. There will be occasions when it will be necessary to sit on to finish some business. At present there are 43 Bills on the notice paper and there is a possibility that more legislation will be introduced. There are also numerous Ministerial statements on the notice paper. 1 would like to speak on one or two of these matters myself, but I do not think that I will be allowed to do so. lt appears that the Ministers want to go into recess and that they do not regard the back bench as being of any use to them. All they want to do is to shove a whole lot of Bills through the Parliament. I emphatically believe that the House should not sit after 1 1 p.m and that if it is necessary to sit into December to complete our business the House should do so.
– The Leader of the House (Mr Snedden) has been more than usually perfunctory in moving this motion. His sole justification is that it is traditional. He has given no reasons at all why the Government finds it necessary to deter the House from debating Government business or to prevent it from debating general business which private members on both sides can bring up and in fact do bring up. He offered one inducement - that there would be no major legislation introduced after 1 1 p.m. For this relief, much thanks. The suspension of this rule is necessary only to permit debate on a matter to commence after 1 1 p.m. This month and last month the House has sat on 13 nights. Only once did it rise before 1 1 p.m., and then it rose at 10.58. On 4 of the 13 nights it rose after midnight; on one occasion it rose at 2.30 a.m. lt is fruitless to expect any meaningful debate after 11 p.m. What else can members do around the House after 1 1 p.m.?
Except for Ministers, Whips and Opposition leaders there are no typists or other staff available for members after 5 p.m. For half the sitting hours members can do nothing but read in the Library or sit in the House or enjoy some of the amenities around the building. The fact is that this motion is proposed only to permit debates on various matters to be commenced after 11 p.m. What matters are pending? The Minister did not even have the grace to mention any business which the Government would bc bringing in, other than what was already on the notice paper. This includes forty-two Bills of the Government and, incidentally, a couple of private members’ Bills, both in my name, one at least of which, the Death Penalty Abolition Bill, a great number of Government supporters would like to have debated.
– The Opposition refused a vote on that.
– We have sought a vote again and again and again, as the Minister knows quite well.
– You refuse a free vote.
– The Government will not allow a free vote among its supporters. This is a matter of Party policy on our side of the House. We do not stand for Parliament proclaiming a policy and then say: “We will not try to carry out that policy’. As the Minister knows, this matter has been on the notice paper for more than 6 months.
Let us look at Government business, because the Minister does not give any reason other than the convenience of the Government. He simply says that the Government intends that the House shall suspend the 11 o’clock rule. There will not be a free vote on this. Every member on the Government side will vote to permit business to be introduced for debate for the first time after 11 p.m. One might have understood the Minister adopting this procedure if there had been any very great obstruction in the House. Yesterday’s proceedings should convince any fair minded person that when a matter of urgency arises all members of the House, not least those on this side, will co-operate to ensure that the laws are made proof against abuse. Yesterday we saw a Bill go through both chambers in one afternoon. Again, a Bill has just been brought in and the Minister has introduced it by leave and had it read a first and a second time. He did not give notice. He simply sought leave, and leave was given. It is very difficult indeed to recall any examples of obstruction during this session. Nine Bills have been brought in during the last week and all will be supported by my Party. It is not as though there were any very contentious legislation that the Government has pending.
Let me also remind the House that it is not only legislation that should be debated. Members of the Government also make ministerial statements. We now find it impossible to have a debate on a ministerial statement unless we initiate that debate immediately after the statement is given. Once a ministerial statement has been delivered and debate adjourned, the debate is never revived. I shall mention two particular cases in which an undertaking was sought, when the adjournment was moved, that there would be a debate on the matter later. One such case involved the statement of the Prime Minister (Mr Gorton) on the report of the Tariff Board, which had been the subject of an exceptional amount of speculation. The honourable member for Yarra (Dr J. F. Cairns), very reasonably sought the adjournment of the debate in order that we might study the Board’s report and the Prime Minister’s statement. He sought an assurance from the Prime Minister that we would have an early opportunity to debate the matter. The Prime Minister replied:
The only answer 1 can give is to say thai I shall not deliberately hold up the debate.
That was on 9th October. The debate has not been revived. Is there any matter which is of such importance to exporters, to investors, to employers, or to manufacturers as the crucial question of the tariff? Are we to debate this after 11 p.m.? Are we to debate it at all this year?
The very next day the Prime Minister made another statement on Australian crude oil use and price. The honourable member for Cunningham (Mr Connor) sought an assurance, when moving the adjournment, that a debate on the matter would take place this session. The debate has not taken place. Are we to be given an assurance that it will?
I give one concluding example of these ministerial statements - one which is particularly relevant in view of a resolution passed unanimously by the South Australian House of Assembly this morning. On the motion of the South Australian Premier the House of Assembly resolved as follows:
This House considers that South Australia has a fundamental and legal right to the construction of the Chowilla Dam without further delay and calls upon all South Australian members of the Commonwealth Parliament to give the utmost support to this request.
– Was that supported by members on both sides?
– Unquestionably. The South Australian members acted bipartisanly and have expressed a wish, implicitly, that members of this House will do likewise as we did on this matter in 1963. There was a ministerial statement on this subject on 4th June.I expect that this is a matter on which South Australian members of the Liberal Party might appreciate an opportunity of supporting their colleagues in the State Parliament or showing where their State colleagues were wrong. I can assure the House that members on this side would welcome the revival of the debate on the ministerial statement.
These are not the only ministerial statements on the notice paper awaiting debate. There are more than two dozen. I have mentioned only three. They are obviously statements which have been regarded as important or which have certainly become important. In these circumstances it appears quite wrong that the Leader of the House should seek permission to initiate debates after 11 p.m. and, being concerned only with Government business, should make no reference to prospective Bills or to the protracted character of pending Bills or the fate of ministerial statements. I need not mention in any detail the matters of general business but there are on the notice paper matters of general business introduced by both sides of the House. Those which have been initiated from my side have been adjourned and the continuation of their debate will be in the hands of members on the Government side. I would expect that the members of the Government parties who sought the adjournment of the debate on private members’ business introduced by Labor Party members did not do so merely to shelve those matters. I should have expected that they would be prepared to debate them and to vote on them.
The Opposition will vote against the proposal that matters be initiated after 1 1 p.m. No cause for such action has been shown by the Leader of the House, andI believe that if on this occasion he were to permit a free vote the motion would not be carried and the Government’s intention, as he so gently put it, would miscarry.
– The points raised by the Leader of the Opposition (Mr Whitlam) in regard to a free vote seem to me to be ill cast when one reflects on the fact that, for the most part, his Party sits on the other side as regimented as a collection of battery hens. Indeed, I am not too sure on occasions whether the honourable gentleman is crowing. The berating of the Government which has gone on this afternoon from honourable gentlemen opposite is of the same character as that which has gone on in this House for over 30 years.
– I am speaking of recent experience and recent recall; I am not, as is the honourable member for Mallee (Mr Turnbull). going back into the distant past. Surely it is high time that we stopped tinkering with this problem of sitting hours. I tell the Leader of the House, my honourable friend the Minister for Immigration (Mr Snedden), that 1 support the motion, but I would be less than frank if I did not tell him that I do so with a considerable amount of reluctance.
– You have to.
– I believe in being polite and I commend politeness to the honourable member for Wills. Perhaps we could then make something of him. I am simply saying that the Government is in a position where it wants legislation introduced, and I accept the assurance of the Leader of the House that the H o’clock rule will not bc abused. However [ put this to my honourable friend and to ill: Government: lt is not only the members of this House who must be considered - some of them are getting on a little in years, and I have an infinite respect for age - but there are the members of the staff who serve this Parliament and the persons outside who serve it whose interests also must be considered. I find trying to concentrate late- at’ night a little difficult. This may be a sign of old age on my part. May 1 say. again speaking with a sense of frankness, that 1. find it a little difficult to present any form of charm in the direction of the honourable member for Hindmarsh (Mr Clyde Cameron) at 2 o’clock in the morning, and that goes with greater strength for the honourable member for Wills (Mr Bryant).
I suggest in all seriousness that there is a substantial area of agreement on both sides of the House that there should be a revolutionary approach to the sitting hours and sitting days of the Parliament. Under Sir Robert Menzies - again I speak with frankness - I found I had but limited influence. He showed what I would describe as a singular reluctance to accept any suggestions T made to him concerning the sittings of the House. But I am not gripped by that sense of apprehension now, and I hope that what I say will fall on fertile ears.
I suggest that there could be a small meeting of private members, with the Deputy Leader of the Opposition (Mr Barnard) and the Leader of the House. I am quite sure that some compromise and some sensible arrangements could be made concerning sitting hours. I think of those honourable members who live in Western Australia and the honourable members for Leichhardt (Mr Fulton), Kennedy (Mr Katter) and Herbert (Mr Bonnett) from Queensland who travel home to their electorates every week-end. This is a form of craziness, and it is high time it was arrested. I suggest that we should sit for 5 days in one week and for 4 days in the next week, or for two 4-day weeks straight. If this were done travelling time literally could be slashed in half and I believe we would find more even tempered members in the Parliament conducting the business of the nation.
Speaking again for myself, I find it virtually impossible at a late hour of the night to consider things objectively. Tempers become frayed. Quite beyond any consideration of our own circumstances, 1 hope that the Government will heed, most urgently, the circumstances in which members of the staff of this Parliament find themselves when we sit until 2 or 3 o’clock in the morning because they, in turn, have another hour’s work to complete before they can go to bed.
– 1, too. protest against the motion. The trouble with this”’ Parliament - it has been a trouble from which we have suffered for a long time now - is that members of the Cabinet regard the Parliament as being a humbug, a nuisance, and something that interferes wilh their work. They regard the Parliament as a place that they must visit occasionally during the day in order to take part in divisions. They have to come here occasionally to listen to what somebody has to say about their own departments. It is necessary for them to come here occasionally to give us the benefit of their great wisdom on particular matters that weare discussing.
The Executive of this country is carrying on like a gang of Indian rajahs, to put it bluntly. Its members regard themselves as a kind of eastern potentates who ought not to be bothered with lesser fry than themselves. They are surrounded by a retinue of servants who do their work for them. In most cases the servants do their writing for them; it is as well that they have learned to read, otherwise they would not have the benefit of the writing which their highly trained public servants do for them. Why must we sit here at the ungodly hours that we do sit? Is it any wonder that the Executive is able to get away with the kind of things it has been getting away with? Time and time again Bills have been introduced into this Parliament that subsequently have been found to contain obvious drafting errors.
– Too many lawyers have been handling them.
– I agree that there are too many lawyers here, but there are some good lawyers on the back benches of this Parliament - some excellent lawyers.
– There is the honourable member for Warringah (Mr St John), who was at one lime an acting judge of the Supreme Court of New South Wales. No honourable member will tell me that he is not a good lawyer. Then there is the honourable member for Moreton (Mr Killen) who is budding, certainly as a good criminal lawyer. I would regard him as someone who would have a tremendous effect upon a jury, even if he has no effect upon the Cabinet.
-Order! I think that the honourable gentleman is getting a little far away from the motion.
– I am sorry, Mr Speaker. This nation of 12 million people is not being governed by a national parliament of people elected by the people to legislate for the people. This nation is being governed by an oligarchy of twelve Cabinet Ministers - or twelve Indian rajahs as I prefer to call them. I must admit that the Minister for Defence (Mr Fairhall), who it sitting in the chamber, does not look much like an Indian rajah, although he behaves like one. As I was saying - 1 want to say it again because eventually it might penetrate the thick outer covering of the brain and its wisdom might be seen - the Minister for Immigration made great play of the fact that this has been a traditional procedure. It has been a tradition. I agree that it has been a bad tradition and that it is one that ought to end. The Minister said that he has been able to go back over the records and make an examination of what has happened for goodness knows how many years. He found that the same thing as is happening now was happening in earlier times. He considered that therefore it is a good practice. I have no doubt that the honourable gentleman could take me to Roe Street, in Perth, and show me places where certain things have been happening for a long time. But this is no reason why those things should continue.
– After 1 1 p.m.
– After 11 p.m., at that. If the Minister wants to prostitute the Parliament of this country, that is one thing; but he should not try to get us to agree to that course. Where rape is inevitable, let him not expect us to relax and enjoy it. I am not prepared to do so. I want to protest about this as vigorously as I possibly can. Why can we not stay here and remain on the job for as many weeks as are necessary to enable us to finish our business in sensible hours while our brains are able to function properly and while we are fit to examine in minute detail the complicated legislation that is thrown at us? Not all Ministers act as the Minister for Immigration did last night. He gave us warning of a measure which will be brought before the Parliament in 2 or 3 months time. If Ministers did this more often, the Parliament would function a lot better. I can- recall only one other Minister who has acted in the way the Minister for Immigration acted last night to ensure that members of the Parliament would have an adequate opportunity to study measures that they were to be called on to discuss and that the people would not be adversely affected by laws rushed through this Parliament without any opportunity for the community to know how those laws would affect the individual. I refer to the present Chief Justice of the High Court. Sir Garfield Barwick. He also adopted this procedure on controversial measures. He never brought in a Bill and slammed it at us, expecting it to be passed in a few minutes and adopting the attitude: Take it or leave it’. We have to put an end to this type of thing. 1 remember that some time ago the Minister for Social Services (Mr Wentworth) put up a proposal that we ought to sit through Tuesday, Wednesday, Thursday and Friday of one week followed by sittings on Monday, Tuesday, Wednesday, Thursday and Friday of the following week, and then have 1 week without the Parliament meeting.
– He proposed no Friday meeting in the second week.
– is that so? All right, Friday was not included in the second week. The same procedure was then to be followed for the next 2 weeks. This would have given us 16 sitting days in 5 weeks, as against 12 sitting days as at present. Therefore, we would have an extra 4 sitting days under such a programme. Every 5 weeks we would be able to have a great deal more time to study various matters. Can honourable members tell me why we cannot start at 9.30 a.m. and finish an hour earlier at night? The reason why we cannot start at half-past nine at the moment is that we sit so late at night that none of us is fit enough to start at that time. But if we could take an hour off the night sittings we could come back next morning and meet at a proper time.
It is perfectly true, as someone has said, that the staff ought to be considered. But Ministers carry on in this place as though everyone else gets it as easy as they do. When I say that I do not mean to say that all Ministers are lazy. Indeed. 1 will not say that any of them are lazy. But Ministers receive a lot more help to do their work than anyone else in the Parliament, including the staff, receives to do his work, and this is something that ought to be remembered. As the Leader of the Opposition (Mr Whitlam) has pointed out. we on this side of the Parlaiment do not have any staff at all for typing purposes after 5 p.m. This position applies also to backbenchers of the Liberal Party and the Country Party. How much longer are we to tolerate this? How much longer are we to let the twelve rajahs who call themselves Cabinet Ministers run this country and treat us as nuisances and humbugs who should not bo here? They tolerate us only because the Constitution says they have to put up with us.
– I think I would bc quite right in saying that the honourable member for Hindmarsh (Mr Clyde Cameron) should be on stage at the Tivoli. 1 am not sure whether the honourable member for Moreton (Mr Killen) would not make a good team with him sometimes; the two of them would go well. For full measure, the Leader of the Opposition (Mr Whitlam) could join them to make a trio. I intend to speak for 3 minutes. 1 shall not extend, as one does with a telephone call. In this discussion we are wasting time on many things that have nothing to do with the motion.
The honourable member for Hindmarsh has taken this opportunity of attacking the Government from all quarters, though it is a motion with very definite meaning that is being debated. The honourable member for Moreton spoke about what has happened in the past. But I have been here longer than the honourable member and I too can look back into the past. If the honourable member, who has been described as a budding solicitor or lawyer, looks back in Hansard 30, 40, 50 or 60 years he will see what happened in the short time the Australian Labor Party was in office. I have said this before, and I say it again: When I came here first 1 had my best opportunity to speak between 4 and 6 o’clock in the morning. At that time those of us who stayed at the Hotel Kurrajong have returned there as the bell rang for breakfast. We notice that in this debate very few members who were in the Parliament in those days have risen to say what they really think. Now why does the honourable member for Wilmot (Mr Duthie), for example, not get up and take part in this discussion? 1 have one request to make, and I think it is a fair one. I do not think that members of this House mind sitting after 11 p.m. But I object to sittings lasting to 2, 3 and 4 o’clock in the morning. I put it to the Leader of the House (Mr Snedden) when I last spoke in a similar debate, and I now put it again, that it would be a fair proposition for the House to sit to 12.30 a.m. But it has been argued, particularly by the Deputy Leader of the Opposition (Mr Barnard), that we should sit right through to the end of December. That sort of thing is not clone in a civilised country. After all, there is such a thing as Christmas. If the honourable member wants to change the procedure so that we cannot celebrate Christmas, he docs not get my support. If the Minister can assure mc that the House will not sit to excessively late hours, the motion will have my support.
Motion (by Mr Erwin) agreed to:
That the question bc now put.
That the standing order 103 (11 o’clock ru:) be suspended until the end of the year.
The House divided. (Mr Speaker - Hon. W. J. Aston)
Question so resolved in the affirmative.
Debate resumed from 9 October (vide page 1759). on motion by Mr Freeth:
Thai the Bill be now read a second time.
– Mr Speaker, the Opposition has carefully considered this Bill. We disagreed with three parts of it. We: disagree with that part which seeks to repeal section 54 of the Commonwealth Banks Act. lt is a small section so I will read it in order that the record will indicate the view which the Opposition is taking. It reads:
Bills of exchange (including cheques) drawn on the Savings Bank, and receipts dr orders given lo the Savings Bank in relation to1 any money withdrawn from the Savings Bank, –are nol liable to stamp duly or other tax under any law of the Commonwealth or of a State or. Territory of the Commonwealth.
We oppose the repeal of section 54 of the Act because we understand, that the effect of this alteration will be to allow State governments the right to impose stamp duty upon society accounts established with the Commonwealth Savings Bank. At the present time a trade union, friendly society, church fund or any charitable organisation has the right to establish a cheque account with the Commonwealth. Savings Bank. They receive interest upon, whatever credit they have in the account. Under the law as it now stands, it is not permissible for any State Government to alter the position which prohibits the imposition of duty upon cheques drawn by these society accounts. The reason given for the present proposal by the Minister for Air and the Minister assisting the Treasurer (Mr Freeth) is that the present situation gives to the Commonwealth Trading Bank an unfair advantage over - I suppose one must assume he means - private savings banks which transact this kind of business.
– Should not it have an advantage?
– I believe that the Commonwealth Trading Bank should not always be made to fall into line with private banks. 1 can’ ‘ remember that when I first came to this Parliament - shortly after the Menzies Government altered the Commonwealth Banks Act so as to place the Commonwealth Bank more under the direction of the Treasurer - the Commonwealth Trading Bank was forced to follow private trading banks in charging an annual fee for keeping cheque accounts. Until then, the Commonwealth Trading Bank had made no annual charge for keeping cheque accounts, provided that the account was in credit throughout the year. But then the Commonwealth Trading Bank was forced to introduce a charge of 10s a year, and shortly after this was done, the private trading banks increased the charge to £1 a year and the Commonwealth Trading Bank was obliged, by ministerial direction, to follow suit.
There never would have been the overdraft charges which are now imposed upon customers of the Commonwealth Trading Bank except for the fact that the Government told the Bank that it was the intention of the private banks to impose this charge and that the Bank would have to do the same. I believe, too, that customers of the private trading banks would never have had to pay the transaction charges which they now have to pay, depending upon the number of cheques drawn or paid into their accounts, but for the fact that the private trading banks knew that they could impose these charges with impunity because they could count on the Government’s issuing a ministerial direction to the Commonwealth Trading Bank to force it to do the same kind of thing. If we want healthy competition, let us have it. For goodness sake do not allow alterations to the law which will permit State governments to impose stamp duty upon friendly and charitable societies.
The next opposition which we offer to the Bill relates to clause 1 2 of the Bill which proposes to lay down certain conditions under which an officer of the Commonwealth Banking Corporation may be reprimanded or dismissed. The clause repeals section 107 and inserts a new section 107.
Sub-section (10.) of the proposed new section defines misconduct. It states:
For the purposes of this section an officer shall be ta);en to have been guilty of miscondict if, and only if -
he has wilfully disobeyed or disregarded an order applicable to him as an officer and given by a person having authority to give the order;
We do not disagree with that provision -
We agree with that provision.
I pause to say that it is doubtful whether, under the law as it now stands, the Commonwealth Banking Corporation has power to deal with people who are negligent or careless. What do ‘negligence’ and ‘carelessness’ mean? How do we define these terms? They are fairly vague and indefinite. Unless a charge of negligence or carelessness can be proved in a clear and unambiguous way, it may be difficult to make the charge stick. The law has now been altered to give the Corporation the right to discharge or discipline a person who is guilty of negligence or carelessness. The Corporation can now act upon this provision and even though it is ambiguous we do not offer any objection to it. The Corporation must have some protection against negligence or carelessness. It should not be required to relegate an officer who has been negligent or careless to a back room and still pay him simply because it does not have any clear power to deal with him.
The proposed new sub-section continues:
That is much the same as the previous paragraph. It goes on:
No-one would object to that. A similar provision is contained in the Public Service Act and, except in one respect, this paragraph is almost borrowed from that Act. I will deal with that aspect later. But then we come to the part with which the Opposition disagrees. It is:
It is all very well for the Corporation to have the power to dismiss a person for disgraceful or improper conduct as an officer, or while carrying out transactions outside the Bank with customers of the Bank, or while performing work associated with the Bank’s activities. No-one would disagree with such a provision, but again at first blush this provision appears to have been lifted from section 55 of the Public Service Act. The Government may justify the inclusion of the provision in the Bill in that way.
But how can we justify a provision which, if stretched beyond the point to which the Government intends it to apply, could be used capriciously to discipline an officer who may get drunk on a Saturday night at a local club? Most of us have been merry at some time or other. Some of us have reformed and do not touch alcohol now. The honourable member for KingsfordSmith (Mi Curtin) will not mind my saying that he is a person who does not touch it at all now. I know that another honourable member who is a friend of mine has also reformed in this way. However, many of us are still able to partake of liquor at parties and still get a little inebriated, but our conduct does not reach the point of disgracefulness. Who decides whether a person who is merry is behaving disgracefully? Such a decision may depend upon the popularity of the officer. If the person making the decision does not like the officer, any form of intoxication could become an act of impropriety, misconduct or disgracefulness. What is the position of an officer who becomes involved in fisticuffs at the local pub over a matter that has nothing whatever to do with the Bank? He may be involved in a personal argument. He could be reported to a senior officer of the Corporation. Whether he won the fight would not matter; he could - I emphasise ‘could’ - be treated as a person who has acted improperly and is guilty of misconduct.
– It could even be the manager.
– I know that the honourable member’s suspicions would rest more heavily on the manager than on the bank teller. An officer could become involved in an illicit love affair not in any way associated with any customer or the wife of any customer of the Bank. Believe it or not, all of us in a weak moment can be carried away and be guilty of these little indiscretions. I remember an occassion when someone took objection to dealing with de facto wives and similar people. He asked the chairman of the meeting: ‘Do you think that anybody who has committed adultery should be allowed to vote?’ The chairman replied: ‘If we applied such a rule we would not get a quorum.’ Let us not be pretentious. Let us be honest and admit that these things can happen to the best of us. A person may be demonstrating against the war in Vietnam. He may be arrested in Martin Place, thrown into a police van and charged with disorderly conduct. The Corporation could then say: ‘You are not fit to be an officer. You should not have been demonstrating or if you were demonstrating you should not have allowed yourself to be hit on the head and arrested.
But you have been arrested and we will not allow you to continue to be an officer of the Bank.’ A man who did no more than demonstrate in support of his political beliefs could, as a result of an unfortunate arrest, be considered unfit to continue his employment as a bank officer.
I do not say that there ought not to be some control of an officer outside his working hours or away from .the Bank. Some controls are absolutely necessary. In the Committee stage we will move that there be added to the Bill an additional stipulation relating to an officer who has been guilty of stealing, misappropriation, breach of trust or any other form of dishonesty, whether as an officer or otherwise. We will seek to have the application of paragraph (e) limited to an officer who has been guilty of disgraceful or improper conduct as an officer and only as an officer. An officer of the Bank should not be allowed, publicly or even privately, to cast, improper reflections upon another officer. A bank could not function if its officers were free to cast aspersions on the honesty pf other officers. But this is only a civil offence. It is the offence of slander if the aspersion is spoken and libel if it is written. I would not say that an officer had the right publicly to assault or insult a senior officer of the Corporation. Such conduct could not be tolerated. I do not believe that an officer should misbehave himself with a customer by, say, the misuse of his prowess as a lover to obtain improperly from . a customer a power of attorney to operate on her bank account. I read only recently that a bank officer in Melbourne had been carrying on an .illicit love affair with a customer and had taken $64,000 from her. That is a pretty well paid exercise.
– He is 62 years of age.
– I note that the Minister has a greater interest in this than I have. Whether he has designs one way or the other only he’ Would know. If a bank officer gets into debt with a money lender, if he is involved in heavy hire purchase commitments and finds himself in a position where his goods are being repossessed, or if he passes a dishonoured cheque, although these things did not happen during working hours or were not directly connected in any way with his banking work, how could the bank be expected to retain his services? If he is known to be a man who has become involved with a money lender, who has become indebted far beyond his means and is unable to meet his commitments, surely a bank would be entitled to assume that he may start to tickle the peter. This is something which a bank has every right to protect itself against.
