27th Parliament · 2nd Session
Mr SPEAKER (Hon. Sir William Aston) took the chair at 2 p.m., and read prayers.
Want of Confidence Motion
– I move:
The Treasurer (Mr Snedden) concluded his Budget Speech on 17th August this year with this rather bold declaration:
On its own, the Budget cannot, of course, ensure that the nation’s objectives are achieved. But this Budget, concerned as it is with the high national objectives of social welfare, economic strength and national security, provides the essential framework for the attainment of these national goals.
In some of the small print in the documents which accompanied the Budget Speech the following statement appears: the likely economic effects of a budget can only be fully assessed in the context of the more important influences operating at lbc time in the economy as a whole. 1 wish firstly to outline briefly what might be described as national objectives as far as the economy is concerned and then to endeavour to look at some of the important influences and to suggest that, because of the way in which those influences are working, what is rather blandly described as the Budget strategy is no longer correct. I think it is probable that there is generally accepted agreement in Australia about the goals of economic policy. I would summarise them under about 6 heads. I do not necessarily put them in order because I think that they have to be integrated. One of the difficulties in Australia is that we are not able to pursue properly an integrated economic policy because of the failure of the Government to act in some areas in which it could act. The goals as I have listed them - 1 repeat that they are not necessarily listed in order of importance - are: Firstly, the maintenance of full employment; secondly, price stability; thirdly, a satisfactory rate of economic growth; fourthly, efficient use of resources; fifthly, equitable distribution of incomes in the community; and, sixthly and finally, what might be described as a balance of payments equilibrium. In none of those fields is the current performance of the Government satisfactory. 1 want to examine a few of these briefly, mainly by reference to documents that are published by the Government itself. One of these documents, for instance, is the most recent issue of the ‘Treasury Information Bulletin’ for the quarter ended September 1971. That document contains a table which shows an increase in civilian employment and it lists for comparison 3 quarters in 1970 and the same periods in 1971, the quarters ended February, May and August. Taking the figures for the 2 years - and these figures are seasonally adjusted - there has been a drop of over 43,000 in the rate of absorption in employment in 1971 as against the rate in 1970. Another ominous note - and this can be deduced from the employment statistics which are published monthly by the Government - is that as well as the increase in the number of unemployed and a slowing down in the rate of absorption there is also a reduction in the number of unfilled vacancies.
The last monthly review, that one for October, shows that the number of registered unemployed was 17,500 greater in October 1971 than in October 197!) and the number of unfilled vacancies was 11,000 less. In total at that time there were some 62,000 people unemployed, chasing about 40,000 available jobs. This total seriously camouflages the position as between unemployed in metropolitan a’td non-metropolitan areas, between skilled and unskilled unemployed, between males and females unemployed and between single and married people unemployed. In fact the statistics are strangely deficient in regard to married people unemployed. In fie non-metropolitan areas - those areas outside the capital cities - there are 3 males seeking each available job and nearly 4 ladies chasing each job available for Female employment. Two-thirds of the total male unemployed in both categories, metropolitan and non-metropolitan, are in 2 categories - semi-skilled and unskilled manual. In the latter category, unskilled manual, there were 8 people chasing each job.
Oddly enough, in the metropolitan area according to the statistics in regard to female unemployed, there were 9,800 job seekers and potentially 17,000 available jobs, which would seem to throw some doubt on the descriptive classification between jobs and job seekers. While the total unemployment figure is divided roughly into 29,000 in the non-metropolitan areas and 33,500 in the metropolitan areas the number of available jobs for the 29,000 people in the country is 9,000 and in the metropolitan areas there arc 32,000 available jobs. At least this points to quite serious regional difficulties as far as employment opportunity is concerned. So much for this question of employment.
I turn lo another matter, that of prices. If one quotes the ‘Treasury information Bulletin’, the consumer price index in the September quarter was 1.7 per cent higher than in the previous quarter. Again an ominous note - the rise was the largest for a September quarter since 1956. It should be pointed out that these figures do not yet reflect the consequences of increases in indirect taxes in the 1971-72 Budget, but merely carry on the devastation caused in the 1970-71 Budget, lt ought to be remembered, too, that it was the December quarter of last year that indicated the acceleration of inflation for that year. The major part: of the stimulus to an increase in inflation was the strategy of the 1970-71 Budget. The ‘Treasury Information Bulletin’ goes on to note in respect of the recent September quarter:
More than half the increase in the total index in the September quarter was contributed by the miscellaneous group - and it adds - due mainly to increases in the prices of health services and fares.
Again, those matters are in the hands of one or other level of government in Australia. Whilst the consumer price index rose by 6.5 per cent from September to September - that is, over this 12 months period - the wholesale price of materials used in house building rose by 7.3 per cent, and import prices, it is noted, also continued to rise strongly. Time does not allow me to catalogue more in the price field but in an economy where the majority of people who derive incomes do so as wage earners, the awful combination of falling employment opportunities and rising prices deserves more attention than it has currently been receiving from the Government. Basically, this is the reason for the launching of this attack.
I turn now to the matters that are more fundamental to the structure of the economy and, of course, if the structure of the economy is not working satisfactorily, it is little wonder that some difficulty is encountered in regard to employment opportunities. Again, the White Paper on National Income and Expenditure which was brought down with the Budget showed last year to have been a very poor one from the point of