I shall deal now with the difference between clause 12 of the Bill insofar as it relates to misconduct and section 55 of the Public Service Act, which was referred to by the Minister in his second reading speech as though to justify the incorporation of the same kind of provision in the Bill. With great respect, the provision we are considering is not the same as the provision in the Public Service Act. I shall read section 55(1.) of the Public Service Act, omitting the sub-paragraphs that are not relevant. It reads:
An officer (other than an officer in the First or Second Division) who -
is guilty of any disgraceful or improper conduct, cither in his official capacity or otherwise; shall be guilty of an offence. . . .
Let us compare that provision wilh the proposed section 107(10.), for which provision is made in clause 12 of the Bill. The proposed sub-section states:
The last parts of the two sub-sections are identical but the lead in is not. There is a vast difference. The words ‘guilty of any disgraceful or improper conduct, either in his official capacity or otherwise’ in the Public Service Act can be read down to mean that they relate to his fitness as an officer and can only be used against him in an offence against the corporation concerned. But under the Bill it will become an act of misconduct to be guilty of any of these offences.
The position may arise in regard to an old teller, a man who is getting on in years and who because of his age more than anything else has proved to be careless. Call it whatever you like - carelessness, negligence or senility. This old yet perhaps com pletely trustworthy and loyal officer of the bank who, for no other reason than his age, has been neglectful in some respect could be dismissed for the offence of misconduct. To dismiss him would be entirely wrong. I do not believe that the Public Service Act itself is a proper medium for dealing with public servants generally, but at any rate it has an advantage over the Bill with which we are now dealing, because the offence must be qua a public servant’s employment, and unless it is it cannot be applied to him. That is the difference. For that reason, when that proposed section is reached at the Committee stage the Opposition will vote against it.
There are some good features of this Bill to which I shall refer. I do not think it proper for an Opposition to pick out parts of a Bill with which it disagrees and pretend that there are no good parts in the measure. If there are some good aspects in a Bill, then let us hear about them. There is some good in this Bill. It is good because it gives to females employed with the corporation the right to be employed after they are married - a right which female officers in the Public Service already have, lt is wrong that women employed by the Corporation should not have that right. 1 think that the Bill is an improvement on the existing legislation in that it does define the types of things which an officer may not do without risking his employment or suffering a loss of pay or some other form of discipline. There is no such provision in the Act, and there should have been. I am not objecting to a law which stipulates the kind of things a person may not do; I do not mind that at all. I am simply criticising the measure because it has gone far beyond the actual practical needs of the Corporation.
Let me refer to the Minister’s statement about this matter having been dealt with by the bank officers. It is true that the bank officers did speak with the Minister about this matter; indeed, the officers have been negotiating with the Government for quite some time. It is a tragedy that they have had to wait so long to get satisfaction. The Commonwealth Bank Officers’ Association, having read the Bill, wrote to the Minister saying:
We are pleased to see the introduction of this legislation and trust that it is passed through Parliament to culminate our desires for these reforms.
On the other hand, the Association in a letter said:
The aspect to which I have just referred, and which had been conveyed to the officers - we would not see any embarrassment to us if the Parliamentary Labor Party saw fit to lake up the question of action of an officer in his civil capacity.
Although the bank officers have indicated their support for the Bill they have quite clearly accepted it only as something that is infinitely better than the present situation, and because it is a vast improvement on the existing law they want to see it adopted. The Opposition will not vote against the Bill in this House. Whether or not our amendment is adopted at the Committee stage, we will not vote against the third reading of the Bill. The Opposition will try to hasten the proceedings in Committee by grouping two of its amendments together. I refer to the second and third amendments as circulated for the information of honourable members.
At present no proper machinery exists for the hearing of appeals. The Bill proposes to remedy this situation by making certain changes to the operations of the Disciplinary Appeal Board. The Opposition proposes by its amendments to omit any reference to a Disciplinary Appeal Board and to refer instead to the Commonwealth Court of Conciliation and Arbitration. It has been suggested that the court of appeal should be the Commonwealth Industrial Court. I am certain that there have been cases where the Parliament has provided for an appeal to the Commonwealth Industrial Court. The Opposition was on the verge of seeking to provide an appeal in this case to the Commonwealth Industrial Court when Senator Murphy, the Leader of the Opposition in the Senate, who is a leading Queen’s Counsel, drew attention to a case to which I will now refer. The Government should take note of this case. In Regina v. Spicer and others, ex parte Waterside Workers Federation of Australia, reported in Commonwealth Law Reports volume 100 at page 313, the House will see that the High Court held that a section giving a right of appeal to the Commonwealth Industrial Court was invalid in that it purported to confer on a judicial body created under chapter 3 of the Constitution powers of a non-judicial character. Here was a trap into which the Opposition could easily have fallen had it not been for the vigilance of Senator Murphy. I seek the indulgence of honourable members to incorporate in Hansard an opinion given to the Commonwealth Bank Officers Association concerning the Disciplinary Appeal Board.
– The honourable member had better read the opinion. We have not had an opportunity to see it.
The circumstances in which an appeal lies to the Disciplinary Appeal Board are set out in Section 108 of the Commonwealth Banks Act 1959 as follows: 108. - (1) Where an officer is retired, transferred or dismissed, or his status or rate of pay is reduced, under either of the last two preceding sections, the officer may appeal to the Disciplinary Appeal Board.’
It is to be noted that the appeal is restricted to cases where the retirement, etc., is under either Section 106 or Section 107. Section 106 provides: 106. - (1)If an officer appears to the Corporation to be inefficient or incompetent, or unfit to discharge or incapable of discharging the duties of his position, the Corporation may retire him from the Service or transfer him to some other position in the Service with salary appropriate to that other position.
Section 107 provides: 107. The Corporation may dismiss an officer, or reduce his status or rate of pay, for misconduct.’
The restriction of appeals to cases where action is taken under Sections 106 or 107 means that the appeal power is severely limited and the Corporation may easily avoid the provisions by the simple device of ensuring that any disciplinary action is not brought within the terms of Sections 106 or 107.
For example, if the Corporation reduced the status or rate of pay of an officer this would not be appealable unless the Corporation alleged misconduct as the ground for doing so. If it were to state the ground as being inefficiency or incompetency there would be no appeal under Section 108. Again, if the Corporation were simply to state that the officer’s position was being regarded or the action was taken for more efficiency in its service, without any imputation against the officer, no appeal would lie under Section 108.
Again, if the Corporation penalised an officer on the grounds of inefficiency or incompetency or unfitness or incapacity to discharge the duties of his position (the matters calling for disciplinary action under Section 106), no appeal would lie to the Disciplinary Appeal Board unless the Corporation retired him from the Service or transferred him to some other position in the Service with salary appropriate to that other position.
The case of Mr E. J. Kennedy was an example of this. The Corporation did not allege misconduct against Mr Kennedy. Therefore, the Board held that the case was not within Section 107. The Corporation did allege inefficiency against him; this is a matter dealt with by Section 106 but since the Corporation did not retire him and did not transfer him to some other position, no appeal lay. Of course, the reality is that Mr Kennedy has been seriously penalised by the Corporation on the grounds of alleged inefficiency. The Corporation failed to grant him an increase which was being granted generally to officers of his status and rate of pay, yet no redress is provided by Section 108.
It is obvious that this method of avoiding the Appeal provisions of the Act can be availed of by the Corporation on every occasion of any general increase in pay; the Corporation contending that when an officer is deprived of a general increase in pay his rate of pay is not being reduced. This, of course, ignores the realities of the situation, but illustrates that the Appeal provisions as they stand constitute no effective protection for the officers and are in need of amendment.
The Association may consider that it would be appropriate to seek to have an amendment of the Act to provide for an appeal in every case where an officer is retired, transferred or dismissed or his status or rate of pay reduced, without limitation to cases falling within Sections 106 or 107. It might also be thought desirable to provide for an appeal against any refusal to grant to an officer an increase in salary which is being granted generally to officers of the same status or rate of pay, and also against any report or decision which might adversely affect the progress of an officer.
If an amendment of the Act can not be procured there may be an alternative remedy where it can be shown that an officer was retired, transferred or dismissed or his status or rate of pay reduced otherwise than in accordance with Sections 106 or 107. The remedy would be to treat the decision of the Corporation as a nullity and to seek a declaration to that effect in an appropriate court. This remedy of course, is relatively expensive and inconvenient, and not a satisfactory substitute for an Appeal Board with ample power to do justice between the officers and the Corporation. In any event, such a remedy would not be available where the Corporation simply failed, as in Mr Kennedy’s case, to grant the increase in pay.
In my view, therefore, as the Act stands it is open to the Corporation to avoid the appeal provision, by taking penal action otherwise than in accordance with Sections 106 and 107, and thus turn Section 108 into a dead letter. This is against the spirit of the legislation and calls for amendment.
The opinion is signed by no less an authority than L. K. Murphy, Q.C. and is dated 8th September 1960. The date on the opinion indicates clearly that the time the Government has taken to act in this matter cannot be justified. The Opposition therefore can understand and appreciate how relieved the Commonwealth Bank Officers Association must be to know that at long last it has received a small measure of justice and had its claim for a proper appeal acceded to by the Government.
I finalise my remarks by saying that we do not like the idea of these tribunals, which in the past have operated very often with a carefully chosen officer, perhaps somebody who was not able really to act judicially. Sometimes it was a public servant whose position could be in jeopardy if he did other than support the Corporation’s point of view. For that reason we believe that the Commonwealth Conciliation and Arbitration Commission, which is a statutory body consisting of judges who are appointed for life and who have nothing to fear from carrying out their job judicially, is a more appropriate body to handle these appeals.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 to 5 - by leave - taken together, and agreed to.
Clause 6 (Bills of exchange, etc, not liable to stamp duty).
– I formally indicate our opposition to this clause. I will not speak to it because I have already indicated clearly the reason for our opposition.
That the clause be agreed to.
The Committee divided. (The Chairman- Mr P. E. Lucock)
Majority . . 32
Question so resolved in the affirmative.
Clauses 7 to 11 - by leave - taken together, and agreed to.
Section 107 of the Principal Act is repealed and the following section inserted in its stead: 107.-(1.)
For the purposes of this section, an officer shall be taken to have been guilty of misconduct if, and only if:
I will not speak on the amendment. The Minister will say only a few words, so if members remain seated we will soon have another vote.
– I thank the honourable member for his brevity. I will be equally brief. The Government cannot accept the amendment proposed by the Opposition. The effect of the Opposition’s amendment, in broad terms, is to confine the right to take action, where a person has been guilty other than in his capacity as an officer, to cases of dishonesty. The Government is of the opinion that there are a lot of ways apart from dishonesty in which a bank’s relations with its customers can be affected by improper conduct. Therefore, the Government believes that the clause should be cast in the wider form.
That the paragraph proposed to be omitted (Mr Clyde Cameron’s amendment) stand part of the clause.
The Committee divided. (The Chairman- Mr P. E. Lucock)
Majority . . . . 34
Question so resolved in the affirmative.
Clause agreed to.
Clause 13. (1.) Section 108 of the Principal Act is amended by omitting sub-sections (1.) and(2.) and inserting in their stead the following sub-sections - (1.) Where, under section one hundred and six or sub-section (1.) of section one hundred and seven of this Act -
– by leaver - I move:
Omit sub-clause (1.), insert the following subclause: (1.) Section 108 of the Principal Act is amended -
That the following new clause be inserted in the Bill: 13a. Section 109 of the Principal Act is repealed.’
I do not wish to add to what I have already said. However, the Leader of the Opposition (Mr Whitlam) wishes to express his views on the matter.
– I support the amendments moved by the honourable member for Hindmarsh (Mr Clyde Cameron) which substitute the Commonwealth Conciliation and Arbitration Commission for the Disciplinary Appeal Board. The Disciplinary Appeal Board cannot be said to have been overburdened during its period of service. Between 1945 and the present time it has heard only ten appeals. The Opposition takes the opportunity to substitute the Commonwealth Conciliation and Arbitration Commission for that body as a step towards reducing the complexity of Commonwealth administrative appeal procedures.
The Opposition would not have moved for the substitution at this stage if it were not for the fact that it will be many months, and perhaps years, before there can be coordinated appeal procedures from Commonwealth administrative tribunals. In May 1967, when the new Attorney-General (Mr Bowen) made a statement on the proposed Commonwealth superior court, I suggested that it would be an appropriate body to hear appeals from Commonwealth administrative decisions. On that occasion I said:
The size of this matter emerges from an answer which the former Prime Minister gave me on 17lh August 1965 … to the following question:
What additional or different methods of appeal from decisions of Commonwealth departments and instrumentalities have come into operation since his answer to me on 14th May 1958?
In regard to the answer of Sir Robert Menzies I went on to say:
The gist of it was that Sir Robert Menzies listed forty-six Acts; eighty-two sections or groups of sections of those Acts under which appeals could be made; and forty-six different categories of boards, tribunals, committees and courts hearing such appeals. A tally of the separate bodies within the various categories, Slates and Territories would run to hundreds. These bodies seldom sit in public or publish reasons. There is too great a diversity in the existing bodies and too great a mystery in the existing methods. The Commonwealth superior court would, 1 suggest, provide an independent appeal body and regular appeal methods in the Commonwealth sphere, and a method for State and municipal procedures.
I gained the impression that the AttorneyGeneral was attracted by my proposal. On 24th October 1 968, the honourable member for Moreton (Mr Killen) asked the Attorney-General a question concerning the proposed Commonwealth superior court. When the Minister was answering the question I asked him, by way of interjection, whether the Acts that would require individual amendment as a result of the establishment of the Commonwealth superior court included those that provide appeals from administrative decisions. He said in reply:
No. I did mention appeals from administrative tribunals at the time the proposed establishment of the court was announced and said we would consider this aspect, lt will not be dealt with in the Bill as it is presented. Indeed, we have found that an enormous variety of tribunals and officers give administrative decisions and 1 have appointed a committee to inquire into this matter. . . . The committee is undertaking the task of looking at this aspect and it will not be dealt with in the initial Bill establishing the court. Depending on the report of the committee, this aspect could be incorporated at a later stage. The examination of it is obviously a long term job. I think we would be lucky if the court were established by the end of next year.
So the Commonwealth superior court is not likely to be established before the end of next year. The present Government does not propose to make provision for appeals to that court from administrative tribunals. Accordingly, since the Commonwealth Banks Act provides a specific means of appeal we have thought it wise to incorporate a more rational form of appeal in this Bill to amend it. The committee which the Attorney-General has set up - and I quote from an answer which he gave me on 7th November - was finally commissioned only on 29th October. Amongst its terms of reference is:
To consider the desirability of introducing legislation along the lines of the United Kingdom Tribunals and Inquiries Act 1958.
T might add here that this year the Statute Law Review Committee of the Victorian Parliament has suggested that in that State there should be an administrative appeals court. Many honourable members. I believe, will be interested in the analyses and proposals, extending over some seventy pages, prepared for that Committee by the International Commission of Jurists and appended to the Committee’s report.
On 15th October the Prime Minister (Mr Gorton) gave me the latest answer to my questions on the number of boards, tribunals, committees or courts which can hear appeals from administrative decisions, lt appears that there are at present forty-two Acts and their associated regulations. There are eighty sections or groups of sections of those Acts and regulations under which appeals can be made. Dealing with the courts, first of all, in fifteen cases appeals lie to the full court of the High Court, in five cases to single justices of the High Court, in ten cases to Supreme Courts of the States or of the two mainland Territories, in five cases to the Conciliation and Arbitration Commission - and that is the authority we now propose to handle appeals under this Bill - in three cases to the Commonwealth Industrial Court, in two to the Coal Industry Tribunal, in one case each to the Court of Marine Inquiry, to the Law Officers of the Crown, to the CourtsMartial Appeal Tribunal or to courts of summary jurisdiction, and in four cases to courts of competent jurisdiction. In the case of the Commonwealth Employees’ Compensation Act there are various courts, district or country courts in three States and the Supreme Courts in others. Where provision is made for courts of competent jurisdiction, scores of courts may be involved - High Court, Supreme Courts, district or country courts, local courts or courts of petty sessions. In cases of courts of summary jurisdiction, there are, of course, scores, perhaps hundreds, in Australia.
Coming then to other bodies than courts, under 8 Acts there are appeals to bodies called boards of review, under 4 Acts to promotions appeal committees, under another 4 Acts to appeal boards, under 3 to disciplinary appeal boards and under another 3 to valuation boards. Under 9 other Acts there are appeals to variously named boards and tribunals and to a committee and a commission’. In many cases there are multiple tribunals and boards under the one Act or for different Slates. Honourable members are familiar with the Taxation Boards of Review under our taxation laws and the various tribunals under the Repatriation Act. It is quite obvious that there are hundreds of varying methods of appeal from Commonwealth administrative decisions.
Most of these appeal bodies meet quite infrequently. As I have said, there have been 10 appeals under the Commonwealth Banks Act since 1945. The tribunals are appointed for a limited purpose. They are composed, one can say without giving offence, of amateurs. They do not sit in public. They do not give reasons for decisions. In some cases legal representation is denied. In only a couple of cases is legal representation paid for - in effect only when the Commonwealth is making a test case of a matter. In these circumstances we ought to take the opportunity when it offers to provide a proper method of appeal from Commonwealth administrative decisions. The lives of individuals and the affairs of corporations are being affected by a proliferation of administrative decisions. The law has not provided satisfactory appeals from such decisions. We can very readily do so in the Bill now before us by providing that the Commonwealth Conciliation and Arbitration Commission, which has well known traditions and procedures and skills, shall hear the relatively few but, nevertheless, important appeals which may be made by officers of the Commonwealth Banks.
The CHAIRMAN (Mr Lucock)Order! The honourable member’s time has expired.
– Before the Minister rises, may I ask leave of the Committee to omit from my amendment the words ‘Commonwealth Court of Conciliation and Arbitration’ appearing on two occasions and to insert in their stead on both occasions the words ‘Commonwealth Conciliation and Arbitration Commission?
– There being no objection, leave is granted.
– The Leader of the Opposition (Mr Whitlam) almost spoilt an excellent relationship which had sprung up between the honourable member for Hindmarsh (Mr Clyde Cameron) and myself in the handling of this Bill. However,I will be as brief as was the honourable memberfor Hindmarsh. As he himself observed, the original form of his amendment would have been just as unconstitutional as the form in which it appeared after the error in it had been picked up by one of his Party’s senators. Despite the fact that he has now corrected that error, the Government cannot accept the amendment at this stage. As 1 understand the Leader of the Opposition, this is part of a rather massive tidying up arrangement that he has in mind. This would involve a major policy change and the Government cannot accept it at this stage in the context of this Bill.
That the amendment and the new clause (Mr Clyde Cameron’s) be agreed to.
The House divided. (The Chairman - Mr P. E. Lucock)
Majority .. ..31
Question so resolved in the negative.
Clause 13 agreed to.
Proposed new clause 13a negatived.
Remainder of Bill - by leave - taken as a whole, and agreed to.
Bill reported without amendment; report adopted.
Bill (on motion by Mr Freeth) - by leave - read a third time.
Debate resumed from 24 October (vide page 2316), on motion by Mr Anthony:
That the Bill be now read a secondtime.
– This Bill relates to the bounty that is payable on the production of raw cotton. I understand that the debate therefore is limited to the provision relating to the variation in the basis for payment of the bounty, which it is proposed will be related to total production. The Act is to be amended to take account of obvious anomalies that have occurred and which could occur now that the total production of seed and raw cotton has reached the point at which there is a possibility of cotton being exported. Because of administrative and geographic problems it is essential that the bounty be paid on total production.
The Opposition has no objections whatever to the proposed amendments. The Bill is sound and gives full recognition to the problems that have arisen with respect to self sufficiency in the production of Australia’s needs. My few remarks will be related entirely to the bounty itself. I will not speak about problems associated with a reduction in the bounty because, as the Minister for Primary Industry (Mr Anthony) indicated in his second reading speech, this will be the subject of another Bill. I understand that references to that matter would be ruled out of order, especially if we started to talk about the Ord River and Nogoa projects and other cotton projects, lt will be opportune to discuss the economics of these projects later; our remarks today are to be confined to the bounty itself and to the amendments that the Government has proposed.
Australia’s raw cotton requirements - I am not referring to the amount of raw cotton that is required in the manufacture of imported cotton fabrics - are approximately 140,000 bales, and it is highly probable that this quantity will be produced in the 1968 season. The effect of this production will be to reduce the bounty. Honourable members will recall that in 1964 the full bounty of 13.4375c was payable and that it related to a production level of about 11,700 bales. In 1965 the production was increased to 46,000 bales. Again the full bounty was payable, because the ceiling of $4m on the production limit was not pierced. When 1 speak of a bale, I am speaking in terms of approximately 480 pounds of lint.
In 1966 the production of raw cotton was approximately 93,000 bales. The bounty then started to decline, and the average bounty rate, based on middling 1-inch white raw cotton, fell from the full rate of 13.4375c per pound to approximately 8.9c per pound. Production has increased each year, and it is estimated that in 1968 about 140,000 bales will be produced. At this figure the average bounty payable on middling 1-inch white raw cotton will be approximately 5.8c per pound. So the bounty has in fact helped in the expansion of the cotton industry, particularly in northern New South Wales and in the area in Western Australia brought into production by the diversion dam on the Ord River. The bounty is helping to establish the cotton industry on a better plane in the Dawson and Callide valleys and other areas of southern Queensland.
As 1 said before, the Opposition has no objection to this Bill. It welcomes the measure and considers that it is sound in every respect. 1 will reserve comment on certain matters for the principal debate on bounties which will take place when the Minister brings in a Bill relating to the reduction in the bounty over the next 3 years. It is necessary, however, to discuss some of the implications of the bounty relative to this Bill, because one must question the policy of the Government with respect to its intention to reduce the bounty. As the ceiling is pierced (here will naturally be a reduction in the bounty.
The great puzzling factor about the reducing of the cotton bounty is the question of why the arguments put forward by the Minister for Primary Industry before were based on self sufficiency. I followed the Minister in debate when this subject was previously before the House and I pointed out that what is involved is self sufficiency in terms of our requirements of raw cotton and that when one takes into account the S80m worth of cotton fabrics that we import each year, there is considerable scope for expansion of the cotton industry. The Minister should be consistent in his approach to assistance to the cotton industry. After all, we are financially assisting other primary industries such as the dairy industry; the wheat industry by means of stabilisation; the wool industry in research and promotion; and similarly the beef industry. The Government’s rather drastic policy on cotton is very puzzling, particularly in regard to its decisions on the Ord River and Nogoa schemes.
We find that the bounty varies with quality differentials. I refer here to the top rate of bounty of 13.4375c per pound of middling 1-inch white. This rate of bounty provides an approximate level of about 50% protection for cotton growers. There is also an incentive to cotton spinners under the by-law tariff provisions. The inducement to cotton spinners will actually decline as the proportion of Australian cotton used increases. Nevertheless there has been this incentive for Australian spinners to use Australian produced cotton.
One of the important things relating to the bounty is the very vexed question of whether the present level is sufficient. It has been charged in this House, and certainly by those people who seem to be obsessed by opposition to cotton growing anywhere in Australia, particularly in areas that are under irrigation, that the cotton industry is being highly subsidised because of the payment of a bounty. To be fair, one has to look at this from the viewpoint of the world supply and demand situation.
It is well known that the United States of America, the largest exporter of raw cotton in the world, is subsidising the export of cotton to a very marked degree. At present it is subsidising cotton for export at about 9c per pound. Because the United States places such a large proportion of raw cotton on the world market this has a significant effect on the import parity price or the world price of cotton for Australia and other countries. If, for example, America had to produce cotton under the same conditions as Australia, obviously there would be in the future a reduction in exports of cotton from America and an increase in the world price. So. it must be remembered that the world price of cotton - I think it is about 26c per pound of lint - is heavily influenced by the American policy of subsidising the export of cotton. The United States Government has from time to time attempted to deny that it is subsidising exports. But I do not think that anyone who is versed in the working of the farm programme in America would doubt that the export of raw cotton from America is being heavily subsidised. It follows that if Australia had an export surplus and had to sell its unsubsidised cotton on the world market, it would have to compete on very unfavourable terms with the United States because of the American policy of subsidising exports. This would have a serious effect on the Australian industry because the major importer of cotton in the world is Japan.
If we take the total imports of raw cotton to Japan and convert them on an acreage basis, calculated on a yield of about 2,000 lbs of seed cotton per acre, we get a figure of about 2.5 million acres. This gives us some idea of the tremendous market in Japan for raw cotton. This is a tremendous import requirement. So the market is there. It remains to be seen whether Australia can compete on the export market or not. But there is certainly no doubt that we can produce cotton in Australia as cheaply as it can be produced in. the San Joaquin Valley in America or in some of the top cotton growing areas in America. That statement is based on a fair, comparison, not taking into account the very heavy export subsidy on American raw. cotton. A very strong case can be made for . maintaining the bounty on raw cotton, because if we take into account what I have stated regarding the effect which the American subsidy of 9c a lb has on cotton sold on the world market, we find that the world market price would probably be. increased by approximately 3c a lb of lint. So taking into account the present rate of bounty and the adjusted import parity price, the level of protection would be only approximately 25% .
Honourable members might ask: Why should cotton producers be subsidised, even to the extent of 25%? The policy of the Government - certainly of the Australian Labor Party - is to protect industries Which are efficient in terms of the use of imports. That does not mean that we should maintain an economic advantage in comparison with overseas countries which are using all sorts of devices to protect and subsidise primary and secondary industries. If an industry is efficient and economic within the criteria laid down, for example, by the Tariff Board, then 20% protection is not a high figure when one considers the very high protection given to some secondary industries. I stress that my argument today does not relate to cotton grown on the Ord or the Nogoa or anywhere else. I will debate that question at length when a Bil! is introduced to reduce the cotton bounty. The purpose of the Bill we are discussing today is to amend the Raw Cotton Bounty Act by providing that bounty will be payable on the basis of total production. Previously it did not provide this. The Act is being amended simply because of the administrative difficulties which have arisen and the unfairness which would have occurred if the areas which harvest late missed out on the spinners’ requirements and had to export their cotton. Under the present Act the bounty is not paid on cotton that is exported in its raw form. All that the amendment to the Act will do will be to allow this anomaly to be corrected. As I said previously, the Opposition welcomes this sound amendment.
One very important policy question regarding cotton which worries’ me considerably is that the Government allows some very high rates of protection - up to 100% effective rate of protection - on some secondary industries, including the motor car industry, the chemical industry, the machinery industry and the clothing industry. lt also allows high rates of financial assistance on some primary industries, such as the dairy industry and the wheat industry. It gives valuable financial assistance to other industries. Why single out the cotton industry to make a drastic reduction in the rate of bounty? This is a very vexed and deep question. There has been a lot of discussion in the past about the effect which trade policy has on certain other countries, lt is obvious that if production of cotton is increased in Australia, those countries which have been our traditional suppliers of raw cotton will be displaced. Obviously they will try to stop this happening.
– Would not the rural economists say that it is wrong to encourage a new industry if it is not economic?
– Yes. But I would suggest that this question is not dealt with in the Bill we are discussing. This Bill deals specifically with the question of bounty. The Bill yhich the Minister for Primary Industry will introduce at a later stage will deal particularly with the question of cotton growing on the Ord and on the Nogoa and with vital aspects of cotton production. I was saying that by increasing cotton production we displace traditional suppliers of raw cotton. At the same time, if we enter the export market we then start to compete with the United States of America, which is the world’s biggest supplier of raw cotton. I am not suggesting that the Australian Government is penalising the Australian cotton industry because it believes that it may offend the United States to be gin to compete with that country on the valuable Japanese market. Let us remember that it has always been the Government’s policy, as I understand it, to try to reduce the very high tariffs on our primary products which are sold overseas, particularly in the United States. From memory, I think that the tariff on raw wool in the United States is more than 20%. The same argument which I am advancing in regard to cotton can be applied to the importation of tobacco and to the use of a greater proportion of Australian tobacco.
There is no question that trade policy is important when we are dealing with aa industry like the cotton industry. It is a highly political question in the international scene. It affects some very powerful countries, particularly the United States, Japan and some of the exporting countries which would be displaced if we increased our cotton textile production. But there is no doubt in my mind that, if given the chance, we can produce cotton efficiently in Australia. Let us look at the record. I suppose that for 30 years the cotton industry in Queensland was struggling to produce cotton under dry land agricultural conditions and under levels of extreme inefficiency. This was the position until the scientists and economists pointed out that the only way in which to grow cotton is to grow it under irrigation. Cotton is very dicey. It is not like sugar cane, wool or grains. If anything happens to the boll, through disease or through soil deficiency, a farmer could get nothing from the crop. I cannot think of the word which has been used to describe the boll but the cotton boll is a very delicate fibre. But given the chance, cotton can be produced efficiently in Australia under irrigation. I think that the Narrabri and the Ord schemes have shown that we can produce cotton efficiently, in terms of yield per acre. If one makes a fair comparison between the cost of the production of cotton at Narrabri or on the Ord with the cost of production of cotton in California and in other high producing areas in the United States, one must come to the conclusion that Australia can produce cotton efficiently and that it will in time be able to export cotton, provided that the high export subsidy on raw cotton which is paid in America is fully taken into account. It is a high export subsidy and it places Australian producers at a decided disadvantage on the export market.
The other reason why I believe that a very strong case can be made for the retention of the cotton bounty is that the Australian cotton grower is expected to sell his surplus cotton on the world market which is, in effect, being heavily subsidised and on which, to a degree, cotton is being dumped by the Americans. The Australian cotton grower’s cost of production, including fuel, wages, fertiliser, tractors and other materials, has to be costed at domestic prices.
– A cotton picking machine costs about $22,000.
– Yes, and I understand a substantial duty is being placed on harvesters. That is a different point. It is imperative that the cotton bounty remain until areas such as the Ord and Nogoa become established. I fail to see why Narrabri, for instance, should have been allowed to have the lion’s share of the bounty since 1964 if the bounty is to be reduced before the new areas become established. Economies of scale are essential in the new areas. The growers in these areas should be able to buy fertilisers at bulk rates and get the materials that they need at reduced freight rates, lt is essential that the new areas be allowed to establish themselves before the bounty is drastically reduced. I give notice to the Government that, when a Bill to reduce the bounty is introduced, the Opposition will oppose it in every way possible, because a reduction of the bounty would have a serious effect on such areas as the Ord and Nogoa. Although we do not disagree with a reduction of the bounty for certain established areas that have had the opportunity over the past 4 or 5 years to become established, we think it is wrong to ask the new areas, where the growers are expected to meet high costs, to bear the brunt of a savage reduction of the bounty. As 1 said before, this is not the subject of the Bill that is now before us, and I appreciate the tolerance that I have been shown. I give notice that we will strongly oppose any Bill that seeks to reduce the bounty because of the adverse effect such a reduction would have on the Ord and Nogoa areas.
– How can the Government give a bounty to one area and not to another under the Constitution?
– I think that can be done. In fact, differential payments are being made in certain areas of Australia under the Constitution.
Order! That is not the subject before the House at the moment. I ask the honourable member to confine his remarks to the Bill.
– I will, Mr Deputy Speaker. In my view section 96 of the Constitution is the key. Under it a grant can be made to a State.
– The honourable member for Dawson (Dr Patterson) referred to the spectacular increase that has occurred in the last 7 years in the production of short and medium staple cotton in Australia. This increase, which has raised the level of production of these grades of cotton above the demand by local spinners, has brought about the introduction of this legislation. The bounty is now to be paid on production and not, as it was formerly, on cotton sold to domestic buyers in Australia. The spectacular increase in the production of cotton in Australia should not hide the fact that cotton has been produced in various parts of Australia, that it has been produced at various cost levels and that cotton of varying grades has been pro.duced. I understand that cotton from the Ord, which was mentioned in passing by the honourable member for Dawson, is so weak that at least one Australian buyer has to break it down by mixing it with cotton from the Namoi region at the rate of 1 bale from the Ord to 48 bales from the Namoi. We are not speaking about a simple commodity. It is a most complex commodity and has been produced, thanks to the operation of the bounty, in areas subject to a wide range of conditions. This has resulted in . the production of a wide range of grades of cotton.
I wish to refer to another matter that was glossed over by the honourable member for Dawson. When we speak of assistance to the industry by the payment of a bounty, we must not forget that the industry has been assisted in many parts of the continent by indirect subsidies. These subsidies have not been paid in the principal region - the Namoi. But this assistance has been given in the Mumimbidgee Irrigation Area and certainly in the Ord River area. Both those areas, in contrast to the Namoi, have been given the benefit of research assistance by the State governments and by the Commonwealth Government. They have had the assistance of a large amount of finance for engineering works, for earthworks, for the construction of supply channels, for diversionary structures, for roads and so on. All this assistance forms an indirect subsidy to the industry and should be added to the amount made available by way of bounty for the production of cotton.
I said that this does not apply to the Namoi. The Namoi now supplies 75% of Australia’s requirements of cotton and is at present increasing its range of grades of cotton to meet the full range of demand of Austraiian mills. The Namoi is the most striking example of what private enterprise can do that we have had in Australia at least in the last decade. The pioneer growers in the Namoi region went there against the technical advice of the State authorities. They have had to finance all their own levelling, earthworks and diversionary channels and at the same time survive the worst drought that has ever been recorded in the district. Despite these handicaps and many others, including the necessity to do most of their own research work, they have been able to achieve remarkable results and they can go on from this point. It would be much wiser, I suggest, for the Government to give more assistance to the proved and tested area, the size of which can be increased very easily, than to continue to give a blanket cover for the whole of Australia so that cotton may be grown even in high cost, areas.
The figures given by the Minister a few days ago are indicative of the returns that can be obtained by growers on the Namoi and the returns, by contrast, that have been obtained by growers in other paris of Australia. The figures reveal quite clearly that the Namoi is the only region, apart from central Queensland, in which cotton has been grown successfully. That district having selected itself should be encouraged individually by this Government and by the
State Government to meet Australia’s cotton needs, both on the domestic market and the overseas markets. In that way we will be sure that we are producing cotton at the lowest cost and in the most efficient manner that is possible.
Sitting suspended from 6 to 8 p.m.
– The Raw Cotton Bounty Act, which the Bill now before the House seeks to amend and which is due to expire at the end of February next year, makes provision for the payment of a bounty on raw cotton at a standard rate of 16.125c per lb for middling 1 inch white lint with premiums and discounts for grades and staples above and below the standard grade and a maximum total bounty payout of $4m in any I year, with the proviso however that the cotton must be sold for use in Australia. Irrespective of the amount of cotton grown and no matter whether it is sold within or outside Australia, no more than $4m can be paid out by way of bounty. The measure proposes to amend the Act by removing from the title the words ‘sold for use in Australia’. This will remove a restriction which will operate unfairly against a number of colton producers in relation to future crops and the immediate season’s crop, particularly against growers in districts such as in the Ord River area of Western Australia where harvesting takes place rather late in the year.
The amendment proposed by the Bill is quite acceptable and has the support of members on this side of the House. Even so, we cannot enter into the debate with any degree of pleasure or satisfaction for the simple reason that, while the amendment will remove a provision of the Act which has become unfair and unacceptable, we cannot forget that any advantage or benefit which certain cotton growers may gain will only be of a very temporary nature if the Government proceeds with its proposal to phase out the bounty altogether over the next 3 years. From the remarks made by the Minister during his second reading speech it seems fairly obvious that the Government intends to do this. If the Government does pursue its intention to phase out the bounty, in each year from 1969 a lower total amount of bounty will be available for distribution to cotton producers. The amount of $4m which is at present available will decrease until eventually, in about 3 years time, no bounty at all will be paid irrespective of whether the cotton is sold for use in Australia or elsewhere.
– Mr Speaker, I rise to a point of order. Is the honourable member speaking about the Bill or is he referring to things which may occur in the next few weeks or next year?
– I must admit that I was engaged in conversation and I did not hear the last part of the honourable member’s remarks. I remind the honourable member for Kalgoorlie that this Bill seeks to remove the possibility that bounty receipts by any grower could be determined by pure chance and to ensure that the 1968 raw cotton bounty is distributed to all growers in direct relation to the quantity and qualities produced.
– I accept your interpretation, Mr Speaker, but with clue respect I draw your attention to some of the remarks made by the Minister in his second reading speech.
– I am not correcting the honourable member for Kalgoorlie at this stage. I merely draw his attention to the purpose of the Bill.
– We are faced also with the situation that cotton production in Australia is increasing quite considerably and quite rapidly. Therefore any additional amount of bounty which some growers may receive from this year’s crop as a result of this amendment can be expected to disappear next year or in the following year at the very latest, due to the lower average amount of bounty which will be paid on each pound of cotton produced and sold, no matter where it is used. In those circumstances any beneficial effects flowing from this Bill can, as 1 said earlier, only be of a very temporary nature indeed and can do no more than perhaps help in a very small way to solve any immediate problems in some areas of production. Some growers in the early growing districts with which the honourable member for Gwydir (Mr Ian Allan) is apparently concerned can suffer a reduction as a result of this amendment.
However, although it is only fair that this action should be taken, it could have been taken earlier. If it had been taken earlier it may have saved a few worries and doubts as to what the intention . of the Government was. During the. debate on the Western Australia Agreement (Ord River Irrigation) Bill in June of this year I took the opportunity to draw attention to the fact that the Raw Cotton Bounty Act in its existing form gave a very distinct advantage to cotton growers in areas of Australia which enjoyed an early season and early picking as against growers in areas such as the Ord River area where the season is so much later.
In 1963 when provision was inserted in the Act for a maximum bounty of $4m per year, with the restriction that it bc paid only on cotton sold for use in Australia, the total production of cotton in this country was only about 151 million lb unginned. That quantity was recovered from about 37,500 acres. So there was no problem with the distribution of the bounty. Since then cotton production has increased considerably, particularly since 1 964. Most of the increase in both .acreage and production has taken place in areas which enjoy an early picking season. The Australian Year Book’ shows that in 1962-63 New South Wales had only about 2,500 acres under cotton and produced approximately 3 mililon lb unginned; “which is equal to about 400 lb of lint cotton per acre. That is very poor when compared with today’s average. However, in 1963-64 the total area sown in Australia increased to 41,000 acres which was only 3,500 acres above the earlier year. New South Wales had increased its acreage by approximately 8.500 acres and Queensland had dropped back to about 7.000 acres, while Western Australia had just come into the picture with about 1,500 acres. Production for that year increased from 15i million lb unginned to a little over 18 million lb, with New South Wales increasing by some 5 million lb and Queensland going backwards by about the same amount.
In 1964-65 New South Wales increased its acreage from 11,000 to about 19,000 acres, from which was recovered approximately 46 million lb of unginned cotton, while the total production in Australia was only about 63 million lb. In that yeal
Western Australia planted about 5,500 acres and recovered approximately 10.8 million lb of seed cotton. In 1965-66 there was a further spectacular increase in acreage under cotton in Australia; it reached 55,000 acres and the yield was approximately 134 million lb. In that year New South Wales planted approximately 33,000 acres for a return of 103 million lb of unginned cotton, while Western Australia planted 8,300 acres and had a yield of 20.4 million lb of seed cotton.
Those figures taken from the Australian Year Book’ illustrate the rather steep increase which has taken place in cotton production in Australia over a very short period of time - from 15i million lb in 1962 to 134 million lb in 1966. They also indicate how New South Wales has increased its cotton production over the same period - from 3 million lb in 1962 to 103 million lb in 1966. This increase in production was due not only to the increase in the area planted but also to the higher yield. The average yield per acre in Australia in 1962-63 was only 418 lb. There was a slight increase to 445 lb in 1963-64 but in 1964-65 production rose to 1,662 lb an acre. In 1965-66 production reached the figure of 2,436 lb an acre.
The point I am making is that the situation affecting the amount of bounty available can change quickly. At present the maximum amount of bounty is $4m. It is obvious that the average amount of bounty payable per lb will be lower in 1968 than it was in 1963. Australia has not necessarily reached peak production. This is particularly the case in New South Wales and other early season areas. Because of the substantial increase in production that has already taken place in the early harvesting areas, Australian spinners should require only about 65 million lb of lint cotton to meet their requirements each year. I believe that these requirements increase each year by about 2%. Apparently spinners can largely satisfy their requirements from the early crops and require very little from growers who, through no fault of their own, are obliged to sow and to harvest at a later stage in the year. As a result of this, coupled with the fact that the bounty has been payable only on cotton sold for use in Australia, growers in early areas, such as the Namoi, are able to capture by far the greatest per- centage of the available subsidy at a higher rate per lb than would be the case if all other growers could claim on the cotton which they are obliged to sell outside Australia simply because local demand has been satisfied. I am not opposed in any way to what the people on the Namoi are doing. It is natural that they should do all they can to capture as much as they can of the available bounty.
As I said in the House last June, growers such as those on the Ord are under a definite disadvantage as the Act now stands. On that occasion J. urged that something be done to ensure that those farmers receive an equal and fair share of the Australian market. Nobody can deny that that is a fair and proper proposition to put before the Parliament. Naturally I was pleased to learn subsequently that the Government had become aware of the advantages and disadvantages which could flow from the Act. I was pleased to learn that the Government had decided to rectify the situation to some extent at least. But I was shocked and puzzled to learn also that within 2 or 3 years the bounty would be removed completely. Nothing was said at the time to indicate that any other assistance would be forthcoming in its place. 1 still remain hopeful - I admit it is a fairly forlorn hope - that the Government will decide against the removal of the subsidy at such an early stage of development in some areas or will provide some other form of assistance where it is required. While some growers in some areas do not need further assistance by way of bounty we know that quite a number of other growers need assistance and will continue to need assistance for some time to come. We know that others will be going on to new farms in new areas. Some will be going onto farms that have to be redeveloped. These people will require some assistance.
I do not want to dwell on this matter because of your ruling, Mr Speaker, but I realise that the Constitution does not allow a bounty to be given to some and not to others. However, there is nothing to prevent assistance being given in certain other forms. I consider that the Government has done a great disservice both to the cotton industry and to northern development by making the announcement that it would phase out the cotton bounty without at the same time indicating how those people needing assistance could get it. I have always suspected that the Country Party is opposed to development of the Ord River project, simply because it eventually could present problems with respect to the payment of bounties to farmers on the Namoi. That suspicion was strengthened today by the remarks of the honourable member for Gwydir (Mr Ian Allan).
– Order! The honourable member may make only a passing reference to that subject. He cannot proceed to debate the pros and cons of past crops or forward crops. The Bill deals only with the 1968 bounty.
– I understand that I am in order in replying to anything that was said by an earlier speaker.
-The honourable member would not be in order. 1 am not responsible for what took place during my absence from the chair.
– I respect your ruling, but it became obvious to me when the honourable member for Gwydir was speaking that the Country Party was opposed to the development of the Ord River project. There is no doubt about this.
– 1 rise to order. 1 understood the honourable member to say that I was completely opposed to the Ord River scheme. That statement was false.
– There is no substance in the point of order. The honourable member for Gwydir may make a personal explanation later if he wishes.
– If this amendment to the Act is to have any substantial and lasting value or if it is to assist the struggling grower or the grower facing costs that are higher than usual it would be necessary to do one of two things. Either the total amount of bounty would have to be increased substantially above the present S4m so that all growers would receive a reasonable measure of assistance or assistance by way of subsidy would have to be paid on a cost of production basis in the same manner as it is provided under the Gold-Mining Industry Assistance Act. I agree that where assistance is not required it is wrong to use taxpayers’ money to provide it except in those cases where such a course cannot be avoided. If we adopted the method that is adopted under the Gold-Mining Industry Assistance Act farmers in new areas or on new farms or farmers who suffer from some disability not experienced elsewhere or who experience costs higher than are experienced in any other place could receive assistance up to a certain maximum amount depending on their costs. I would like the Government to look at this suggestion.
In introducing this Bill the Minister for Primary Industry (Mr Anthony) for some reason emphasised that the Bill does not give effect to a 3-year extension of the raw cotton bounty, which he . said was the subject of a statement which he made recently in the House. In that statement the Minister dealt with the bounty although he did not specifically state that it would be phased out over 3 years I wonder why the Minister found it necessary to draw attention to his earlier statement, because the Bill is clear enough.’ When the Minister introduced the Bill, knowing that he is well aware of the worry and consternation which he caused amongst many growers by his previous statement, 1 thought he was grasping the opportunity to let it be known that the Government intended to provide some other form of assistance to take the place of the bounty. But apparently this was not so. Under this Bill farmers on the Ord and in some other areas will receive, some further assistance but it will not be lasting. Like all other cotton producers they were faced with the situation of having to plant the coming season’s crop in the knowledge that; they will almost certainly receive less ‘ for it than they received in the previous year. They were faced also with the knowledge that any decrease in acreage and ‘production could lead to an increase iri ginning costs. Having regard to your ruling; Sir, 1 will content myself by saying that the Government has done a great disservice to the cotton industry and to growers generally.
To receive the 13-Jc per lb, the farmers’ production of cotton eligible for bounty could not be any more than approximately 30 million lb ginned! According to the Australian ‘Year Book’ that figure was not reached until 1965-66. Therefore, we have this rather fantastic and unrealistic situation where the bounty has dropped by more than one-half, or by 8c or 8ic over 3 years, lt is now to be phased out altogether. I suggest that other than in exceptional circumstances - I want to be very brief in this regard - or in well established areas the reduction in bounty, with the threat of a complete phasing out in a very short time, is far too severe. J conclude on that note. I apologise if I breached the orders in relation to the narrowness of this Bill, but I am satisfied that my suspicions about the attitude of the Country Party in relation to the Ord River project have been confirmed by what the honourable member for Gwydir said.
– I too listened with a great deal of interest to the Minister for Primary Industry (Mr Anthony) when he introduced the Raw Cotton Bounty Bill. By and large, members on this side of the House support the payment of bounties lo new industries. When the legislation providing for the present cotton bounty scheme was introduced in 1963 it was given unanimous support and took effect from 1st January 1964. Since that time a good many debates have taken place regarding the need for raw cotton production in Australia, particularly in the Ord River area. Some honourable members on this side of the House were in favour of the Ord River project while others on this side were not. The Minister said some 3 or 4 weeks ago that he would introduce another Bill either later in this session or early in next session whereby the original cotton bounty would be extended by 3 years, but the bounty would be reduced from S4m a year to nil over a period of 3 years. In other words, the bounty would be reduced by at least $lm per year. I am a little surprised to learn that we now find it necessary to introduce the Raw Cotton Bounty Bill 1968, which in fact extends the legislation presently on the books.
As I have said, the present cotton bounty of $4m per annum was established to ensure that cotton production in Australia, particularly in the Ord River area, became a viable unit in primary production. My criticism, if it can be called criticism, is centred on the fact that when the Ord River project initially was put before honourable members we received sufficient information from the Western Australian Government to be sure in our minds that production in the Ord River area would be agriculturally and economically viable. Therefore any additional financial assistance to the cotton growers on the Ord or in other parts of Australia should come from the State government concerned, not from the Federal Government. In other words, the States concerned have absolved the Commonwealth Parliament by saying that this is an economically viable area for the production of cotton. The submissions are in the hands of the Minister. Those of us who are interested have seen-
– I raise a point of order. The honourable member for Kalgoorlie (Mr Collard) was told to relate his remarks to the Bill. This is an amendment relating to the bounty. I also was asked to confine my remarks to the Bill. By no stretch of the imagination can this debate be interpreted as being a debate on the economics of the Ord River scheme, because if it were I can assure you, Sir, that 1 would have taken the liberty that the honourable member for Balaclava is now taking.
– I remind the honourable member for Balaclava, as I did the honourable member for Kalgoorlie, that this is a bounty Bill relating to the raw cotton crop of 1968. lt would be out of order for the honourable member to debate the merits or demerits of the Ord River scheme. He may make passing reference to the schema but he may not make it the main theme of his remarks.
– Thank you, Mr Speaker, for your ruling, and I must defer to it. I remind the honourable member for Dawson (Dr Patterson) that he spoke about the Nogoa scheme, the Murrumbidgee Irrigation Area, the Ord River and all the things associated with the production of cotton in Australia. In fact, he talked about the assistance given by the American Government to the cotton producers in. America. Now he finds it possible to stand up and take a point of order against me. It is one of those aspects of Parliament that I find difficult to follow.
As I have said, the cotton bounty was originally established by the Parliament to ensure that the cotton producers in Australia would become a viable producing unit in the economy. The cotton bounty now under discussion applies to the production of all cotton in Australia, whereas the previous legislation referred particularly to cotton used by Australian spinners. It is my understanding that the Australian spinners find it very difficult to use some of the cotton produced in Australia. I have it on very good authority that one-third of the production from the Ord River can be used by the Australian spinners. The other twothirds of that production has to be stockpiled by the Australian Government or sold overseas. This legislation will ensure that the producers of cotton will receive the benefit of the raw cotton bounty between now and when it expires. The total bounty will be $4m for this season.
I find it difficult to believe that cotton that has been rejected by Australian spinners can be sold overseas. One of the problems besetting the cotton industry in Australia and one of the reasons for the introduction of the Raw Cotton Bounty Act in the first place was that Australian cotton could not be sold at competitive prices because of its quality. I was surprised to hear the honourable member for Dawson, when he spread his remarks over the whole range of cotton production and uses, speak about the economics of cotton production in Australia. He said we could produce all the cotton that Australian spinners would need in terms of quantity, but not once in his whole speech did he talk about quality. I feel that the Western Australian Government is at fault in the first place for submitting the original proposals for the Ord River scheme to this Government. We in turn find ourselves responsible for having to increase the raw cotton bounty per pound or per bale to the producers on the Ord and in other parts of Australia. I say this because it is the Australian taxpayer who provides the revenue that enables the Government to pay bounties to industry - in this case the cotton industry. The taxpayers pay for the bounty. When the Ord River project was put forward it was the taxpayers who were sold the idea that northern development was the ‘in’ thing in Australia.
Taxpayers right throughout the Commonwealth believed that the Commonwealth Government and the Western Australian Government were doing the right thing by developing the north. They felt the Commonwealth Government was doing the right thing by assisting the Western Australian Government to establish the production of cotton in the northwestern part of Western Australia. They approved of the Commonwealth Government’s decision to introduce a cotton bounty in 1964, and I feel sure that they approved of the Government’s decision to introduce this legislation to assist these cotton growers over a given period. But I still say that some sort of confidence trick has been played on the taxpayers, because we now see in the headlines in the newspapers that farmers in certain areas of Australia cannot make a go of the production of cotton and cannot sell their cotton to the cotton spinners in the eastern States. Cotton spinners have told me that they find it most difficult to use some of the cotton produced in certain parts of Australia. They have told me that they have to mix this cotton with either imported cotton or cotton from other areas of Australia. They cannot understand why the Government is extending the bounty for this type of product. They believe that the Government is not doing a service to the cotton spinning industry. These spinners have to keep labour employed in their factories. One of the problems of secondary industry in Australia is to ensure that labour is highly efficient.
As I have pointed out, the economic viability of certain areas of Australia was established by the Western Australian Government and submitted to the Commonwealth Government, which accepted the findings. The Australian taxpayer is being asked to do a good deal more than pay $4m a year for the raw cotton bounty. The Government has already decided to proceed with the main dam on the Ord River, which is to cost an additional $70m. The taxpayers will have to meet this cost. Now they are asking upon what grounds it was decided in the early stages that cotton growing was an economically viable proposition?
– Is the honourable member opposed to the Ord?
– The honourable member for Dawson asks whether I am opposed to the Ord scheme. What I object to is that information was given to the Commonwealth Government by the
Western Australian Government in the first place and then by the technical officers of the Department of National Development that this was an economically viable proposition. The man most responsible for the submission of the reports to the Department of National Development-
-Order! As 1 pointed out earlier, the Ord River project is nol the subject of this debate. I suggest to the honourable member for Balaclava that he should confine his remarks to the contents of the Bill.
– Thank you once again, Sir, for your ruling. As a member of Parliament. I realise that the Australian taxpayer has continuously to meet the cost of bounties - not only for cotton but also for other primary products - and I am speaking on his behalf. The Australian taxpayer is prepared to pay for the tariff prolection that secondary industry needs. We on this side of the House have no objection to the cotton bounty. We do not doubt that bounties should be payable on cotton and other primary products because we realise that they reduce the prices of the finished products at the retail stores. I see, Mr Speaker, that you are becoming disinterested in my remarks so I will conclude by saying I believe that the Commonwealth Government was compromised into going ahead with this proposal, first by the Western Australian Government’s statement that the proposition in Western Australia was an economically viable one, and then by the honourable member for Dawson who, as Director of the Northern Division of the Department of National Development, made submissions to the Minister for National Development to ensure that the taxpayers of Australia would have to pay $70m or more to go ahead with the Ord scheme.
– I rise to order, Mr Speaker. The honourable member is moving away from the Bill. What the honourable member is saying has nothing to do with the Bill.
– I point out that the honourable member for Balaclava has concluded his speech.
– 1 find it difficult to understand the statement made by the honourable member for Balaclava (Mr Whittorn) that cotton which has been rejected by Australian spinners is being sold overseas. I would think that there is a more competitive market overseas than in Australia. The honourable member for Balaclava has indicated his opposition to any increase in the bounty and no doubt he will support a measure that will be debated by the House at a later stage. This Bill is to ensure that the 1968 raw cotton bounty is distributed to all growers in direct relation to the quantity and qualities produced, irrespective of whether it is a later harvesting. In his second reading speech the Minister for Primary Industry (Mr Anthony) said that this year for the first time, and far sooner than was ever contemplated, production exceeded Australia’s demand. This statement is made at a time when 70% of Australia’s cotton requirements are imported. On what basis does he make this statement? Is it to be accepted that for ever more we will have to import at least 70% of our cotton requirements? lt may be said that if we imported cotton from the cheap labour countries, such as Egypt, we will obtain our cotton materials or goods at a cheaper price. The honourable member for Dawson (Dr Patterson) has already pointed out that the United States of America subsidises its cotton industry to a very great extent.
When consdering this Bill we should remember the history of cotton growing in Australia. As a result of the American Civil War in 1861-65 cotton growing was first established as an industry in Australia. Whenever there has been a shortage of cotton throughout the world Australia’s industry has prospered. Immediately the differences between the States in the American Civil War were settled the acreage under cotton in Queensland - 14,674 acres - began to decline. This continued until the 1920s when the State Government decided that it should guarantee a price. This decision resulted in an eventual increase in the cotton acreage. Cotton growing has always been a section of primary industry that has been affected by political decisions. This applies not only in Australia but also to countries overseas.
The depression years and the Government’s bounty payments during the pre-war years brought the acreage up to 68,000 in Queensland, but this figure again fell due to a shortage of cheap labour.
With the demand for cotton during the war, people were encouraged to participate in cotton growing and the crop was increased to something like 40,000 acres, but this gradually dropped back again in the post-war period. Following the guaranteed price in 1951, cotton growing expanded but declined again until the introduction of the present cotton bounty. Cotton growing in Australia during that long period was predominantly carried on in Queensland yet today Queensland produces only a little more than 7% of the total production of cotton in Australia. “There has been a swing away from dry farming to irrigation. This has been very profitably done in the Namoi area of New South Wales and more recently in the Murrumbidgee Irrigation Area - with the encouragement of the Government of course. But if Australia is importing 70% of its cotton requirements, I fail to see why some honourable members suggest that there should be a complete withdrawal of the bounty.
We must remember that the amount of the bounty is fixed, and the increase in the acreage of cotton has meant a decrease in the amount of bounty paid per lb from 13.437c in 1.964 to 5.6c in 1968. It has been found economical to produce cotton in Australia under irrigation. It is worth recalling that not only the Ord River scheme but also the Nogoa River project has been based on cotton production. I recall that when the Treasurer (Mr McMahon) made a visit to the area in Queensland the year before last he told the people there that if they were basing the economics of the scheme on cotton production they were working on a wrong premise. Nevertheless, the Queensland Government recommended in favour of the Nogoa-Emerald scheme, the main storage in which will now be known as the Fairbairn Reservoir.
– I raise a point of order, Mr Speaker. You have pulled up others on this matter. I am wondering if you are going to pull up the honourable member who is speaking.
Mr SPEAKER (Hon. W. J. Aston)Order! If the honourable member will put his point of order in the correct parliamentary manner I will consider it. I call the honourable member for Wide Bay and I make the same suggestion to him as I have to other members as to the subjects to which he should confine his remarks.
– I will respect your wishes, Mr Speaker. I merely point out that cotton growers in Australia have been encouraged to engage in the production of cotton. They have been given assistance by Government departments. For my part, 1 agree with the extension of the bounty for another four months to 30th June 1969, and while we are importing 70% of our requirements of cotton I do not believe there is a case for the elimination of the cotton bounty.
– I support the Bill which provides that in respect of cotton produced in 1968 the bounty will be payable on a production basis. I believe this is necessary. The present legislation provides that the bounty will be payable only on raw cotton sold for use in Australia. There is no doubt that with the great expansion in the cotton industry the present legislation gives an advantage to those areas in which cotton can be produced and sold earlier than it can be produced and sold in other areas. When the scheme was first introduced it was quite equitable, lt remained equitable while Australian production of raw cotton fell short of Australian demand. It provided an equitable method for the distribution of the bounty. But the industry has expanded rapidly to a position in which it would appear that a considerable quantity of Australian grown cotton will have to be exported. In these circumstances if the cotton bounty is to be equitably distributed it will have to be made payable on a production basis as is proposed in the Bill.
There has been a good deal of discussion of matters which are not directly related to the Bill before the House. I did want to point out, however, that there has been an increase in cotton growing in the southern area of Queensland. Irrigation has been provided in the Condamine River valley. In the St George district an irrigation scheme has been implemented which is being extended at the present time. In that area cotton is being grown very successfully. Like most of these projects the scheme has had its teething troubles, but they are being overcome and both the areas I have referred to are proving their capacity to grow high quality cotton. It is worthy of note that a cotton ginnery in the metropolitan area of Brisbane has been removed, renovated and re-erected at Cecil Plains in my electorate. This is an example of how irrigation can help decentralisation. But if the cotton bounty is to continue to play the important part that it has until now it will have to be distributed equitably, as is provided for in this Bill.
I have referred to the irrigation project at St George, which is Queensland’s largest inland town without railway facilities. This scheme has contributed very greatly to the progress and prosperity of both the town and the district. Cotton has become a major crop in the area. Although cotton growing is a new development in the St George district, cotton grown in the district this year won a State competition based on quality and on the quantity produced per acre.
-Order! The honourable member is getting a little far removed from the contents of the Bill. I ask him to come back to the Bill and the specific provisions of it.
– I respect your views. Mr Speaker, and because of that 1 will not refer to the remarks of the honourable member for Dawson (Dr Patterson) who stated that the United States was specifically-
– Order! The honourable member will not reflect on the Chair.
– I was not reflecting on the Chair, Mr Speaker. 1 simply thought that I might be entitled to reply to these remarks of the honourable member for Dawson.
– The honourable member may reply to the remarks of the honourable member for Dawson if the remarks of the honourable member for Dawson were relevant to the Bill.
– I respect your ruling and I will keep within the confines of the Bill, because there will be another Bill com ing up for debate and this will give us an opportunity to discuss these matters. The salient feature of the Bill now before us is that it provides for an equitable distribution of the bounty. There is no doubt that it provides for a fair and equitable distribution of bounty funds amongst Australia’s cotton growers. Tt has been suggested that the bounty might be phased out over a period, but this has no bearing on the fact that while the bounty continues to be paid it is necessary for the Government to see that every cotton grower gets a fair and reasonable share of the money provided. Since this is the essence of the Bill, and since I support that proposition, I support the Bill and I think the cotton growers in my State will welcome it.
– I support the Raw Cotton Bounty1 Bill 1968 which changes to some extent the basis of payment of the bounty. It was previously paid on cotton sold within Australia but now it is to be paid on the amount of cotton produced within Australia. This is quite important because our Constitution requires that any bounties must be paid on an equitable basis between the various States, and a bounty cannot be paid to- any particular area. It is apparent that because of the varying seasonal conditions and growing periods in Australia some areas would be placed at a disadvantage under the existing legislation, because the amount of cotton now being produced is more than that which can be absorbed by Australian textile mills. Some growers, therefore, would be placed at a rather peculiar disadvantage if the Government did not bring down this legislation. They would be forced to sell on the world market whereas their Australian competitors would be able to sell on the Australian market. If we examine the estimated world production of cotton we ‘realise that a difficult situation can arise. It is estimated that slocks of cotton on hand at the moment amount to 21.1 million bales, and estimated production figures for 1968-69 are as high as 52.7 million bales. This gives ah estimated total supply for 1968-69 of 73.8 million bales. This is a lot of cotton and regard must be had to it when we contemplate the development of the cotton industry in Australia. It is important to examine world production in deciding what should be done in respect of the Australian cotton industry.
The Bill will assist areas that are at a disadvantage in this particular year. The cotton industry in Australia is in its infancy and it is reasonable to expect that changes will be necessary - not only legislative changes like those provided for in this Bill to assist the industry, but changes of production technique and in production itself.
The general pattern for development in Australia, particularly in agriculture, is for production to be commenced with one crop and as an area develops for production of other crops to commence. The present cotton areas of Australia ultimately will produce not only cotton but other commodities as well. This, as I said, is the common pattern of development in Australia. A start must be made somewhere. First we utilise the soil and water, and whatever else is available to assist production, and then with experience further development takes place.If we discount the years when there have been adverse seasonal conditions, it is obvious from the figures we have already that there has been an improvement in cotton production over the years. This is to be expected if the industry is to be successful.
I have no doubt that as we expand these areas not only will cotton be produced but also other varieties of fibre and other crops. Throughout the world there is tremendous competition in fibres generally, not only in respect of cotton, and over the last few years there has been some falling off in cotton production. However, I note that America’s estimated cotton production this year is almost double last year’s production because of the good season America has been having. As we move into these new fields we must look closely at world trends and world production so that we are well informed as to what the situation will be. I welcome this legislation, which will help to get the cotton areas of Australia through this year.
- Mr Speaker–
– How much cotton do you grow?
– I happen to have two cotton spinning mills in my electorate and they both use Ord River cotton; so I am interested in this measure. Although the factories do not get the bounty, the cotton growers do and this makes it possible for them to sell cotton at a price that enables the Australian citizen to purchase his cotton undergarments a lot cheaper than he would otherwise. I would not have dared to intrude into this debate in defiance of the Whip’s strict instructions that each member keep his speaking time down to 5 minutes–
Motion (by Mr Erwin) put:
That the question be now put.
The House divided. (Mr Deputy Speaker - Hon. W. C. Haworth)
Majority . . . . 22
Question so resolved in the affirmative.
Original question resolved in the affirmative.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Nixon) read a third time.
Debate resumed from 24 October (vide page 2317), on motion by Mr Bury:
That the Bill be now read a second time.
– In some respects this is a rather curious measure and the Opposition intends to oppose it. The Bill is described as the Loan (Housing) Bill (No. 2) 1968. The Minister for Labour and National Service (Mr Bury), in his second reading speech, said:
The purpose of this Bill is to authorise the application of the proceeds of two loans recently arranged overseas for the purpose of making advances to the States for housing. The loans have been raised under agreements already signed by the Treasurer (Mr McMahon) which are identified in the Schedule to the Bill.
The Minister indicated that a sum of 200 million Deutsche marks, which is equivalent to $A44.6m in Australian currency, is to be borrowed. Also, a further loan of $US50m, which is equivalent to about $A46m. has been raised through the Export-Import Bank in Washington for the purpose of housing. The Minister went on to say that the loans have been authorised by the Australian Loan Council and implied that they have the authority of the State Premiers. He suggests that in all the Bill provides for the raising of$1 26m.
To begin with. I point out that the loan in Deutsche marks and the loan from the Export-Import Bank amount to about $91m. This leaves a surplus of about$35m which is not precisely identified in the Bill. We on this side of the Parliament suggest that we do not require international finance to provide housing in Australia. I point out that the White Paper on national income for 1967-68 indicates that the amount expended on private dwelling construction was $l,066m.The measure before us involves a sum of $126m, of which some $91 m is to be provided by external sources. The Opposition takes the view - and this is one of the reasons why we oppose the measure - that the Treasurer (Mr McMahon). on his trip around the world, just took the easy way of picking up the equivalent of$A45m in German currency and about$A46m from the. Export-Import Bank. Because he had no particular purpose with which to identify these loans, he has said that the money is to be used for the building of about 1 1 0,000 dwellings in Australia. This is an indication of the attitude of this Government towards the use of foreign capital.
We of the Australian Labor Party have never denied that in certain circumstances Australia may have to borrow from overseas. But what we have been careful to say is that when we did borrow we should try to identify such borrowings with the purpose of the borrowing. In this case there is no such identification. I do not think anyone on the other side of the House would argue that we could not have built more or less the same number of houses in Australia if we had not had recourse to these loans. To begin with, I would like to hear explained the proposition that this money is necessary to enable Australia to build the number of houses that it intends to build in the course of a year.
– Does the honourable member think it is a confidence trick?
– I think it is. There is another proposition in this Bill with respect to the minimum rate at which these sums are being borrowed, and this proposition has not been defined. I quote what the Prime Minister of Australia (Mr
Gorton) said in a statement on 19th September with respect to the loan from the Deutsche Bank:
The terms and conditions of the loan were settled with the approval of the Australian Loan Council.
I think it is about time that we got behind some of the subterfuge in relation to the Loan Council. What is the Australian Loan Council and how does it give its approval? In my view - and I have said this previously - the Australian Loan Council and the question of its giving approval mean nothing more than a pistol being put at the heads of the State Premiers by the Commonwealth. If any honourable member wants to argue to the contrary, I hope that he will get up and do so. The Prime Minister went on to say:
The securities will have an interest coupon of 6.25% and will be issued at 99.5%-
That is a discount for every $100 that is purported to be borrowed; you get only $99.50- to give a yield io maturity of 6.35%.
The first question I ask is: If the Commonwealth is borrowing, on behalf of the States, money for housing - ostensibly housing programmes could not be undertaken without it - and if the interest rate at borrowing point is 6.35%, although surely there are some handling costs beyond this, what docs this make the charge to the States and to the individual borrower, indirectly from the States? These matters are not denned in this legislation. But this is the interesting point and this illustrates the difference between the second reading speech made by the Minister for Labour and National Service and what the Prime Minister said on 1.9th September. The Prime Minister continued:
The net proceeds of the loan will be paid to the Commonwealth on 30th September. The foreign currency proceeds will be added to our international reserves and the Australian currency equivalent will be applied to the Commonwealth Government’s share of the 1968-69 works and housing programme approved by the Australian Loan Council.
In the first instance I ask: What kind of book-keeping goes on between the point of the borrowing at 6.35% and the point at which the money is loaned to the Slates and then reloaned to individual transactors? It seems to me that if the Government is suggesting that at the present time housing cannot be encompassed in Australia at a lesser rate than 6.35%, the Government is failing to understand all the difficulties of the Australian economic situation, as far as most people in Australia are concerned. It is true that we are building more houses per annum than we were 10 or 15 years ago. The Government claims that Australia is a growing country. It has a population of 12 million people. I think it is almost foreseeable that in the next 10 years, with the migration programme and the natural increase in population, Australia’s population will increase from 12 million to 15 million people. So surely, year by year, more houses must be built, even to cater for the population growth, let alone to clear what are called ‘slum properties’.
– The Government does not even catch up with the lag.
– As my friend from Gellibrand suggests, the Government does not even catch up with the lag. Will it catch up with the lag if it is going to finance housing at a rate of approximately 6.35%? I suggest that this measure is a subterfuge; it is a fiction. The Government is not borrowing this money for the purpose of providing housing. 1 would hope that the Minister for the Army (Mr Lynch), who is sitting at the table, or the Minister for Labour and National Service, who delivered the second reading speech on this Bill, will answer this in due course. Nobody can suggest that houses could not be built in Australia without recourse to the finance which is the subject of this Bill. The Bill is a curious measure because it provides for a loan not from one point but from two points, and the two loans are encompassed in the one measure. That seems to me to be a rather curious proposition, to say the least. The Government is to borrow Deutsche Marks from Germany, via the Deutsche Bank, and it is to borrow dollars from the United States, via the ExportImport Bank. Both of the loans are encompassed in a single measure. This Parliament is being asked to sanctify or to authorise the two loans provided in the measure because they are to be used for the purposes of housing. I would suggest, firstly, that all of the houses that Australia requires can bc built within the terms of our own economic resources. If any honourable member wants to contradict that statement I would be interested to hear his thesis. I am glad that my friend, the honourable member for Mitchell (Mr Irwin), an exbanker, is in the chamber. We talk occasionally about these matters. He says that he is well known in his electorate because he has financed housing. I hope that he will get up afterwards and try to justify this measure. The finance which he provided for housing did not come from outside Australia. I think that if he were asked he would say that it was provided from resources within Australia.
– It was not finance from the Deutsche Bank.
– He did not need finance from the Deutsche Bank or from any bank outside Australia to do this. I had some figures taken out recently which showed that over the last 15 years approximately $7.000m, which is near enough to one-third of Australia’s gross national product, has flowed into this country via capital transactions. On the other hand, some $4, 600m has flowed out of this country and some $ 1,600m of what flowed out would be reinvested. So in the last 1.5 years approximately $4.000m, which is a pretty substantial sum, has flowed into this country for various purposes. I think the critical point is that the Government, instead of facing up to the situation year by year, goes begging round the world to find where it can borrow money.
– It goes begging.
– Yes. I would suggest that if honourable members read the document that will be considered in the next hour or two when we consider the borrowing from the Export-Import: Bank of the United States they will see that the Government has been begging in pretty humiliating terms. They will see that instead of the document being framed in terms in which a sovereign government might address a private banker it almost appears as though the Commonwealth is a private banker addressing a sovereign government. Surely this is where we begin to join issue. 1 want to say as categorically as I can that the Australian Labor Party-
– Will the honourable gentleman tell us how he would meet the deficit in the Australian Loan Council financing if he were Treasurer?
– I will tell it line by line in my own way, with all respect to the exMinister. He has been behind the scenes and he is certainly well behind the line at the moment. All I am suggesting is that occasionally every country must ask itself-
– Are you going to tell us or not?
– I will not answer you at this stage. Ad hoc interjections are a little unfair, to say the least. All I suggest is that honourable members opposite must ask themselves as Australians: ‘How long can we continue to be borrowers?’ This Government has been a borrower, at least in net terms, for the past 15 years of about S4,000m. It should not continue to be a borrower to the same extent for the next 15 years. I hope it will not be in a position to adjudicate on this question for the next 15 years. Occasionally the Government should take stock of the situation. The Bill relates to a situation that I think is typical. Why does the Government have to borrow? I ask the honourable member for Higinbotham (Mr Chipp), who has been interjecting, to tell us why the Government has to borrow the equivalent of $A44m from the Germans and the equivalent of SA45m from the Export-Import Bank of the United Slates to build houses in Australia. The honourable gentleman can follow me in this debate, if he wishes to do so.. At this stage I am entitled to ask the question and I should not be interrupted by interjections.
– Will you give- some reply?
– Order! All interjections are out’ of order.
– All 1 ask is that someone on the other side justify the need for Australia, in view of expenditure .last year of S 1,066m, to borrow overseas S90m for housing. I will be interested tq hear some attempt made to justify this action, and I should also like to hear some attempt made to justify the rate of interest, which is near enough to 7%. In the next day or so the House will debate the new arrangements with the International Monetary Fund. These will create funds that can be borrowed at the equivalent of an effective interest rate of H%. How can the housing problem bc solved by foreign borrowing? One or two of my colleagues, I am sure, will show that we have sufficient resources in Australia to build all the houses that we need. What we do not have is the equitable adjudication that -would ensure that those who most need houses will get them first. Surely this is a question of interest rates. The Government may believe that the future of Australia can be built on an interest rate of 6% to 7%, but I do not agree and 1 do not think that any other honourable member on this side of the House would agree.
Apart from the dubious situation of building houses with foreign money, I would be interested to know how the Government will sift the money through to the States. The only houses that the Commonwealth can build are war service homes. According to the Minister, this money is being borrowed for the States. If the Government is borrowing money at about 6.3%, how will it sift the money through to the States? What bookkeeping entry will be required? This is the reason why we oppose the Bill. When we are debating one or two other measures that will come along later, we will state definitely our view on foreign borrowing. We do not say - I would like this to be noted - that in no circumstances should Australia resort to foreign borrowing. What we say is that in every instance where we do resort to foreign borrowing we should be careful to understand what we are doing and the purpose for which we are doing it. We believe that when we do borrow it is better to borrow for a limited period of years, on terminable terms - the borrowing on this occasion is an example - at fixed rates of interest rather than continue recent activities in which the Government has not worried about the foreign investments that came into Australia as long as they balanced the international accounts.
Broadly the situation in Australia at the moment is that, when we take the difference between our exports and imports and add the item called invisibles - that is, the payments for shipping, insurance and so on - we find that we are nearly $ 1,000m a year on the wrong side of the ledger. Instead of acknowledging this situation, the Government has been satisfied to think that it has put up a good performance if, at the end of the year, the international reserves have not fallen. This is the point at which the Government should occasionally take reckoning. The international reserves have not fallen because there has been a flow into Australia of what is called foreign capital. Actually foreign capital in these transactions means only that people outside Australia own assets in Australia to the extent of the capital that has come here.
– That is absolute humbug.
– The honourable member is probably a good judge of humbug. That may be why he is where he is instead of where he was. lt is all very well to say that this is humbug. I invite the honourable member and other honourable members opposite to rise in this debate and say how it is good for Australia to allow without question - 1 suggest that this has been happening - foreign capital of the magnitude of about $ 1,000m a year to flow into Australia. Occasionally the Government should look at the proportions. In rounded figuers we have a gross national product of $25, 000m. It may be a few hundred million dollars more or less. According to the statistics that we are given, a quarter of that amount goes into investment, public and private. The amount is about $6,000m. Proportionately, two-thirds of investment is private and one-third is public. This means that private investment is about $4,000m and public investment is about $2,000m. If we take out of private investment the investment on housing and buildings, we see that $ 1,000m is significant because it will be used to acquire assets in Australia’s basic economic structure. This is the point at which the Government should occasionally stop to take stock of the situation in regard to such basic things as oil. When oil was discovered in Australia we said that it was a great thing. But now when we take stock of who owns the oil we find that there will be an outpouring of dividends and a repatriation of capital almost as great as the amount we were supposed to save on the import of oil. Surely that will be the situation here. Why does the Government have to borrow this money? There is no purpose attached to it. To use a word that has already been used, I suggest that this measure is humbug. This amount of money is not being borrowed for the building of houses in Australia; it is for the purpose of accumulating Australian reserves overseas.
– You do not have to borrow to use your own materials, at any rate.
– This is the point. The Government should realise that certain things can be done in Australia without resorting to foreign assistance. If prefabricated structures which could be used in Australia could be provided only by Germany, and if the Government decided to purchase them and it raised a loan for that purpose, then that would be fair enough. However, this is nol the case. I ask the Minister for Labour and National Service, who used to assist the Treasurer, to say in what way Australia is assisted by this loan in housing construction. In my view it is just a contrivance.
– A thimble and pea trick.
– Yes. If the $45 m borrowed from Germany had been to purchase some capital structure that we could not finance ourselves, then it might be different. When the Treasurer went abroad he was disturbed about what his overall balance of payments might be in 12 months time. He considered that this was an easy way to get the equivalent of SA45m from Germany and the equivalent of $A46m from the United States. He said that this money would be used for building certain houses in Victoria. New South Wales, Canberra and the like.
The Treasurer himself has said that 90% of Australia’s capital structure is derived from internal resources and that 10% is only marginal. What I suggest is that the 10%, while it may be marginal, is more than marginally significant because it builds up industries such as the electronics industry, the oil industry and the mining industry. I saw some figures recently which suggested by 1972 the export of minerals from Australia will be of the order of $700m. I also saw a statement made by the chairman of Conzinc Riotinto of Aust. Ltd which suggested that by 1972 the mineral exports of that company will be $240m - one-third of the total. How much of Conzinc Riotinto is Australian owned? Who receives the benefit of Australia’s great boom in export earnings? These are the sort of things which the Government should ask itself. Onethird of this great boom will be in the hands of one great consolidation. Basically, is not that great consolidation using what might be referred to as the public domain of Australia and is it not exploiting it by the subtle contrivance of utilising foreign capital? Is not the Government, by this legislation, making such activity easier? These are the questions which it has to answer.
A very interesting leading article in the Australian Financial Review’ yesterday suggested that if the Government is not careful there will be a cutting off of trade. As 1 understand it, this is the subject of an argument between the Treasurer and the Minister for Trade and Industry (Mr McEwen). There is an argument in relation lo United States trade as against capital transactions. What an inflow of capital does is subtly to take over internal assets in Australia. I suggest that this is the point at issue here. Why does the Government say to this House: ‘Here is a housing loan with which to build houses in Australia. We had to borrow $45m from Germany and $46m from the United States’? The amount set out in the Bill is $126m. The rest of the money is left unexplained. The balance of the finance will come from internal sources. I suggest that basically the whole amount for housing will come from internal resources. What the Government has not explained is what it will do with the $91 m - the $4 5 m from Germany and the $46m from the United States. What will the Government do with that money when it gets it? it will not build houses, lt can shuffle this sort of thing around indefinitely. The Government should face up to how long Australia can continue to be about $l,000m down on current account. That is the situation as between exports and imports when the invisible items are taken into account, and of course they are required for export and import transactions. This country can either increase its exports or decrease its imports, or it can continue to rely on capital inflow.
These are the questions which Australia has to answer. We may think we can increase exports of minerals in the years ahead, but when we look at the way the Government has tied mineral exploitation to foreign capitalisation, what appears to be a credit item on current account becomes a debit when one takes into account the capital inflow. Some honourable members have said that there will be a day of reckoning. The Opposition suggests that the day of reckoning is much nearer than the Government thinks. In recent times measures have been introduced in this House as a means of feather bedding or giving concessions to people who can stand more firmly on their feet than Australia can. The Government provides many tax concessions. I see the honourable member for Mitchell (Mr Irwin) shrug his shoulders. I will be interested to hear what he has to say on this subject. We do not object to a certain amount of foreign capital coming into Australia.
– What is your limitation?
– Common sense and prudence, which I hope the honourable member used when he was a bank manager. If he had not used common sense and prudence he would not have got to his honourable years of retirement. Not only did he get to the honourable years of retirement in the bank but he also obtained elevation to this place.
– He did a very good job too.
– He probably did a good job. All I suggest is that he now become a watchdog for the Australian people, whom he directly represents, rather than for the limited section of. bank clients that he formerly represented and, I suggest, represented very well. I have a great deal of admiration for my friend. I think he has a lot more common sense than sometimes the Government exhibits.
We on this side of the House would not deny that Australia’s current living standards would not have been as great as they are without the inflow of foreign capital. That is a categorical statement. But we must remember that all of the foreign investment that comes into this country has to be repaid by way of profits. Surely as a former banker the honourable member for Mitchell knows there is a point beyond which borrowing cannot extend.
– That is the Plimsoll mark.
– Exactly. You get to the rising point and the sinking point. We are not at the rising point; we are at the sinking point. We are at the point where the repatriation of capital and dividends is becoming increasingly preponderant in our resources. That is why I ask the Government seriously to contemplate this situation.
– The honourable member is very pessimistic tonight.
– Occasionally you have to be pessimistic. Who could be optimistic while this Government is in control? This is an issue that we must argue over the next 12 months. I think you are entitled to be pessimistic at the present moment. The Government has gone around the world, not prudently but imprudently, trying to ascertain who is willing to lend money to Australia. I am sure that the honourable member for Mitchell would not have advanced money to a client simply because the client said that somebody was building a house across the road. This is what has happened here. The Treasurer (Mr McMahon) went to Germany. He did not have a particular project in mind. He said that we were building 100,000 houses in Australia and asked Germany to put up some money. But the money does not go into housing, as the honourable member for Mitchell knows. I will be interested in the Government’s explanation of the bookkeeping for this transaction. The honourable member for Mitchell would not advise his clients to borrow money at 8%, which they would be required to do if the Government first borrows it on their behalf at 64 % .
Does the honourable member think that Australia’s housing problem will be solved by tending money to home seekers at about 8%? I do not. I think that progressively we must lower interest rates. All that is being done at the moment is increase interest rates. We are paying 64-% on this loan, and the interest is not taxed by Australia. We remit the interest in total. If you borrow money in Australia at 64% at least the Commissioner of Taxation gets something in his net in consequence. But he gets nothing from this transaction. The money leaves the country cold. In 5 or 10 years the capital sum has to be repaid. If the honourable member for Mitchell thinks this is a reasonable financial transaction I will be interested to hear him say so later.
Soon we will be debating the Bill to approve a loan negotiated for Qantas. We suggest that Qantas is self-financing. It pays for its requirements in aircraft as it operates. The Qantas loan has been negotiated to enable the company to buy aircraft. It is not reality but fantasy for anybody to suggest that the money which is to be borrowed in Germany and from the Export-Import Bank of the United States is to be used to build houses in Australia. This is not prudence; it is subterfuge. When a Government resorts to subterfuge it deserves to be criticised. This is why we intend to oppose the Bill.
– I agree wholeheartedly with the honourable member for Melbourne Ports (Mr Crean). The Bill has for its purpose the authorisation of the Government’s borrowing abroad for the purpose of housing of $126m. In reality the money will not be used for housing. lt will not go towards the purchase of one item used in the construction of a house in Australia. The money will go to strengthen Australia’s overseas reserves, which are reaching a seriously low level. Our reserves are probably as low as they have been in the last 15 years. In 1952 our reserves fell to about $ 1,000m. The Prime Minister of the day pointed out that Australia was on the verge of international insolvency. The Government introduced panic legislation to restrict the flow of imports into Australia so as to safeguard Australia’s solvency abroad.
Today our overseas reserves amount to a little more than % 1.000m and they are rapidly diminishing. So the Treasurer (Mr McMahon) went to Germany and borrowed Deutschemarks. He also borrowed money in Switzerland and America. That money, of course, is not for the purpose that he has stated in this House; it is to strengthen the overseas funds of this country and to preserve the country from impending international insolvency. Why is it necessary to borrow this money? Why have the international funds of Australia sunk to such a level that they are as low relatively as ever before in history? It is because we have used them to purchase things. What have we purchased? We have purchased boots in Italy, tinned chicken in Chicago, packaged peas in Holland, clothing in Italy and. goods in Czechoslovakia.
We have gone to every country in the world and from every country we have bought these goods that could have been manufactured by Australian workmen in Australian factories. Because of the inflow of that capital, which can come to this country only in the form of imports, our overseas funds are being -eroded and we have to get loans or moneys of some description from overseas to stabilise or build up our overseas funds. That undoubtedly is Australia’s position today. The Treasurer (Mr McMahon) recently went abroad. He made a famous speech, a speech of which he is very proud, to an organisation called the Australian-American Association. He said to that Association:
We have viewed with some concern the measures taken by the United States authorities to restrain the capital outflow in the interests of balance of payments equilibrium. j
That is, he viewed the action being taken by the Government of America to curtail the flow of capital from America to this country with some concern, although America was apparently forced to take that action because it wishes to preserve equilibrium in its overseas operations. He went on to say:
However, in recent years, private investment from North America in companies in Australia has been running in the region of $250m to $300m a year. We should like to have more but, all things considered, we have not done so badly.
In 1 year $300m of capital comes in from America to help pay the grocery bills of Australia, and we think we should like more, according to the Treasurer. The peculiar thing about the speech to the AustralianAmerican Association was that the Treasurer went on to complain that there was an imbalance in the trading operations between Australia and America. He went on to complain that America was buying and had bought down through the years less from Australia than Australia had bought from America. He said that a vast adverse trade balance has been built up by Australia as a result of our trading operations with America. Of course it has. That has resulted because of the encouragement of the flow of capital from America to this country. If the Treasurer says he wants capital to come from America but does not want an adverse trade balance with America or imports to increase as a result of the inflow of that capital from America to Australia, he speaks in terms that are impossible of realisation. Capital can come from one country to another only in the form of goods. If we insist on getting capital from America to the tune of the $300m or more, as mentioned by the Treasurer, we have to import goods to the value of $300m or more in excess of the value of the goods we sell to America. That of course is the ABC of trading. It is clear and definite. But this Government goes merrily on its way. In the famous speech that I have quoted the Treasurer said:
In the course of my recent visit to the United States for example, 1 was able to conclude a number of loan agreements totalling, in all, some $US180m.
These included a $US50m loan from the Export-Import Bank, a $US75m loan from the Export-Import Bank to assist in financing aircraft, a $US53m loan from commercial banks in the United States to assist in financing four jumbo jets for Qantas Airways Ltd and a $US2.5m loan from the Export-Import Bank and the Boeing company, and so on. The Government seeks money from every country of the world, oblivious of the fact that an individual or a nation cannot get money that ultimately does not have to be paid back. The only money that a nation is entitled to get is money upon which it at least does not show a loss. If it can show a profit, all the better. If it can break even, well and good. But if it shows a loss, that is undesirable. If the interest and the cost of servicing this capital obtained abroad amount to more than the capital earns when it comes to this country, it is undesirable to get it. Yet that is what this Government has been doing. It is not concerned with the cost.
The honourable member for Melbourne Ports (Mr Crean) pointed out that the cost of floating the loan of 200m Deutschemarks would mean that Australia would have to pay more than the 6.35% interest on the money coming into this country. He also pointed out that this interest payment will be free of taxation in Australia. That means that on a loan of 200m Deutschemarks, the equivalent of $44m, the interest earned at the rate of 6.35% would be over 12m Deutschemarks per year.
– He also said that he agreed with the principle that we have to do some borrowing.
– That is right. I agree with those remarks too. I agree that if a person has been taking cocaine for a considerable length of time he does not give it up immediately. He cannot. He would die if he did. Similarly, the Government has to continue its practices, obnoxious as they are, but it should reduce them so that ultimately we can live upon our own production in a period of the greatest prosperity of this nation. When the nation is passing through a period of prosperity unparalleled in history we should be able not only to pay off our loans but to make loans to other countries. We could transform ourselves from a debtor nation into a creditor nation. That is what any ordinary business organisation would do if things were prosperous. The honourable member for Melbourne Ports has pointed out that the interest rate of 6.35% on this loan is free of taxation in Australia and that if this loan were raised in Australia at the same rate of interest the taxation would be equivalent to at least one-fifth of the total interest, which would be payable in the first year. That, of course, is a great consideration.
Here we are borrowing abroad and paying a rate of interest that is greater than the rate payable in Australia, and the interest is free of taxation in Australia. That is a very serious state of affairs. But the position is even more serious than that. The Deutschemark loan was raised at the rate of 6.35% free of taxation but debt floatation charges are payable on top of that. The issue of 200 million Deutsche marks is equivalent to $A44.6m. But a total amount of $A126m was required. As the honourable member for Melbourne Ports has pointed out, a further amount of about $A80m was therefore required for the loan that was ostensibly being raised for housing but which in reality was being raised in order to strengthen Australia’s overseas funds. That sum was raised in the United States of America. The Export-Import Bank has agreed to lend the Commonwealth $US50m, which is equivalent to $A44.6m, at an interest rate of 7% per annum, plus floatation charges. So, the loan raised in the United States is even more onerous in its conditions than the loan raised in Germany.
The Australian Labor Party emphatically states that this type of loan raising is undesirable. The Labor Party does not want honourable members opposite to get up and say that the Labor Party generally is opposed to loans being raised for the promotion and development of this country. It has never said that. What the Labor Party has said is that it is not in favour of loans being raised on all and every possible occasion for all and every possible purpose merely to finance the inflow of imports from other countries of the world. The boots and clothing imported from Italy, the packaged peas from Holland, the exotic foods from America and the textiles, furniture, toys and other articles from various countries of the world are in reality being financed by the loans that this Government has the audacity to come before this Parliament and claim are loans raised for the purpose of building houses in Australia. The loans will not go towards the building of one house. But as I said earlier, they will rehabilitate the overseas funds that have deteriorated as a result of paying for the goods, textiles, furniture, toys and manufactured articles of every description that are flowing into this country in unprecedented quantities because we have a government which gives to other nations concessions of every description that enable them to put upon our market goods in greater quantity than previously and at prices less than Australians can compete with.
– We subsidise them.
– As the honourable member for Gellibrand has pointed out, we are subsidising these countries to market their goods in Australia and in that way we are preventing the expansion of our own industrial undertakings. We are subsidising the retardation not only of primary industries in Australia but also of secondary industries. I think I have made my case particularly clear. I promised the honourable member for Ballaarat (Mr Erwin), who is the Government Whip, that I would not take more than 20 minutes, so I will resume my seat.
– The honourable member for Melbourne Ports (Mr Crean) and the honourable member for Scullin (Mr Peters) have dealt very adequately with the question of overseas borrowing, but some further comment in passing is merited. The whole of this transaction has a rather alarming flavour to me. It reminds me of similar borrowings overseas 40 years ago, prior to the great depression. It might be described as part of the financial rake’s progress of the Government. When the Vernon Committee’s report was presented to this House 3 years ago it was very quickly shoved under the carpet because it stated that in 1974 the point would be reached where the inflow of overseas capital from various sources would be exceeded by the outflow of remittances to service that capital. These loans will accelerate the process. As the honourable member for Scullin has correctly pointed out, this money is not being borrowed for housing. It is being borrowed to add to Australia’3 dwindling resources of foreign exchange. That being so, it is worthwhile having a look at just what is happening.
As the honourable member for. Melbourne Ports has pointed out, there is in fact no more than a 10% investment gap. There is not the slightest doubt that with a little mobilisation of Australia’s present financial resources we could do better than we are doing. The Treasurer (Mr McMahon) recently visited Europe and other countries, literally as a mendicant. The terms of the present transaction are humiliating and extravagant. The rate of interest is almost a record. The Treasurer obviously made a beeline for Europe because the West German Republic has staged a remarkable recovery from the devastation it suffered during World War If. The Deutsche mark is a hard currency today. It is a welcome addition to Australia’s reserves from the point of view of the Australian Treasury. But the part that concerns me is the very shrewd subterfuge to hide the reality of borrowing to add to our overseas resources. What better way could there be of sugar-coating the pill for the consumption of the Australian taxpayer than to suggest that the borrowing is for the purpose of housing? That is a most laudable purpose, lt is a good vote winner, too. In fact the money is being borrowed for an entirely different purpose. However, that Is not the point at issue on this occasion.
The point at issue is that the money will be nominally for housing, and the whole record of this Government in relation to housing loans made lo the various statutory authorities in the different States has been one of progressively increasing interest rates. Should the situation arise, as it undoubtedly will, in which the Government wants to give another turn to the screw of interest rates it will, with a perfectly straight face and its tongue in its cheek, say to the States: ‘Look at what we had to pay in interest - very close to 7% - to get some money for housing. In the past we have been quite charitable. We have been prepared to advance you money for housing at 1% less than the long term bond rate. Now you will have to come through with more - and very substantially more.’
Let us look more closely at the history of the transactions between the Commonwealth Government and the States. In 1946 under the original Agreement money was advanced at 3%. In the Agreement with five of the States - one of them did not come to the party at that time - there was a stipulation that all necessary funds would be made available. Above all, there were concessions for pensioners, the people most in need of low rental housing. But in 1956, when the Agreement had ended after 10 years and when a new Agreement had to be negotiated with a Commonwealth Liberal Government, immediately the screws were given a very substantial turn. The States were told: ‘Very well, you will get the money but it will have to be at an interest rate ))% higher.’ There were no concessions, of course, for pensioners. In New South Wales, thanks mainly to poker machine taxation, successive governments have from time to time been able to do something for the pensioners, but it has been very little indeed. Their case is a most urgent one but naturally this Government has turned the deafest of deaf ears to it. In 1956 also, just for good measure, the Government insisted that 5% of the homes built under the terms of the Agreement be made available for defence personnel.
I want to refer now to the general question of overseas borrowing. Of course, we frequently see instances of death bed repentances, and it was noteworthy that last Saturday the Federal Treasurer came out wilh a most laudable onslaught on the United States, suggesting that in future something would have to be done to correct the imbalance of trade between that country and Australia. He is pretty late in saying it, but there is more joy in heaven over the one sinner who doth repent than there is over the many just persons who need no repentance. Certainly in the whole of this Government’s overseas borrowings there has been at no time any suggestion of reciprocity or the possibility of paying for money borrowed, in whole or in part, with exports of Australian manufactures and commodities. In fact, the position has been just the opposite. This Government has embarked on a rake’s progress. It has been the greatest spender, without strings attached, of any of the major democratic governments in the world today. It is worth placing on record again a comment which was made by the Leader of the Opposition (Mr Whitlam) some 3 years ago. He said:
The Australian paradox in housing is that the authority which accepts the greatest responsibility for housing and allocating funds in this field docs not accept a parallel responsibility for planning the use of these funds. There has been no thoroughgoing review of Australia’s housing needs and likely trends since 1945, prior to the introduction of the Commonwealth and State Housing Agreement. We have a situation where the Commonwealth is in a position to regulate as much as 90% of housing finance in Australia today, yet it takes no responsibility for the cost of the land and of the house itself. Housing has become an instrument of general economic policy rather than part of a planned and relatively predictable programme.
It is interesting, too, to see at the table the Minister for Labour and National Service (Mr Bury) who represents in this chamber the Minister for Housing. I remind him of a comment he made some years ago when he said:
To damp down housing because of undue expansion in other sectors of the economy may distort our ultimate priorities for survival.
In actual fact housing has been used for many years by this Government as an economic regulator. Whenever it has been considered, in the free-for-all system of private enterprise, that the economy was becoming over-heated, immediately there has been a curbing of funds for housing. That stop-go policy has been a feature of this Government’s administration through the years. If the Minister were prepared to be quite frank I am sure he would agree with me about this because he has had experience of the effects of this policy. The Government’s attitude, of course, is to leave private enterprise alone and then everything will be for the best in the best of all possible worlds.
In Australia there has, of course, been a housing shortage ever since the first fleet landed in Botany Bay. The shortage has been intensified at various times. Coming to fairly recent times, it was intensified by the complete cessation of construction during World War II. It was intensified again by the inflow of immigrants after World War II. No doubt the Minister will be claiming credit for a very substantial increase in house and fiat construction as shown in the September statistics. These tell us that construction is now running at the rate of about 150,000 units a year as compared with about 120,000 at the same time last year. In actual fact this boom has been due to the people who were born in the highly fertile immediate post-war years of 1946 to 1948 and who are now starting home making. These are the people who earlier created an education crisis and who are now passing into the work force, who are marrying and rearing families. Of course the choice that faces the average young couple today is whether to marry and have a family or to purchase a home, because with the interest rates that are being charged today they will not have the opportunity to do both.
In 1949, when this Government came to office, the Commonwealth Savings Bank was advancing money at a rate of 31%. Today the rate is either 5)% or 5i% - I am not sure whether the extra i% has yet been added on. The interest payable on the conventional loan of $7,000 over a 30 year term, working on present day interest rates, is some $1,850. The addition of the extra i% on the same loan over the same term will add $300 to the interest bill.
I do not want to delay the House unduly, but I want to refer it particularly to a table prepared by a Mr Gman, an economist of the Rural Bank of New South Wales, which shows some startling increases in the amounts being charged for first mortgages on real estate. In 1956-57, 23% of all money advanced on mortgages on real estate was at the rate of 7% or more, scaling up to as much as 20%. By 1964-65 no less than 66.4% - two-thirds of the total - of all money advanced on real estate mortgages was at interest rates of 7% and up to 20%. The average, in fact, was of the order of 9%. If Australia is to progress and develop one of our first priorities will be housing. When the next federal election comes around we will find this Government going out and proclaiming with a great blast of trumpets what it will do for the people in the way of housing. As a matter of fact the Government has, over the years, put the brakes on housing in every possible direction. It has done it, firstly, by its failure to control interest rates. The main contributing factor to the increases in interest rates has been its utter failure, its inability and its refusal to control hire purchase borrowing and lending and the rates of interest charged. Further, it has made no attempt whatever to control land costs. Whereas pre-war from 10% to 15% of the total cost of a home represented the cost of the land, today it is of the order of 30% to 35%. I have heard the Minister for Labor and National Service say - I give him great credit for this - that there is a need for some standardisation of building regulations by the different local governing authorities in Australia, lt is true that we cannot get a complete standard because of variations in climate in the tropical, temperate and sub-temperate zones, but fundamentally a very big improvement could be made in this field.
Another matter that merits the closest attention of this Government is the ensuring of an even flow of money for housing. The Master Builders Association must be given credit for pointing out repeatedly that unless there is a continuity of finance and a planned programme for housing construction it is impossible for members of the Association to carry on in a normal fashion. If apprentices are to be trained, if building teams are to be kept together and if the most efficient job is to be done, there will have to be a continual flow of money. If Australia is to meet the problems of the future - the main problem of Australia is that we must populate or perish - the Government must do better than it has done in the past in the field of housing construction.
– in reply - I should like to refer to some of the comments that have been made, and perhaps I might start with those of the honourable member for Scullin (Mr Peters). This Bill is concerned with the application of funds recently borrowed abroad very successfully by the Treasurer (Mr McMahon). I think 1 do the honourable member for Scullin no injustice when I say that he is heavily seized with zenophobia, and the very thought of foreign capital produces a reflex action which makes him spit chips. He does this in a most picturesque fashion. His attitudes are well known, and he is even an author on this subject. He has gone into print. Recently he revised his work in a new text.
– lt is a best seller.
– I hope, indeed, that when a member of this House does go into print it leads to some financial success for him, which otherwise it is all too difficult for members of this House to enjoy. 1 pass now to a quotation by the honourable member for Melbourne Ports (Mr Crean) who referred to some remarks that the honourable member for Gellibrand (Mr Mclvor) made in this House not long ago. I should like to repeat one or two things that I said then in reply to the honourable member for Gellibrand, because it was suggested by the honourable member for Melbourne Ports and subsequent speakers that somehow the Government had not only fallen down on the housing job but that the position was getting worse. 1 shall quote figures, which I had to grab rather quickly for this occasion, to show that somewhat the opposite is the case. In 1957-58 dwelling unit approvals amounted to 84.000 whereas in 1967-68 they numbered just over 132,000 - an increase of 50%.
– That is only a book entry.
– The honourable member may say that these are 2 years picked at random. This is true, but I think they reflect the general story. In 1965-66 the figure was 110,000.
– They are only approvals.
– I am comparing approvals with approvals. I will readily agree that not every dwelling unit approved is subsequently constructed, but the ratio of those approved to those constructed remains fairly constant through the years. In 1965-66 there were 110,000 approvals; in 1966-67 there were 120,900; and last year, 1967-68, there were 132,000. This increase is very much greater proportionately than the increase in population, even after allowing for immigration. So steady inroads are being made on the backlog and year by year the housing situation in Australia is becoming more favourable. Let us analyse how this has happened. As the honourable member for Scullin said, we now enjoy a prosperity never surpassed in our history.
– That is what you said. I was quoting you.
– Indeed. I wish the honourable member for Scullin would think deeply on some of the causes and how this prosperity was induced. He implies that this has happened only because we have borrowed so much from abroad that we are leading a kind of rake’s progress, rustling up every coin we can and laying up terrible debts for the future. May I come back to the honourable member for Melbourne Ports who again expressed, as he does in eloquent terms, the general standpoint of the Australian Labor Party on these matters. He asked the question: Is this loan really for purposes of housing? I thought 1 gave some explanation of this briefly in my second reading speech when I said:
While authority already existed for the Treasurer to sign the agreements and for the funds to be borrowed and to be transferred to Loan Fund there was no suitable appropriation at the time for advancing the proceeds to the States from Loan Fund.
I said that this was because the Loan (Housing) Bill 1968, which we have subsequently passed, had not then been passed. This huge volume of housing construction, which per head is about the highest in the world and represents a tremendous economic effort, has been made possible only because of the amounts of capital, including overseas capital, which have accrued and have been fitted into the rest of the economy. But for the activity which has been induced, and the new assets which have gone into the economy and which have derived from foreign investment, the volume of housing construction today would be very much lower than it is.
So I take the general thesis of the honourable member for Melbourne Ports: This is borrowing which underpins the Australian economy as a whole, out of which a very large investment is made annually in housing. It is therefore an extremely appropriate direction into which to put the proceeds. Although the interest rate overseas is fairly high, it is much lower than that at which other countries can borrow on foreign terms for the most part. These terms, in fact, do reflect Australia’s creditworthiness at a time when world interest rates are very high. But the rate of interest on these moneys charged to the States will be around 4.4%. They will acquire these funds at the usual rate of roughly 1% below thelong term bond rate.
We now come to the core of the matter - whether or not we should be borrowing funds overseas on a large scale. It is sometimes said that we pay high interest rates or dividends overseas. It is said that high profits are derived by overseas interests from the use of foreign capital in Australia. But the foreign borrowing by various companies throughout Australia has resulted in the creation of assets which are in themselves large earners of overseas income in the long term. Overseas enterprise has been called in to help us. The honourable member for Melbourne Ports mentioned Conzinc Riotinto of Australia Ltd. I think that in essence this concern is Australian run; its operations in Australia are very much Australian. If great assets had not been brought into production by this complex, our capacity to finance our future would have been very much less. Whatever people say, the minerals that have been lying around for hundreds of years are assets. What could we have done with these minerals alone and unassisted from outside?
In the process of using moneys from overseas we have built up a higher income. On a different scale we have been doing very much the same thing as was done by the honourable member for Mitchell (Mr Irwin), who has been described as a distinguished banker. Let us see what he did. He lent funds to his clients, who used them to create assets which raised their income. In the process they grew richer, and they acknowledged his contribution to their happy and prosperous state by electing him to this Parliament in his extremely vigor ous retirement. They would go a long way before they would get a person of better character who could represent them more effectively in this place. The honourable member’s clients became prosperous by borrowing, and this is what Australia is doing. The United States of America, the most prosperous country in the world, went through a period of many decades in which it borrowed heavily from Europe, and from Britain in particular. In the process, it created assets. It developed as a nation and created an economy that is unmatched in the world. So, steadily, year by year, under current Government policy, we are building up our economy by importing the kind of capital resources that we cannot produce ourselves. In the process we have achieved a state which I trust will lead, unless forces beyond our own control overcome us, to what the honourable member for Scullin described very aptly as prosperity never surpassed in Australian history. I support the Bill.
That the Bill be now read a second time.
The House divided. (Mr Deputy Speaker - Mr Lucock)
Majority . . . . 25
Question so resolved in the affirmative.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Bury) read a third time.
Debate resumed from 24 October (vide page 2318), on motion by Mr Freeth:
That the Bill be now read a second time.
– There being no objection, that course will be followed.
– Three measures are being debated cognately. The Opposition gives support to two of them, but we intend to move an amendment to the first Bill in line, which is the Loans (Australian National Airlines Commission) Bill 1968. 1 move:
That all words after ‘That’ be omitted with a view to inserting the following words in place thereof: whilst not opposing the purchase of new aircraft by the Australian National Airlines Commission, this House is of opinion that the financing of the purchase of the aircraft should be met from revenue and not from loans raised overseas”.
The three measures that are before us have somewhat distinctive features about them. The first measure refers to the Australian National Airlines Commission, which is more commonly known as ‘Trans Australia Airlines’. It proposes that a sum of 9,900,000 Swiss francs, which is the equivalent of $A2m, shall be borrowed from the Union Bank of Switzerland and that a sum of $US2,490,040, or $A2.2m, shall be borrowed from the United States ExportImport Bank for the purchase of a Boeing 727 jet aircraft and related equipment. This makes a total of $A4.2m. The Opposition’s view on this Bill is that it should be a pay as you go job. Finance is negotiated at an interest rate somewhat equivalent to 6i%, but when we take into account a borrowing charge or an underwriting fee of 1.5%, the interest rate becomes more than 7%. In view of the fact that, according to the Government, Australia’s reserves are of the magnitude of $ 1,000m, our view is that it would be much more prudent for the sum of $4.2m to be bought off the hook, as it were. When the aeroplane is ready for delivery we should pay cash for it. That is why I have moved the amendment.
The second Bill, the Loan (Qantas Airways Limited) Bill 1968, is a measure of somewhat greater magnitude. It proposes that a sum of $US53m or $A47.3m, be borrowed, again from the Export-Import Bank, the Boeing company and a syndicate of United States commerical banks. The money is to be used to purchase jet aircraft and related equipment for Qantas Airways Ltd. 1 understand that the aircraft are described as jumbo jets. I do not want to go into the technicalities of the jumbo jets. I know that some of my colleagues regard this loan as a rather premature undertaking. The jumbo jet, as yet, is an unproven venture. 1 do not want to go into the details of the aircraft because, as 1 have said previously, [ scarcely know one aircraft from another. The only aircraft I know is the uncomfortable Fokker Friendship. I know that aircraft because when I sit in it my knees are up under my chin. Otherwise it is difficult for me to discern an Electra from a Viscount or a Viscount from a Boeing 727. Apparently the jumbo jet is a much larger aircraft altogether. There seems to be some doubt as to whether, in view of Australia’s economy, it is really a wise venture to purchase jumbo jets. 1 rely upon the technical advice of Qantas, which has sanctioned this loan, when I say that so far as passengers and freight are concerned, probably the jumbo jet is a reasonable enough proposition. We do not oppose the financing of the Qantas venture by borrowing, and this is why I would hope that from time to time we can distinguish our attitude on this question of borrowing. Here is a proposition which finances itself as it goes. Qantas earns its own keep because it is an international airline. lt earns dollars and sterling and other foreign exchange, by reason of its undertakings. At least it pays for itself as it goes. The loan which is being raised on its behalf is different to the loan being raised under the Loan (Housing) Bill (No. 2) that we were debating a few minutes ago, which has no relation at all to the question of housing. As regards the Bill relating to TAA, as I have said, the loan is so trivial, by comparison, that, in common with other members on this side of the chamber, I believe that a nation should distinguish between annual outgoings and capital transactions. When the aircraft for TAA became available for a sum as low as $4.2m, the Australian Government should have made available to TAA the necessary sum to pay cash for the aircraft and in turn TAA could have paid it off in internal currency. The loan for Qantas is a very much different proposition.
I would hope that occasionally the House would distinguish between these kinds of borrowings. I know it is easy to say sometimes that there should be no foreign borrowings. On the other hand, there is a tendency to say that if the Government can put its hands on the money overseas, it should do so and put the money into its till. I regard that as a rather imprudent form of finance.
The third measure that is before us provides for the ultimate underwriting by Australia of the purchase of a jet aeroplane by Ansett-ANA on terms similar to the purchase by TAA. Here again we have an example of our peculiar two airline policy. I should like to say a few words about the two airline policy and the so-called rationalisation of aircraft operation. AnsettANA does not have the same recourse to finance as the Australian Government has. lt must make its own arrangements and those arrangements apparently are made in parallel with TAA. If one decides to buy an additional jet, the other must have an additional jet, too. TAA has government finance behind it and Ansett-ANA must go on the open market in the United States to obtain its finance. When it raises this finance, if it has behind it the fiat of the Australian Government, no doubt it can borrow on more respectable terms than it could if it were left to make its own arrangements. We offer no objection to that proposal.
This is one of the few occasions on which we can speak about the two airline policy. The other evening I was returning from the very pleasant city of Armidale in New South Wales. It is in an area called New England, which is represented by the Minister for Shipping and Transport (Mr Sinclair). I found that if I left that pleasant city at 6.45 p.m. or 7 p.m. I would arrive in Sydney at 8.35 p.m. Despite the vaunted service every hour on the hour, nothing left Sydney on that Friday evening after 8 o’clock. However, by some chance of fortune over which I had no control, it was Derby eve and special flights were going from Sydney to Melbourne. I arrived in Sydney in fact at about 8.45 p.m. and just missed one of the special flights. Ultimately I travelled on a TAA Viscount service that left Sydney on a special flight at either 10 p.m. or 10.30 p.m. The aeroplane carried only two passengers beside myself and six air hostesses. I am past the time when I get excited by that kind of anticipation.
– lt must have been an exhilarating experience.
– One can be exhilarated in odd ways and the older one is the odder the experience. All I am suggesting is that it is time a little bit of rationalisation was applied outside to what is called the rationalisation inside. Every week when we come up from Melbourne to Canberra an Ansett-ANA flight leaves at 7.55 a.m: and a TAA flight leaves at 8 a.m. As I understand it, no other flight comes to Canberra from Melbourne for another 3 hours. If that is rationalisation of air services, I certainly do not agree with it. It may be that each airline is suspicious of the other. One departure time may be considered more advantageous than another. It may be that 8 a.m. is a better departure time than 9 a.m. and the airlines are not willing to take the risk of one getting an advantage by leaving at 8 a.m. while the other leaves at 9 a.m.
– They could have it week about.
– Exactly. 1 was about to suggest that they could have it week about or day about and occasionally that arrangement should be tested. 1 believe that ultimately, in terms of the basic satisfaction of Australia, there is room for only one airline service. But I will not argue that point tonight. Similarly, I believe that the pipelines for transferring oil should be regarded as public utilities rather than private advantages and should be subject to control. It is time that the public was a little more critical than it is of the airline services that are available. Undoubtedly the cream of the airline services is the trunk service from Sydney to Melbourne, from Sydney to Brisbane and from Melbourne to Adelaide. We have the absurd situation that two services are available within 5 minutes of each other. We should have a service between Sydney and Melbourne almost every hour. I cannot understand why two services must be provided at one hour instead of one service at alternative hours.
J do not argue about the relative quality of the services. If no TAA service is available, I do not sit down for a day and say that I will not travel by Ansett-ANA. 1 travel by Ansett-ANA if it happens to suit my convenience. But it is rather absurd to find that two aeroplanes leave at about the same time. This happens in Canberra every Friday morning. When I first came here in 1951 a very pleasant flight left at about 9 a.m. and arrived in Melbourne at about 1.0.30 a.m. Now for some unknown reason we all must get up after a late night to catch an earlier flight. We have suspended the 1 1 o’clock rule and we could well finish on Friday morning at 2 a.m. Nevertheless we must all get up to catch an aeroplane that leaves at 7.45 a.m.
– It leaves at that time so that we can get home too.
– That is all right, but why do TAA and Ansett-ANA have to leave within a few minutes of each other? We have a more pleasant terminal building at Canberra than we used to have and I wonder how we managed with the old building when I see the building that is there now. 1 think we should occasionally inquire about the matters that 1 have just raised.
As I have said, we intend to oppose the Bill that sanctions the borrowing of money for TAA not just because we think that TAA and Ansett-ANA should not have another jet aircraft but because the amount that is required by TAA could be financed internally by providing the loan out of the reserves that have been accumulated. Instead of bearing interest at about 7%. the loan could be financed internally between the Commonwealth Government and TAA at an interest rate of about 5i%. The interest would then be retained in Australia, but interest on a loan raised outside Australia is an additional burden. The second Bill provides for a loan for Qantas Airways Ltd. T understand that one of my colleagues will present an argument about the practicability of the jumbo jet. I do not want to become involved in that argument now. However, this loan over its life does finance itself; it earns foreign exchange. I pay a tribute to Qantas. It is the best airline service in the world and I hope that occasionally we will have the same vision about an Australian shipping line as we have about an Australian airline.
– If we had a shipping line you might get a job as a purser,
– If 1 was the purser the honourable member would make a very good head waiter. After December next year we may be in that category. In the years when the establishment of an overseas shipping line was a possibility, if Australia had had the same vision as we had under a Labor government in relation to an international airline we would now have been in a much better position in relation to our international trade. Unfortunately 1 have not the figures available, but I think that the capitalisation of Qantas Airways Limited is now about $200m. Over a period of years we probably could have had five times that amount invested in international shipping if we had had the vision. I hope that in the future we will1 take the view that we ought to have an overseas shipping line of our own. This country is one of the principal trading nations in the world. Our exchange of exports and imports annually is of the magnitude of $6,000m, and I think that even though we are only a very small nation in terms of population we are in the fifth or sixth position in relation to international transactions in goods. But very few of those goods are carried in our own ships. T do not use the term ‘bottoms’ which my colleague, the Leader of the Opposition (Mr Whitlam), uses.
– I think that is the most ridiculous thing he has ever said.
– However, it is an historical term. At least our shipping is inadequate, whatever else it may be. The Opposition offers no objection to assisting Ansett-ANA in terms of the two-airline policy. Some day the Opposition might rationalise this arrangement in its own way. Nevertheless we accept it as it is, and we accept the fact that there should be equal access to the purchasing of aircraft. Trans-Australia Airlines has government backing. I think it is fair that the Government should underwrite Ansett-ANA’s access to foreign loan markets, because I am sure this means that that airline is able to obtain the advantage of loans at a lower rate of interest. One of the difficulties of two airline policy is that it is conditioned by what Mr Ansett wants rather than by what the Australian public wants. This is a most unfair approach. But the Opposition has no objection to the Government underwriting such loans if he can borrow at perhaps 1% or 2% less than he otherwise could. It is not Mr Ansett who pays the money; it is taken out of the hides of the Australian public. If the Government underwrites these loans, then at least the advantage is transmitted to users of airlines throughout Australia.
– Is Mr Ansett a representative of the overseas shipping owners?
– I hope that he is not a representative of overseas shipping owners. I do not detract from the quality of his service; but if we had one major internal airline in Australia the profits derived from the cream of the service, say between Sydney and Melbourne, could be used to open up the internal areas of Australia. In many respects it would be much more economical to have only one service. I sometimes think that if it had not been for TAA places in the centre of Australia would not have been blessed with airline services at all. The opening up of the centre was made possible only because profits made by TAA on the more fruitful routes between capital cities were utilised to provide services to the inland. If the honourable member for the Northern Territory (Mr Calder) were here 1 am sure that he would agree that one of the things that has made life in the centre of Australia more tolerable is the access to airline facilities. These facilities were pioneered by TAA, and I am sure that when it first operated there the services were not profitable, but I am sure they are now.
Mr DEPUTY SPEAKER (Mr Lucock)Is the amendment seconded?
– I second the amendment and reserve my right to speak at >a later stage.
– The Government has suggested that the Loans (Australian National Airlines Commission) Bill, the Airlines Equipment (Loan Guarantee) Bill and the Loan (Qantas Airways Limited) Bill be debated together and the Opposition has agreed to this course. I can see the wisdom of this and I agree with it. This debate affects our two-airline policy on the one hand; and on the other hand it affects our overseas airline, which is not part of the two-airline policy. The honourable member for Melbourne Ports (Mr Crean) in his praise of Qantas Airways Limited, which would be supported by honourable members on this side of the House, said that it was a pity the Government did not go into the shipping business in the same way it had gone into aviation. I can understand his saying that, but I think we would have had a much greater chance of achieving it if Judge Foster had not handed down his award for seamen which was instrumental in Australian passenger ships completely disappearing from our coastline. If a person wants to travel round the Australian coastline now he has to travel on a British, an Italian or a Greek liner.
The honourable member for Melbourne Ports referred to the rationalisation of air services. The more one looks at rationalisation the more one can understand why airlines permit aircraft to depart at the same time. I recall that during an inquiry in Adelaide into an extension of the airport terminal the first thought of the Public Works Committee was that if the services were staggered there would be no need for an extension of the terminal. Each airline in turn was asked what it would do if it had complete control over all the business, that is, if there was only one airline operating. The answer from both airlines was that they would send out two Boeings at the same time because this was what the public needed, lt is all very well to have someone in Adelaide say that he would like to go to Sydney 2 hours after two planes had left, or for someone in Perth or Sydney to say the same thing. The fact is that somebody in Geraldton or Kalgoorlie who is going to Townsville has to fit into a trunk route network. This means there must be rationalisation of the services in order to reach one’s destination and for the airlines to use the aeroplanes profitably. Aircraft on the ground do not earn money. The more you look at the situation the more you can sympathise with the companies. They do not refuse to stagger their operations simply to annoy the travelling public. After all, they are out to please the travelling public for without the travelling public they are out of business in this rationalised two airline competitive system.
The honourable member for Melbourne Ports mentioned jumbo jets. I have given a good deal of thought to the introduction of these aircraft. I think that sometimes in civil aviation we are guilty of trying to keep up with the Joneses. What happens when a manufacturer produces a new aircraft and sells it to an airline company? Immediately every other airline operator wants the same aircraft. As I recall, the Boeing 747 will fly only 30 or 40 miles per hour faster than a Boeing 707. Admittedly it can carry three times as many passengers and three times as much freight as a Boeing 707. On most occasions a passenger can obtain a seat on a 707 flying from Sydney to Honolulu, San Francisco or Singapore. It would appear that somebody produced a bigger aircraft and every airline operator decided to have it. It may be said that Australia need not have bought the 747. lt may be argued that we can carry in three 707s as many passengers as we can carry in a 747 and that we have the 707s to do this The simple fact is that we have had to plan to equip our airports to be able to cater for the 747 which other airline companies will operate. So I get back to keeping up with the people who have these things, if I may express myself in that way rather than suggest that we are keeping up with the Joneses.
– Keep mentioning my name, lt is good electoral propaganda.
– I know that the honourable member for Newcastle would like me to refer to the Newcastle Joneses. I do not mind. It illustrates my point. Here we have a problem which the Government must meet with ever-increasing expenditure. 1 do not think anybody can object to our borrowing money overseas to equip Qantas because Qantas with its highly successful overseas operations has been a big earner of overseas funds for Australia. It may be said that the borrowing of funds overseas for Qantas has been an investment for the nation.
The Minister for Air (Mr Freeth) in introducing the Loans (Australian National Airlines Commission) Bill made several points, as did the Minister for Civil Aviation (Mr Swartz) in introducing the Airline Equipment (Loan Guarantee) Bill. I hope that a member of the Opposition will give us some more detail concerning the amendment moved by the honourable member for Melbourne Ports. The amendment states that the financing of the purchase should be from revenue and not from loans raised overseas. Does the Opposition mean that an interest free grant from Commonwealth funds would be made to Trans-Australia Airlines for the purchase of new equipment? This is not spelt out in the amendment. Even if you provide this amount from revenue some arrangement has to be made to obtain funds overseas with which to purchase these aircraft because they cannot be purchased with Australian funds. Perhaps a member of the Opposition will throw some light on this matter. In introducing the Airline Equipment (Loan Guarantee) Bill the Minister for Civil Aviation said:
During 1966-67 traffic on the competitive routes operated by Ansett-ANA and Trans-Australia Airlines was nearly 9% higher than in the previous year, the growth on long haul routes alone being 11½% fs 1967-68 the overall growth rate on the competitive routes rose to almost 11% while that of the longer routes leapt to 18%.
Because of projections into the future the Minister said that it was necessary for the airlines to meet their commitments by equipping themselves with an additional 727 jet. Hence the two Bills before the House and the method of financing the purchases. What many of us would like to know from the Government is the reason for the apparent discrimination between the two airlines in the financing that has been agreed upon. Section 104 of the Airlines Agreement Act 1952-1961 reads:
The Commonwealth will not exercise any of its powers under or by virtue of an Act, including a power to make regulations, so as to discriminate against the company.
A few of us who discuss civil aviation matters think that there is discrimination in the method of financing the two loans. Ansett-ANA will get half of its finance - $2.2m - from the Export-Import Bank at 6%. The interest payment will amount to $A742,487. The commitment fee which must be paid amounts to 0.5% or $13,590. The Australian portion of the finance - $2.5m- will be obtained at 61%. The total interest payable on that amount will be $380,141. The commitment fee of 0.5% will amount to $2,063. The total repayment by Ansett-ANA in interest and commitment fee will amount to $1,138,281. The interest paid by TAA on its loan from the Export-Import Bank will amount to $504,737, plus a commitment fee of $13,085. The loan from the Union Bank of Switzerland carries interest at 6£%, a commitment fee of 0.5% and a placement fee of H%. The total interest and other charges on the loans obtained for TAA will amount to $1,099,732, which is $38,549 less than the amount to be paid by Ansett-ANA. Ansett-ANA will1 pay a chattel mortgage registration fee of $ 1 1 ,600 and legal fees of $3,560, which TAA does not have to pay. In the case of TAA these charges are met by the Consolidated Revenue Fund. Ansett-ANA is also subject to a withholding tax which is not paid by TAA. This amounts to 10% on the interest and commitment fee paid in respect of the loan from the Export-Import Bank. That withholding tax amounts to $75,607. If we add that amount to the difference of $38,549 in the amount of interest paid by the two companies plus the chattel mortgage registration fees and the legal1 fees we find that the adverse result to Ansett-ANA amounts to $122,316. It may be said that this is not a large amount and that the discrimination is not great. But as has been pointed out, due to projected growth of traffic, the phasing out of Viscounts and the conversion of other services to jet operations, both companies have agreed to purchase six DC9 aircraft and one 727 between 1970 and 1972. I think it is right to assume that all of the finance - about $35m for each airline - will come from overseas. That sum of $35m is about seventeen times more than the $2m that each company is borrowing from America. If you multiply $76,000 by 17 you get a figure in excess of Sim, which is the amount Ansett-ANA will pay out over and above the amount paid by TAA. A few of us would like some explanation of this. We believe that the two airline system was designed so that the two airlines could operate in competition without any great monetary advantage being offered to either one by the Government. It seems to me, if my figures are correct, that one airline will have a decided advantage as a result of this agreement.
There seems to be a tendency for honourable members on the other side of the House, when they hear the name of Ansett, immediately to try to damage that man’s reputation. Here is an instance of an Australian who started off with a bus and a run somewhere in Victoria and who has built up a transport system that is equal to anything in the world. It is by his own efforts and enterprise and with the assistance of a lot of skilled Australians who work for him that he has put the company of which he is the head in the position that it is in today. Instead of trying to beat Ansett clown and constantly trying to point out that something should be done to prevent the growth and expansion of his operations, we in this House should give a little more encouragement for what he has achieved as an Australian. If there were a few more Australians like him this would be a better country and development would take place much faster. The question we have to ask ourselves is: What are we in favour of? We hear criticism of the importation of overseas capital for the development of Australia. We hear criticism of an Australian who is doing something in the best interests of the nation. I would hope, if what I say is correct, if there is a discriminatory part in these two Bills and the arrangement is in favour of TAA financially, that the Government will have a closer look at it.
At the same time I am not decrying the efforts of TAA. I think what it has achieved is a great tribute to a lot of Australians. Just after the war many of my friends formed the nucleus of TAA’s flying staff. With others around them on the maintenance side, they built up an airline which can hold its own with any other airline in the world. One thing I do sincerely hope is that this growth and the growth projections of 11% or 9% per year, and 18% on the longer hauls, will bc maintained in the future so that the expansion programmes of tho airlines can be carried out in the manner they want them carried out.
– There are three Bills before the House at the moment. One is to authorise the borrowing of $53m to enable Qantas Airways Ltd to purchase three jumbo jets. One will give approval for the Australian National Airlines Commission to borrow a total of $4.2m from overseas through the Union Bank of Switzerland and from the United States, and one is to guarantee loans for Ansett Transport Industries Ltd. The honourable member for Perth (Mr Chaney) told us a long story about the discrimination against Ansett Transport Industries. He accused Opposition members of being opposed to Ansett-ANA and of doing all that we can to hinder its activities and of being continually critical of what it is doing. I draw the honourable member’s attention to one fact. It is not the Opposition which drafted these three Bills or the Bill dealing with the guarantee of a loan to enable Ansett to purchase DC9 aircraft, lt was the Government he supports which drafted the Bills. That Government is responsible for the alleged discrimination to which he referred. 1 suggest that in all probability some of the criticism made by the Australian Labor Party is well founded. The Government apparently has seen tit to draft the Bills in this manner. I shall bc quite frank; I have not examined the points raised by the honourable member, so 1 do not know whether they are factual or not. I accept what he has said, but these Bills come from the Government, nol from the Opposition.
We of the Opposition have been critical at various times of the functions and operations of Ansett Transport Industries Ltd. We feel that the Government takes too much notice of what it has to say. I draw the attention of honourable members to the fact that Trans-Australia Airlines recommended that Caravelle aircraft should be purchased some years ago. Ansett suggested Electras. It is now a well known fact that the Caravelles would have been a much belter proposition than the Electras. One has only to read the annual report of TAA, which was tabled in this House a short time ago, to see that TAA is greatly concerned with the fact that it is still left with its Electras. Of course, Ansett is in a similar position. TAA is loaded with its Electras and wants to get rid of them as quickly as possible, lt will lose money on them.
The Caravelle aircraft would have been a much better aircraft for its operations and would have been a much belter aircraft to trade in. This is one respect in which we were particularly critical of the recommendations of Ansett. At the present moment it is a well known fact that TAA believes that the Australian airline industry will expand at a much more rapid rate than that forecast by Ansett. The Government is not taking notice of its own airline; it is taking notice of the private airline. We believe that as a result the whole airline industry in Australia is to some extent being retarded because of the preference being shown to the recommendations of Ansett. We are critical of this.
I have on numerous occasions in this place been critical of the organisation of both airlines and the manner in which they conduct their affairs. I am of the opinion today that TAA is not as efficient as it should be because I believe that TAA staff has become demoralised because of the attitude of this Government towards it. It has adopted the attitude that this is a situation that has crept upon them under the rationalisation plan. It asks: ‘What is the use of chasing business? When we chase it and get people to come over to our airline, we have to redirect them back to Ansett’. We all know that if the hobbles were removed from the activities of TAA it would far outstrip Ansett in its operations. lt is all very well for Government members to talk about rationalisation. We do not oppose the two airline system. We have never at any time said in this place that we would bring about the elimination of Ansett. We have always said that we accept the situation as it is. We do not oppose the Government’s guaranteeing these loans, for example; we support it. But we do believe that the airlines should bc allowed to use their own initiative and to operate in a manner which they think would meet the requirements of the Australian travelling public.
The Government talks about being a free enterprise government. Why does it not act as a free enterprise government and let competition take its full rein? As I said a moment ago, we believe that if the Government removed the restrictions on the airlines TAA would be the more popular and the airline which would be the most used by the travelling public. It would be able to chase business, to hold business and to provide a better service for the travelling public. Instead of that, under the present system in the airline industry, whatever one airline does the other has to follow. This is not my idea of competition: it is the Government’s idea. We of the Labor Party certainly would allow the airlines to exercise a greater degree of competition than they are exercising at the moment. A better service lo the public would result.
The Australian Labor Party is greatly concerned with the huge amount of money that is leaving the country for the purchase of aircraft. The Party feels that there is no need for this type of borrowing, ft believes that the Government should pursue a practical policy of approaching the aircraft manufacturers with a view to working out some form of reciprocal trade whereby if we purchase American aircraft the American aircraft industry in turn will provide the means for us to pay for the aircraft. The same position should apply with aircraft purchased in the United Kingdom, France or any other country. We should be prepared to apply this pressure. There is any amount of evidence to show that the airline industry in Australia is a substantial one. Only recently I read a statement by the Minister for Civil Aviation (Mr Swartz) to the effect that Australia is one of the three major air minded countries in the world today. As a matter of fact, the British Aircraft Corporation has one of its top executives in Australia at the moment sounding out the various airline operators on whether they are interested in the purchase of a new aircraft which the Corporation will begin producing very shortly.
I think honourable members should take note of some of the facts and figures available to them in the Parliamentary Library. I have some statistics in front of me that I think are worthy of incorporation in Hansard. The table shows the value of the aircraft and aircraft parts imported into Australia in the last 5 years. With the concurrence of honourable members, I incorporate that table in Hansard.
Honourable members will note that between 1963 to 64 and 1967 to 68, a 5-year period, 300 powered empty weight aircraft exceeding 5,000 lb were imported at a total cost of $1 66.043m and 1,382 powered empty weight aircraft not exceeding 5,000 lb were imported at a total cost of $23.915m. Between 1963-64 and 1965-66, a 3-year period, 393 powered unassembled aircraft were imported at a total cost of $4.869m. But the figures that astounded me were those for aircraft parts. For the 5-year period I have referred to the cost of these totalled $261. 431m. So, all told Australia has purchased aircraft and aircraft parts to a total value of $456.258m in that 5-year period. I think honourable members should examine these figures in order to determine the real position of the aircraft industry.
The Commonwealth Government should demand that the airline industry have some of its aircraft built in Australia. Honourable members should realise the limited number of aircraft being built here. Last week a Tariff Board report on an application for a bounty on single engined aircraft not exceeding 2,500 lb empty weight was tabled in this House. The amount involved was only $310,000. The company concerned had asked for a bounty to assist it to establish an industry to provide what it calls an agricultural air truck service for the spraying of farmlands and so on. It is obvious that this air truck has a place in the Australian aircraft industry, but the Government was not prepared to differ with the recommendations of the Tariff Board. Although it is not prepared to give that small amount of assistance for the establishment of an industry the Government is prepared to see $456m worth of aircraft imported into this country over the past 5 years.
I honestly believe that it is time the Government had a serious look at this question. We already have three aircraft industries in existence. We have the Government Aircraft Factories and the Commonwealth Aircraft Corporation in Melbourne, and we have Hawker-Siddeley, better known as De Havilland, in Sydney. All three are capable of building aircraft comparable with anything in the world, as their record shows. During the war they built 700 Beauforts and 364 Beaufighters. They also built Boomerangs, Wirraways and Mustangs. Since 1946 they have built Lincoln bombers, Lincoln maritime reconnaissance aircraft, Canberra bombers and Canberra trainer aircraft. They have built 100 Mirage fighters and 10 Mirage trainers. I know honourable members will agree that the Mirage fighter aircraft is one of the most sophisticated aircraft of its type in the world today. It can safely be said - in fact the Government has made this claim time and time again - that it is the best fighter interceptor aircraft in the world. That is why we bought it.
At present these industries are building Macchi dual seat jet trainers. They have built Vampire jets and Sabre jets. They are at present constructing and have been constructing for some considerable time a number of other types of sophisticated weapons of war. Admittedly these industries are not of the size of Boeing at Seattle, or Douglas-MacDonald in Los Angeles, or Lockheed in Los Angeles, the British Aviation Corporation in England or Sud Aviation in France, but they are capable of building excellent aircraft. 1 am not so silly as to suggest that we should say to the Boeing company that we are going to build the six 747s in Australia. It would be just too stupid for words to say such a thing as that; but we should be asking these companies what part of these aircraft will be built in Australia.
The requirement that part of an aircraft be built in the ordering country is not something new. In fact, it is common practice throughout the world. I have spoken about this before in this place, and I shall continue to do so. We know that, for instance, the Douglas company has negotiated agreements with countries whereby, in return for an order for Douglas-MacDonald aircraft the purchasing country is permitted to make certain parts of the aircraft. The same may be said of Fokker, the Dutch company. It, too, sub-contracts work all over Europe to other firms. If other countries purchasing aircraft can insist that parts of the aircraft be built in their own industries, we, too, can do it.
I remind the House that we have a labour cost advantage over the United States, for example. Labour costs in America are approximately double ours. Therefore if we can get a continuous run of work there is no reason why portion of the new aircraft could not be built in Australia. If it is not proposed to build larger aircraft here there is no reason why we should not set up some light aircraft industries in Australia. Sweden, a country with approximately only two-thirds the population we have, has an aircraft industry equal to anything in the world. It may not be equal in size, but the machine it produces is equal in efficiency to anything produced anywhere else in the world. If that small country can manufacture aircraft surely we should have an efficient aircraft industry which could be used as a pay-back industry, so that we would not be continually faced with the necessity to borrow huge amounts of money overseas.
I have given the figures for imports of aircraft and aircraft parts from overseas in the last years. It is also interesting to look at the amounts of money that have been borrowed overseas on behalf of Qantas Airways Limited, Trans-Australia Airlines and Ansett-ANA. I ignore what has been borrowed overseas on behalf of other airlines and 1 concentrate on those three only. Between 1957 and 15th November 1967, a period of 10 years, this Government approved of loans to the tune of $250m for these three airlines. Obviously we are a major customer of overseas aircraft manufacturers. Any country that is prepared lo purchase S250m worth of aircraft in 10 years is worth trying to retain as a customer. Therefore we should be able to negotiate.
The figures 1 have given relate only to borrowings on behalf of Qantas, TAA and Ansett-ANA. I do not include any of the cost of the FI 1 1 aircraft or the helicopters and light aircraft purchased by the three Services. My figures relate only to purchases on behalf of the civil airlines, lt is up to the Government to use its bargaining power to force these overseas manufacturers either to establish industries in Australia or to accept the existing Australian aircraft industry as the means whereby portions of these new aircraft can be built in Australia.
I know the Minister or some other member of the Government will tell us that already the Government Aircraft Factories are negotiating with the General Aircraft Corporation in America to build wings for a 32-passenger aircraft. We know that the representatives of the General Aircraft Corporation of America wilt be in Australia in about a fortnight to continue negotiations. This is all very well, but we are not purchasing any aircraft from the General Aircraft Corporation. We should be negotiating with the people from whom we are buying aircraft.
I suggest that honourable members should take note of some of the things that are happening in the aircraft industry in various parts of the world. We all know that at the end of the Second World War the Japanese aircraft industry was completely closed down by direction of the commander of the allied forces. Yet today the Japanese aircraft industry is producing various kinds of aircraft. It has been doing so for a number of years. It is now producing a 60-seater passenger aircraft. It is certainly not to the standard of the DC9 or similar aircraft, but it is still a first class job. It meets the requirements of the Japanese industry, which has completely recovered. The industry is back on its feet and, believe me. it will not be many years before Japan is one of the major aircraft manufacturing countries of the world, just as it is to the forefront in shipbuilding and in steel production. At the present time the Japanese aircraft industry is negotiating, just as is the United Kingdom aircraft industry, for joint undertakings. We all know that in Europe today portions of the British aircraft industry and the German and French industries are negotiating, and operating, on the basis of joint production. The Concorde is a joint project of the British and French aircraft industries. The European Aerobus will be a joint project of the British, European and German industries. There is no reason why we should not be moving into this field. I plead with the Government to do something about this.
Trans-Australia Airlines has an excellent record of aircraft purchase. In the last 10 years it has purchased S76m worth of aircraft and it has $15m worth on order. These are only the aircraft the Government has approved of. It is a well known fact that TAA will want about another S50m worth of aircraft in the next 5 years. The same can be said of Ansett-ANA. I have here a Press statement from Ansett-ANA which states that by 1980 it will have 28 jets in its fleet and will have more than double its present capacity. I have information from Qantas which discloses that from 1958 to 1968 it has purchased $226,437,000 worth of aircraft and that in the next 10 years to 1978 the airline, taking into consideration the United States supersonic transport, or SST, will need to purchase S488m worth of aircraft. This is what we have to bargain for, and the Government is not doing enough about it. So much for the Australian aircraft industry and what it can produce.
One of the things which concerns me in relation to these Loan Bills is that we have presented to us a fait accompli. The Minister brings in a Bill and says: ‘We want to borrow $53m to purchase a particular aircraft for Qantas. We want to borrow $4.2m to purchase a DC9 for TAA. We will guarantee a loan of $4. 2m to meet the requirements of Ansett-ANA.’ At no time is a report brought into this place recommending that Qantas should specialise and concentrate on the 747, the Concorde, the United States supersonic transport or some other particular aircraft. Nothing is presented to us. Honourable members are not given the opportunity to debate the relative merits of whether TAA should buy DC9s or BACH ls, or whether Qantas should buy 707s or DC8s. These questions are not submitted to honourable members. At this stage I question - I may be wrong, and if I am it will not be the first time - whether Qantas is doing the right thing in buying 747s at this stage. Is there the business for them? The decision to make the purchase has been made by the experts in the field but no-one has told honourable members the reasons for the purchase of the 747. After all, there are similar types of aircraft such as the L1011 Lockheed air bus, the DC10 from Douglas and the A300 European air bus. These aircraft are nearing completion and will be available for service with various airlines in the very near future.
I should like the Minister to give us the facts on why Qantas is purchasing the 747. What will be the load factor between Australia and overseas ports? Will there be a need for four aircraft? What will be the role of the Concorde in supersonic transport? What is to be the role required of machines on overseas operations? Will it be more economical to run one or two 747s a week than to provide a continuing service with 707s of the current series? Will it be more economical to use the smaller L1011 or the European air bus? These are questions in relation to which I think the Government should be prepared to give us some details before asking us to vote on a Bill to approve a loan of some $53m.
There are several features that I do not like about the loan agreements themselves, notably the provisions relating to insurance. Paragraph 1 in the United States Agreement, which is the Second Schedule to Article VIII - Aircraft Hull Insurance - the Loans (Australian National Airlines Commission) Bill is in these terms:
All-Risk Aircraft Hull Insurance. The Borrower shall cause the Commission to maintain insurance upon the Aircraft under a contract of All-Risk Aircraft Hull Insurance, satisfactory to Eximbank and the Exporter. Such insurance shall be payable in United States currency in the United States. . . .
Why should it be paid in United States currency in the United States? Why cannot these aircraft be insured in Australia in Australian currency without our having to go to the expense of insuring them in the United States? The Government is continually complaining of, and drawing members’ attention to. the fact that we have to encourage foreign capital into Australia. In other words, we have to build up our foreign reserves. There is no reason in the world, in my opinion, why these aircraft should not be insured in Australia. I should like the Minister to give some explanation as to why these aircraft have to be insured in America with American dollars. Why cannot they be insured here in Australia? Another interesting aspect relates to future employment. Paragraph H of Article X of the second schedule of the same Bill states:
Future Employment. The Borrower covenants that during the period of Iwo years after August 15 1968 it will not employ or enter into any understanding to employ any person: (1) who was a director. officer or employee of Eximbank at any time during the period of one year prior to said date; or (2) who is a director, officer or employee of Eximbank at the time of such employment or understanding to employ, unless in either case such employment is approved in writing by Eximbank after full disclosure to it of all facts in connection therewith which it deems to be relevant.
Why do we have to give this explanation, and the undertaking that we will not employ any of the employees of Eximbank? This is the Commonwealth Government., not some ordinary company, and the Minister should give some explanation as to why we should have to give this undertaking and covenant to the bank.
Many other points are of interest. One relates to the marine transport of items of equipment for this aircraft and their insurance. Why cannot we take out the coverage? Why must Eximbank make the decision on what ships these parts are to be transported in? Honourable members can study the conditions relating to marine transportation and insurance in Article XIII of the second schedule. These are a few of the points on which I should like some explanation from the Minister when he accepts the opportunity, as he no doubt will, of replying to the debate on this Bill.
– I support the remarks made by the honourable member for Perth (Mr Chaney) who informed the House of the adverse results that could accrue to Ansett Transport Industries Pty Ltd as a result of the imposition of the withholding tax which is being imposed on interest payments for overseas loans. He placed before the House a number of figures which he has been kind enough to place before me. It greatly concerns me, when we approach this period - particularly the next 10 years - and recognise the number of aircraft that are to be acquired during this time. As a result of this I have had a closer look at the Loans (Australian National Airlines Commission) Bill than I did before and I note that in paragraph 4 of the first schedule and in Article XV of the second schedule there is exemption from any present and future taxes in relation to loans undertaken in this instance. Honourable members will recall the Minister for Air (Mr Freeth) stating in his second reading speech that the Commonwealth was merely assuming the function of an intermediary in these arrangements and borrowing on behalf of Trans-Australia Airlines, and although in the clause and the Article that J have referred to the Commonwealth Government is mentioned as the borrower, the borrower is, in fact, TAA. It exempts TAA from this tax. Section 39 of the Australian National Airlines Act 1945-1961 states: (I.) The Commission shall pay all rates, taxes and charges imposed by or under any law of the Commonwealth and such other rates, taxes or charges as the Minister specifies.
From a reading of that section it can be seen that the intention of Parliament at the time when this legislation was enacted was that TAA would pay the same taxes as the private operator paid. Yet this intention is not being applied in this instance.
Let us look further into this question. The honourable member for Perth referred to the Airlines Agreement Act 1952-1961. Turning to the First Schedule we find that paragraph 10 reads: (1.) The Commonwealth shall not exercise any of its powers under or by virtue of a Act, including a power to make regulations, so as to discriminate against the Company.
The company referred to in that Act is Ansett Transport Industries, lt is quite clear from the figures that the honourable member for Perth has given and from the sections that I have quoted that there is a discrimination against Ansett Transport
Industries because of the fact that this withholding tax must be paid by Ansett Transport Industries. I am not here to hold a brief for that company. But, being a supporter of the two airlines policy, this requirement does seem to me to be going against the principle that the Government has enunciated in the past both inside this House by virtue of the legislation I have quoted and outside this House in supporting the two airline system.
My concern is that Ansett Transport Industries will have to pay this 10% withholding tax while TAA does not have to pay it. This is in addition to the fact that the Ansett Transport Industries interest rate will be i% per annum greater than the interest rate that TAA will pay - I think that is the figure that the honourable member for Perth stated - because TAA will pay only the rate at which the Commonwealth of Australia borrows. This interest rate naturally is marginally lower than the rate at which Ansett Transport Industries can borrow overseas with a full Commonwealth guarantee. The remedy for this situation may not be to withdraw the exemption from taxation for the Commonwealth loan because the Commonwealth is far more concerned with its own general borrowings overseas from time to time amounting to many hundreds of millions of dollars, and on which all those borrowings must be exempted from taxation, but rather that the Commonwealth should make TAA pay the commercial interest rate which Ansett Transport Industries has to pay, together with the withholding tax, assuming of course that Ansett Transport Industries in the future has no way of being exempted from that tax. That statement is not consistent with the section of the Act that I read which stated that TAA was to pay the taxes that Ansett Transport Industries would be liable to pay. As a result of this the Commonwealth would be making a small profit on the charge it imposes on TAA. It seems only equitable that TAA should not be given an advantage over Ansett Transport Industries while the two airline system operates, and I hope that it operates for a long time to come.
– How long?
– For a long time because of the benefits that flow from it. In discussing the financing of TAA, I wish to raise another point, even more fundamental than that to which I have already pointed, lt relates to the policy of the Government in allowing the staff superannuation funds of TAA to be invested in nuts and bolts of aeroplanes in TAA’s business. This appears to have been a deliberate policy introduced by the then Labor Government when TAA was created knowing that it would allow the Australian National Airlines Commission to accumulate over the years very large sums of cheap money which would enable it to compete unfairly, I would submit, against the private airline system. This anomaly has never been corrected by any subsequent government. The honourable member for Newcastle (Mr Charles Jones) was right when he suggested to the honourable member for Perth that the criticism that he had made should have been directed towards the present Government. I agree with his viewpoint because I think that this is an anomaly that should be corrected by this Government.
I wish to illustrate the extent to which TAA has been allowed to accumulate cheap money. It is not difficult to extract these figures from the balance sheets if one runs through them as I have done, from that for the year ended 30th June 1957 to the balance sheet for this year which was presented to the Parliament recently. In the balance sheet to 30th June 1957, the total superannuation provision for flying and non-flying staff amounted to £2,017,872. Against this amount I believe the flying staff superannuation was invested outside in Commonwealth Government securities and appears among the assets as investments of f 1,468,611. I understand that this is made up of flying staff superannuation plus their insurance provisions.
The last balance sheet published at 30th June 1968 shows superannuation figures now totalling $20,246m of which, on the liability side, only $2,900m is invested externally and the rest is invested in the business. If this is allowed to continue then over the next 10 years TAA will obviously, on those figures, obtain another $30m of virtually free finance. I understand that a very low interest rate is charged by TAA as the cost of these funds against their operations. I also understand that no other government instrumentality, such as the CommonBanking Corporation or Qantas Airways Ltd or the Australian National Line, is allowed to retain its superannuation funds; they are invested outside the business. As the result of these funds TAA’S capital has not changed at all in the last 9 years. I see in the balance sheet I have in front of me that this figure is still at SI 5m. However, Ansett Transport Industries Ltd has had to increase its capital, mainly by the amount that TAA has been able to retain in its business by its superannuation fund. Surely TAA should be directed to invest these funds externally. Initially the money should be given back as capital on which TAA would have to pay income tax and dividends to the Commonwealth.
One does not have to extend one’s imagination far to realise that if this method of financing is allowed to go on and to increase at the present rate, it is possible that within 10 years Ansett Transport Industries Ltd will not be able to compete, because the sheer cost of money will force it out of the aviation business or will be confronted with problems with which honourable members quite clearly are not seized with at the moment. Ansett must buy, year by year, equipment equal to that purchased by TAA. The Government’s twoairline policy will be maintained only if the fundamental sources of funds for running the businesses are on the same sort of economic basis.
T think the honourable member for Perth (Mr Chaney) made some very worthwhile statements when he spoke of the benefits of the two airline system. In pointing out these discrepancies one is not saying that TAA is not doing a fine job; of course it is. But if the aim is to maintain fair competition between the two airlines the discrepancies I have pointed out should be noted and amended if at all possible. I urge the Minister to take cognizance of the figures presented to the House tonight by the honourable member for Perth, and of certain of the remarks made by myself, in the hope that a more equitable approach to finance can be made so that Ansett will nol be placed in this discriminatory position.
Thursday, 14 November 1968
There is no doubt that the honourable member for Kooyong (Mr Peacock) is carrying a torch for Ansett Transport Industries Ltd. We could tell by the way he spoke that he is endeavouring to persuade the Government to curtail the competition offered by Trans-Australia Airlines. If the honourable member took a little time to go back into the history of the two-airline system he would see that if ever a government has been a fairy godmother to an industry in Australia, it has been this Government. Over a period of years this Government has feather-bedded and fostered Ansett Transport Industries all the way through. It has given concessions, especially taxation concessions, to such an extent that without them the company would not be in operation at present.
I think that if the honourable member for Kooyong were honest and sincere, one of the first things he would have said is that the airline operations of Ansett Transport Industries should be divorced from its other activities for the purposes of the twoairline policy. There should be two separate companies so that the Australian Government and the Australian people could have some idea of the extent of all the interests involved of operation. In the present situation, if ever a company has been given great taxation concessions it is Ansett Transport Industries Ltd. We have only to look at the television stations which are owned and controlled by this company. We find that over a period of years they have been losing about $500,000 each year and that the company has written off this loss prior to its paying company tax or any other tax. lt is the Australian people who are subsidising this company which is losing money on its television enterprises. It cannot be said that the company is not getting a fair go.
We must consider also the Government’s decision which ensures that Ansett Transport Industries Ltd will get half the mail service work in Australia, business which amounts probably to $20m a year. Honourable members will be aware also that a direction has been issued in the Public Service that half of the Public Service business shall go to Ansett Transport Industries. Many of us are aware of the history of the DC6B aircraft. I shall not repeat the details to the Parliament because honourable members are already aware of them. If ever an injustice was done to an airline company there was an injustice done to Trans-Australia Airlines on that occasion. In that instance mistakes were made and some people just would not be told, but it was the Australian taxpayer who bore the cost of these aircraft. Many honourable members will be aware also of what happened when TAA wanted to purchase the Caravelle aircraft. Because Ansett did not want the Caravelle, TAA was not allowed to purchase them. People are talking through their hats when they castigate TAA. I am proud that it is a Government owned airlnie There is no doubt in my mind that if the reins on TAA were let go and it was allowed to purchase the aircraft of its choice we would all benefit. Within the last few months in particular and also last year TAA wanted to purchase more aircraft because it believed that in this changing era it could provide a better service to the public.
The honourable member for Melbourne Ports (Mr Crean) said earlier in the debate that the use of some aircraft denied the public a service in off peak hours. I suggest that the main reason for this is the lack of sufficient stand-by aircraft owned by Australian airline companies with the result that aircraft are not available when required to be put into service to carry the public. I realise that consideration must be given also to the efficient use of aircraft. I know that TAA has made representations to the rationalisation committee to enable it to bring in an economy class off peak service on which cut rates could be offered to people who want to travel at off peak time. But because Ansett Transport Industries has objected to the proposal people in Australia are denied the cheaper economy class fares which could afford a considerable saving to many people in the community.
Honourable members opposite may talk about which company is being favoured, but there is no doubt in my mind which organisation has received the favoured treatment. Let us consider television. One has only to consider the decisions of the Australian Broadcasting Control Board which have let off the hook the television companies owned by Ansett Transport Industries. They do not even have to televise 2 hours of Australian drama each month.
-Order! I think that the honourable member is getting a little wide of the bill.
– I realise that, but I am dealing with the question as to whether these people are good Australians and whether they are doing something for Australia. Personally I believe that they are not doing anything for Australia when it comes to encouraging people in these fields. There is no doubt in my mind that we have to encourage Australian participation, particularly in the television field. The legislation before the House is to authorise the borrowing of money from overseas for the purchase of aircraft by the major Australian airlines. The honourable member for Melbourne Ports has moved what I believe is a just amendment. I believe that we should not borrow money from overseas when it is available from sources in Australia. Last year TAA paid $1.25m into Consolidated Revenue by way of dividend and $7. 5m to the Treasury in taxation. Those figures show that TAA is doing its bit. It is contributing to the Australian economy. As this money is being paid into the Treasury, I believe that the Treasury ought to make money available for the purchase of these aircraft. To do so would save the airlines a considerable amount of interest and might enable them to purchase additional aircraft. After all, that is what the companies desire.
The airlines have grown considerably, particularly over the last 2 years, and they will continue to grow. A greater number of people want to use air transport because it is quicker. They realise that it is just as quick to travel on a jet between Melbourne and Brisbane as it is to travel in a car or by public transport from the outer suburbs to the inner city areas. People are using the airline services, and there is a demand for them. The air cargo business is increasing because of the good service that is being provided by the airlines. There are overnight deliveries. In other instances articles can be taken to the airline companies in the morning and delivered to their destination in the afternoon. This means that the airlines have to have aircraft, and the aircraft have to be used.
This is why I say that if TAA wants to purchase additional aircraft it should be entitled to do so. If it is able to purchase additional aircraft it will be able to attract a greater number of passengers. If the other airline, Ansett-ANA, cannot purchase additional aircraft, why should TAA be prevented from doing so? The people who run TAA are responsible to the Parliament. Each year they have to submit a report to the Parliament for our perusal. If these people honestly and genuinely believe that additional aircraft are required, the Government should not stand in their way. It should make the aircraft available. I believe that it is as a result of this Government’s policy that many people are complaining that they cannot get air transport at the time they desire. If a service is to be given to the public, it should be provided when the public requires it. The airlines should not say to the people: ‘You will travel when we want you to travel’. Because of the period of time involved in travelling between most of our capital cities I believe that we ought to be expanding our airlines instead of pulling the reins on them and preventing them from purchasing additional aircraft.
We know that at the present lime TAA wants to phase out its Electra aircraft. It wants to do this in the near future - before 1 970 - because in 1 970, under the direction of the Government, certain modifications have to be carried out on these aircraft. I do not know whether TAA ought to wait until 1 970. If a direction is given that certain modifications ought to be made to Electra aircraft, I cannot see why TAA should wait for 2 years before it carries out these modifications. They ought to be done now. I know that if these aircraft are still in service in 1970 it will cost the company an extra $200,000 to carry out these modifications. If TAA really wants to replace these Electra aircraft because they are not paying or because it will be able to give a better service with jet aircraft or because jet aircraft will be able to earn more money through a quicker turn round of aircraft, the airline should be given permission by the Government to purchase additional aircraft. The Government should not say that TAA cannot purchase additional aircraft because the other airline complains that it cannot purchase additional aircraft at the present time as it cannot afford them.
There is no doubt in our minds that (his is what is behind the whole idea as far as the Government is concerned. It is just that the other airline will not let TAA purchase these aircraft. The average Australian will say straight out that it is not the Minister for Civil Aviation (Mr Swartz), who sits in this Parliament, but the other Reg whose headquarters are in Melbourne who runs the airlines in Australia today. I think 9 out of 10 Australians would agree with me about this. If one operator can buy aircraft only when the opposition airline agrees, what are we to do in the near future? What is to happen to the Australian industry? Air services will be curtailed all the time, if one operator says it cannot afford the aircraft that are needed to provide adequate services.
There are probably not enough people in the Parliament who know as much as they should about the full ramifications of the finances of Ansett Transport Industries Ltd. After all, we know that the company has to pay exorbitant interest rates, which means that the aircraft have to be turned round faster so that the company can get the income it needs to enable it to meet its commitments. And these commitments, of course, are growing every year. If we look at the particulars of the balance sheet of Ansett Transport Industries that I have been able to pick up in the Press over the last 12 months - I think I have as much information as anybody else - we see that the company made a profit of $3. 78m last year and had to pay just over $2.25m in taxes. This was the highest taxation it had paid for some time. The increase was due to the manner in which it keeps its books. It has been writing aircraft off over 4 years. The period has now been extended to 8 years and this means that the company cannot make as large a claim for depreciation as it has done in the past.
Last year we had a strike by TAA crews of DC9 aircraft, and this put extra revenue into the coffers of Ansett Transport Industries Ltd. I suppose this strike cost TAA about Sim. Whilst I agreed with the pilots on that occasion when they were standing up for what they felt was right, I thought it was a bit weak on their part to allow the aircraft of the other operator to fly. I cannot see why, when one half of the members of a union are out on strike, the other one-half of the members should be allowed to work. I do not know whether some sort of a deal was made between the union and the company concerned, but I do know that
TAA was affected a great deal by it, to the extent of almost $lm. This meant, of course, that the other airline benefited as a result.
If ever I have seen a handout given to any Australian industry one was given on the occasion when the Government handed back S 1,239,749 to Ansett Transport Industries Ltd and $1,226,446 to TAA as a refund of customs duty paid on their Boeing 727 aircraft which originally landed in Australia in, I think, 1964. Many of us recall that there was a great deal of discussion about whether the airlines should pay the customs duty. The Deputy Leader of the Government on that occasion maintained that we had an agreement with the United Kingdom with respect to aircraft, and that there was available a British aircraft, the Trident, which was comparable with the Boeing 727. He said that the companies had to honour the agreement and had to pay customs duty. But after 4 years the Government gave a hand out to the companies of the amounts that I have already stated. Why should the Government make such a big handout to these companies? A better explanation should be given to the Parliament than the one that was given to me by the Minister. In answer to my question he said:
When me airlines appealed recently on the ground that actual experience with the Boeing 727 under Australian conditions compared with operations of the British Trident IB in other countries demonstrated that the two aircraft were not equivalent, the Government accepted that their argument had been sustained.
It took the Government 4 years to decide that the argument of the airline operators had been sustained. But was the Trident IE ever given a trial in Australia to determine how it would fly in Australian conditions and how it would operate here? Of course it was not.
We just have to accept the explanation given by the Minister. No other explanation has been offered. I would like to know much more than is contained in the explanation given to me. 1 would like to know all the reasons that were put before Cabinet. This seems to me to be a pay off to the two airlines. Admittedly the payments to TAA go back to the Treasury. After all it is our airline. I am a shareholder in it and I want to see that it is given a fair go. All I ask is that it be allowed to continue to give the service to the Australian people that it has given in the past.
As I said, the refund of the duty was a gift to Ansett Transport Industries Ltd, and it was not a bad gift. Almost $ 1.25m was returned to the company after 4 years. Noone has yet given me a good reason for this money being refunded. I also asked the Minister whether the decision was made at Cabinet level and he answered that it was.
– That is the type of Cabinet we have.
– That is right. Cabinet has looked after Ansett Transport Industries Ltd. It has been a fairy godmother to the company and because of this the company is in operation today. The airline operations of the company should be divorced from its other activities so that we can compare its airline operations with the operations of TAA. I have no doubt that the Australian taxpayers are subsidising the company and meeting the losses it has made on its other activities. The company is not making money and apparently it will continue to lose money, because provision has been made for its future losses. No doubt further assistance will have to be given to the company in the near future. I am concerned about the unfortunate people who may hold the debentures of the company. If the company ceases to operate, they will lose money.
Mr Speaker, I will end on that note. I know that the honourable member for Scullin (Mr Peters) wishes to speak. All I say is that it is time the Australian Government gave more consideration to the possibility of raising money in Australia for the purchase of aircraft. The money should be provided by the Treasury and we should not sell ourselves to overseas bankers at exorbitant rates of interest. If one looks at the legislation one finds that although we will borrow money next year no repayments will be made for 3 years. Of course, the interest payment will be going up all the time. It will be exorbitant before we even start to pay off the principal. This Government believes in borrowing money overseas. That is its policy. But it is the wrong policy. I sincerely hope that when there is a change of government there will be a different outlook on these matters of finance. In fact I know that there will be. I believe that the Australian people will benefit as a result of the Australian Labor Party’s policy on these matters.
One of the outstanding features of aviation in Australia in recent years has been the growth in airline traffic. In 1966-67 traffic on the competitive routes operated by the two major airlines rose by almost 9% on that of the previous year. In 1967-68 the increase was almost 1 1 % on the figure for the previous year. On long haul routes, in 1966-67 traffic was more than 11% above that of the previous year and in 1967-68 ii was about 18% above the figure for the previous year. That illustrates very clearly the growing value of the franchise enjoyed by our two major airlines. They share (his increased and constantly increasing traffic.
In the second reading speech on the Airline Equipment (Loan Guarantee) Bill the Minister for Civil Aviation (Mr Swartz) said:
On the long distance services, in particular, the greater comfort and speed offered by jet aircraft have undoubtedly contributed in no small measure to this outstanding growth.
There is no question about that. It is very pleasing to see the standard of air services with which Australia is provided, lt is pleasing to note the services that are given to the people who have the privilege of enjoying them. But I believe that because of the profitability of these services the two major airlines should be at least able to continue the frequency and standard of services that they have been providing on inland routes over recent years, even if the percentage of seat occupancy is not at the level that would be necessary to make the services profitable if they were conducted as special services. 1 regret that we do not see the same competition and the same eagerness on the part of the airlines to provide the aircraft for these inland services as we see in relation to the equipment that they require to provide services for the cream of Australia’s airline traffic. 1 think ‘cream’ was the word that the honourable member for Melbourne Ports (Mr Crean) used when he was speaking earlier in this debate. It is a pity that the airlines do not have the same interest in trying to provide the most suitable type of aircraft for the services that are still operating in the inland areas, because those services are so essential for the balanced development of this country and for the ordinary way of life of the people of those areas. They should have the greatest possible frequency of services, and, in conjunction with that, the best standard of service. But it is on the frequency of services that I place the greatest emphasis. It is not only in the passenger traffic but also in the goods traffic - the carriage of mails, essential goods that are needed urgently in these areas, medical supplies and so on - that we need to maintain this frequency of services.
I agree that Trans-Australia Airl’ines has introduced the Twin Otter recently in an endeavour to find an aircraft that will be able to operate economically on routes on which traffic is limited. 1 feel that AnsettANA should endeavour to compete in this field. Ansett-ANA should have a took at the fine aircraft in that category, the use of which would yield greater profits, and which consequently would make possible continuity of services on routes from which the company at the moment is considering withdrawing. I mention the frequency of air services because one of the great advantages of them and one of the reasons why people are prepared to pay the extra cost in order to travel by them is the lime saving factor. If a passenger has a long wait for a return trip the value of the time saving factor is lost.
I noted that the honourable member for Melbourne Ports (Mr Crean) staled thai he had his knees on his chin when he travelled in a Fokker Friendship. This type of aircraft provides a much better standard of service than does the Twin Otter. At the same time we accept the use of the Twin Otter in those places where even a Friendship would operate at a heavy loss. I hope that the complaints made about the Twin Otter aircraft not being able to handle the traffic since they have replaced the DC3s will be taken into consideration by TAA and that more services will be provided. This is one way in which the difficulty can be overcome. I hope also that Ansett-ANA will give serious consideration to providing another fleet of the aircraft about which I have been speaking.
Despite the lack of comparable services that necessarily have to be provided with the smaller aircraft, the people in outlying areas do not receive any consideration by way of economy fares. This is something which should be given sympathetic consideration. The theme of my remarks about this Bill is that I believe we must always look at Australia as a nation, and be prepared to make some concessions to the people in areas where the traffic density is not so great because they contribute to the welfare of Australia and are not given the amenities to which they feel they are justly entitled. I for one can see problems in maintaining the level of population in those areas. This is a very important point. There is no doubt that the remote areas are losing population. Australia cannot afford to lose population from its outlying areas to the cities at the rate it has been. As a nation we have to give very earnest consideration to this serious situation. In the equipment or re-equipment of our major airlines I trust that consideration will be given, not only to the jet aircraft which are the glamour aircraft today and which provide a very fine service, but also to other aircraft for the services which are required so urgently throughout the vast spaces of Australia. I hope that the same anxiety will be exhibited in providing these services to enable the people, as a nation, to develop this country as it should be developed. The people in the outlying areas are already putting up with a great many disadvantages. The difference between their way of life and the way of life of people living in densely populated places where amenities are more readily available is growing rapidly.
The least we can do is try to bridge that gap or to prevent it widening any further. I trust that me airlines will take this particular factor into consideration. If it is necessary to provide commuter services to take the place of the airlines which are now being re-equipped consideration should be given to ensuring that they work under conditions which will enable them, assisted by a subsidy, to continue to provide the air services which are vital to our inland areas.
– At this late hour I will address my remarks very briefly to the legislation authorising the borrowing of a vast sum of money by Qantas Airways Ltd for the purpose of purchasing four jumbo jet aircraft. An examination of the text of the agreement which is incorporated in the Schedule to the Bill shows clearly that we must realise we are still in the economic kindergarten class. A package deal has been negotiated. The only thing that the lending authorities have failed to do is take the fingerprints of the Treasurer (Mr McMahon) before signing the contract. It is humiliating for a sovereign country to be placed in the position that it must assume to borrow money overseas. American businessmen are hard nosed and certainly hard fisted. When we deal with them we engage in a package deal and we are given a lesson that we might well learn.
The deal involves such refinements as the stipulation that transport of certain of the equipment is to bc by vessels under American registry; that the insurance in respect of various hazards is to be with American companies; and the intriguing stipulation that the Commonwealth shall not have the right to offset against its liability any claims it may have for defects in respect of the aircraft. In dealing with these people we give ourselves the same status as people who deal with money lenders. We can expect to be humiliated.
I support the comments made by the honourable member for Perth (Mr Chaney). He said that in many of these matters we are literally keeping up with the Joneses. As a matter of fact, in this case we have been buying in haste and possibly will1 repent at leisure. I am by no means happy with the implications of the arrangements. I want to draw attention, even at this late hour, to difficulties which have already arisen. They are very substantial difficulties indeed. The ‘Australian Financial Review’ of 31st October described the washup of a conference of the chief executives of ninety world airlines at Cannes, France. After 5 weeks of conferring they could not agree on details of pricing, fares and seating.
The ‘Wall Street Journal’, a responsible United States publication, said on the same matter that the result of the purchase of jumbo jets by Pan-American Airlines was likely to be mass irritation. The article stated that some industry sources warned that the airlines may be underestimating the cost of bringing the S20m jumbo jets into service and the difficulties of building up passenger traffic to take advantage of the capacity of the jumbos. The article finished by stating that if we continue to develop airports under existing procedure we might just as well keep the jumbo jets, air buses and supersonic transports under wraps for another 10 years.
Our own international airport at Sydney has concerned some members of this Parliament. It also concerns your electorate, Mr Speaker. Repeated complaints have been made by the honourable member for St George (Mr Bosman), the honourable member for Barton (Mr Arthur), the honourable member for Hughes (Mr Dobie) and of course the honourable member for Kingsford-Smith (Mr Curtin) about aircraft noise. Let us consider by how much it will be multiplied when these huge aircraft come into operation. We have just extended the runway into Botany Bay to handle existing aircraft. Now there is a need to increase it from 9,200 feet to 13,000 feet. Evidence was given to a parliamentary committee by a spokesman for the pilots’ organisation that there was a need also for the runway to be widened from 150 feet to 200 feet.
Sydney Airport with its expanse of 1,500 acres is not adequate to cope with jumbo jets. 1 commend to the consideration of the Minister for Civil Aviation (Mr Swartz) the suggestions of the planning authority for New South Wales. It has six alternative sites in mind. I add another which the planning authority has not considered. I refer to the southern area of Holsworthy military reserve. There is a huge tract of land to the south of Liverpool, between Holsworthy and Darkes Forest, within 20 miles of the heart of Sydney, which could be readily converted for use by aircraft of these huge dimensions. The Tempe-East Hills railway line, which runs a distance of 15 miles from Central Railway Station, could be extended five miles to serve the area.
I will not delay the House longer. I merely sound a note of caution. We could be in trouble with these aircraft. According to the report in the ‘Australian Financial Review’ the chiefs of the world’s airlines have set 31st January 1969 as deadline for overcoming the deadlock on jumbo jet fares and have warned that, unless agreement is reached in individual airlines, they could be charging what they like on all services. In other words, we might well have bought in haste and be forced to repent at leisure.
– Like the honourable member for Cunningham (Mr Connor) I do not intend to delay the House at this late hour but since the Opposition has moved an amendment seeking the use of local funds instead of overseas funds, it is necessary to answer this argument. Far too often we have heard the Opposition contend that we should not borrow overseas to finance our aircraft purchases but should finance them from current revenue. This system may have been fine 20, 30, 50 or 100 years ago in order to buy things.
– We did not have aircraft then.
– Perhaps the Labor Party should bring its thinking up to date. The point has to be remembered, as the Minister for Labour and National Service (Mr Bury) pointed out in an earlier debate, that today you must borrow to be prosperous. How many honourable members have bought their motor cars for cash? 1 venture to suggest that very few on the Opposition side have. I see the honourable member for Yarra (Dr J. F. Cairns) indicating that he bought his motor car for cash. I would say that he is in the minority. Even if he did buy his car for cash, this is no way to run governments. We can not sit back and wait for the Government to accumulate funds or to raise revenue so that we can import economic assets such as aircraft. I believe we must borrow overseas. It must be remembered that the overseas borrowing market is a small one. I do not think we should ever forget that the negotiators of our loans overseas do quite a remarkable job. Their success reflects the creditworthiness of this Liberal Government. One wonders what the chances would be if a Labor government, should there be one in the near future, tried to obtain similar loans overseas.
There are a couple of aspects about the Bill which I want to comment on. On an earlier occasion when debating similar legislation the honourable member for Melbourne Ports (Mr Crean) and I joined issue on the necessity for foreign agreements to be written in foreign languages. I am very pleased to see that the agreement with the Union Bank of Switzerland has been completed this time in English. 1 believe the Opposition has misinterpreted the need to bring in assets of a proper economic value at a time when they are needed without having to wait, as 1 mentioned earlier, until we have accumulated funds. With regard to the aircraft being purchased, I do not pretend to be the sort of expert that previous speakers have claimed to be, but I hope that the Minister for Civil Aviation, who is present, can assure the House that the 727 aircraft being purchased by Trans-Australia Airlines and Ansett-ANA are not to be quick change versions that will be used to carry freight into and out of metropolitan airports in Australia at night. The honourable member for Cunningham rightly touched on the concern about noise factors in the metropolitan areas. I hope that an assurance regarding these quick change aircraft can be given tonight.
Mr Speaker, I do not wish to go any further than to say that the Treasurer (Mr McMahon), who also is in the House at this late hour, should be complimented on having finalised about $A208m worth of loans this year on a very restricted United States market. This is something which should not be underestimated. It has relieved the pressure on the Australian money market and therefore has relieved the pressure on our internal interest rates. I believe the Government has to be complimented on its legislation and on its principles and that the Opposition’s amendment concerning this Bill should be soundly defeated.
I want to say a few words at the end of this debate on these bills. Four Bills debated tonight have authorised the borrowing of money overseas for particular purposes. This debate was begun quite early by the honourable member for Melbourne Ports (Mr Crean), who spoke for about three-quarters of an hour. He asked the Government to explain why it was necessary to borrow money overseas and why it was necessary to do it for the particular purposes specified. No member on the Government side who has spoken since then has made any serious effort to answer those questions. I think that those questions can be answered.
I wonder why it is that Government backbenchers, members of the Ministry and members of the Cabinet think it unnecessary to make any explanation to the House about why the matters dealt with in these Bills have to be handled in this way. Is it that honourable members opposite think it preferable simply to ignore what has been said by honourable members on this side of the House, or are they unable to reply? Having listened to most of the debate for about 4 hours, I do not know why honourable members on the Government side adopt this altitude. Are they unable to reply or do they choose to ignore the Opposition and to ignore the people of Australia? By ignoring the Parliament they are ignoring the people, in the debate on the Loan (Housing) Bill (No. 2), which was debated extensively by the Opposition, noone on the Government side spoke. “Yet the honourable member for Melbourne Ports, in opening the debate on behalf of the Opposition, had asked a series of very serious questions that warranted answers. We often hear much about there being no opposition in this Parliament. It would be much more ‘appropriate if we heard that there was no government here. Time after time in debates of this sort the Opposition makes out a case and raises significant, particular and relevant questions: yet time after time no honourable member on the Government side secs fit to try to reply to the case that has been made out. 1 have had just about enough of this stuff that is dished out sometimes through the Press that the Opposition is in some way at fault in this Parliament, in the debates tonight the Opposition has been a mile in front of the Government. All the relevant questions that ought to be answered by the Government when introducing legislation of this kind have been ignored. There are economic students on the other side of the House. The honourable member for Higinbotham (Mr Chipp) was here interjecting for quite a long time.
-Order! I think the honourable member is getting wide of the Bill.
– There is no fear of Government supporters getting wide of it. There is no fear of their talking on it at all. I think that when we reach the end of a long debate like this it is both necessary and relevant for these facts to be pointed out. There are many questions about these matters that continue to remain unanswered. I do not intend to take any further time on this subject which the Treasurer has made no serious attempt to explain as it can be explained. He has ignored the House. He has considered it quite unnecessary-
-Order! I think the honourable member has made his point. He is not speaking to the Bill before the House.
– I hope I have made the point sufficiently for it to have registered. One is left to doubt very often whether one is even heard.
-Order! If the honourable member persists in this train of debate I will have to ask him to resume bis seat. The honourable member must debate the question before the House.
– The Bil! before the House authorises the Government to borrow money for the purchase of aircraft. This country has very extensive reserves. We are told by the Treasurer (Mr McMahon) that these reserves are so favourable that Australia is in the position of being one of the most trusted countries financially in the world. If we have these reserves, and if there is no necessity to be pessimistic about the state of the economy, as the Treasurer on behalf of the Government has been telling us for weeks - if we are the best financial risk in the world - surely we can use some of our reserves for this purpose. Surely our reserves would be sufficient to cover the cost of the aircraft for the purchase of which this Bill authorises a loan. These are the points that I think we would expect the Government to answer. Before resuming my seat I will simply predict that, as in all other matters, no-one on behalf of the Government will think it necessary to answer any of these questions.
– The honourable member for Yarra (Dr J. F. Cairns) has filled in a certain amount of time, but he has not contributed anything towards the debate except to query one or two points which related to the second reading speeches which were made when these Bills were introduced. The very information he is asking for was outlined very clearly in the second reading speeches which were made by the Minister for Air and Minister assisting the Treasurer (Mr Freeth) on two of the loan Bills and by myself on the Airlines Equipment Bill. The policy relating to the purchase of aircraft and the details of the loan arrangements were clearly outlined at that time. The honourable member could read those second reading speeches in Hansard or read the copies of them which were provided to him.
I wish to make one or two points on this occasion. Firstly, I wish to pay a tribute to the Treasurer (Mr McMahon) and to Treasury officers for what they have achieved in this field at a time when there has been extreme difficulty throughout the world in obtaining loans overseas. It is an indication of Australia’s high reputation throughout the world that we were able to obtain loans on conditions which are very favourable indeed on a comparative basis. Rather than being critical of the success of the loan raisings, as the Opposition has been, speaker after speaker, it should be joining with members on the Government side in paying a tribute to the Treasurer and Treasury officers for the success they have achieved.
The purchase of the Boeing 747s and 727s is part of a major re-equipment programme which I have announced in this House. That programme is continuing at present and will continue in the future. No indication has been given that the purchase of these aircraft is not part of that re-equipment programme. The honourable member for Cunningham (Mr Connor) referred to a number of points which would take a considerable time to answer. One point related to the noise abatement problem at Sydney (Kingsford-Smith) Airport. I have referred to this matter at great length in this House on previous occasions. Some of the statements I have made in the House and also outside it indicate that action is being taken by the International Civil Aviation Organisation on the initiative of Australia in this particular field and that the new engines developed for the larger jet aircraft will be quieter in operation than those already fitted to the existing Boeing 707 aircraft.
Unfortunately, 1 did not have the opportunity of hearing some of the debate on the two airline policy as I was engaged in Government business at the time. 1 understand that the honourable member for Perth (Mr Chaney) and the honourable member for Kooyong (Mr Peacock), whom I heard, referred to certain aspects of the financial policy relating to the two airlines. All I wish to say at this stage is that a number of the points that they raised have been under very careful consideration. In fact, I have announced that a review of the two airline policy is being undertaken. Certain aspects of that review have been completed whilst other aspects will be examined in the future. Quite a number of the points mentioned by the honourable members for Perth and Kooyong will receive consideration.
The honourable member for East Sydney (Mr Devine) queried a number of matters regarding re-equipment with Caravelle aircraft. By now he should be quite convinced, as I think are most honourable members, that it was the wisest decision the Government ever made not to get into that field. Our fleet is now composed of aircraft types which are suitable and economical for domestic operations. We are fortunate that we did not get into other fields at that time. He referred also to the duty refund which was made on the Boeing 727 aircraft and implied that there was something about this arrangement which was not quite orthodox. I refer the honourable member to the statement made by the Minister for Customs and Excise (Senator Scott) on this matter. The decision was taken on this matter after long negotiations with the Board of Trade in the United Kingdom, which is consulted in matters of this nature because there are certain aspects of the agreement with the United Kingdom which must be considered. But the matter is set out very clearly in the statement made at the time. It was completely in accordance with our rights under the agreement that the decision was taken at the time. Other matters have been mentioned which concern my Department. I will consider carefully the matters set out in Hansard to determine what action, if any, is necessary.
That the words proposed to be omitted (Mr Crean’s amendment) stand part of the question.
The House divided. (Mr Speaker- Hon. W. J. Aston)
Majority . . . . 22
Question so resolved in the affirmative.
Original question resolved in the affirmative.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Swartz) read a third time.
Consideration resumed from 24 October (vide page 2319), on motion by Mr Freeth:
That the Bill be now read a second time. Question resolved in the affirmative. Bill read a second time.
Message from the Governor-General recommending appropriation announced.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Swartz) read a third time.
Debate resumed from 24 October (vide page 2321), on motion by Mr Swartz:
That the Bill be now read a second time.
– I do not want to speak on the substance of this Bill but I should like to tell the House that I appreciate the co-operation which has been given by the Opposition, particularly by the honourable member for Melbourne Ports (Mr Crean) who is at the table, in enabling the House to consider these three Bills in a cognate debate. I think it has facilitated the business of the House.
Question resolved in the affirmative.
Bill read a second time.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Swartz) read a third time.
The following Bills were returned from the Senate:
Without amendment -
Wheat Industry Stabilisation Bill 1965.
Without requests -
Wheat Export Charge Bill 1963.
House adjournedat 1.12 a.m. (Thursday)
The following answers to questions upon notice were circulated:
asked the Minister representing the Minister for Housing, upon notice:
What requests or suggestions were made at the Housing Ministers’ Conference in Brisbane in July for legislative or administrative action by (a) the Commonwealth, (b) the Territories and (c) the States?
– The Minister for Housing has provided the following answer to the honourable member’s question:
The Conference held in Brisbane in July was a State Housing Ministers’ Conference. The Commonwealth was invited to attend to hear at first hand the views of the States. The requests and suggestions made by the State Housing Ministers to the Commonwealth for its consideration are summarised below:
Aged Persons’ Housing - The Commonwealth be requested to provide grants to State Housing Authorities similar to those under The Aged Persons Homes Act.
Home Savings Grant Scheme - The Commonwealth be requested to review its policy in respect of the Home Savings Grant Scheme so as to include houses constructed by a State Housing Authority with funds provided under the Commonwealth-State
Housing Agreement. Armed Services Housing - Clause 7 be deleted from the next Commonwealth-State Housing Agreement.
Urban Development - The Commonwealth Minister for Housing be asked to convey to the Commonwealth Government the view of the State Ministers that urban redevelopment is a matter of urgent national significance calling for maximum participation of all the appropriate authorities concerned at the Federal, Slate and Local Government levels.
Housing Research - The Commonwealth be asked to make grants to finance development and research housing projects approved by Commonwealth and State authorities.
asked the Minister for External Affairs, upon notice:
– The answers to the honourable member’s questions are as follows:
The General Assembly
Having considered the question of the representation of China: -
Believing that a solution of the question of Chinese Representation which accords with the principles of the Charter and the aim of universality would further the purposes of the United Nations and strengthen its ability to maintain international peace and security;
Believing that the complexities of this question require the most searching consideration in order to pave the way to an appropriate solution,taking into account the existing situation and the political realities of the area;
Cite as: Australia, House of Representatives, Debates, 13 November 1968, viewed 22 October 2017, <http://historichansard.net/hofreps/1968/19681113_reps_26_hor61/>.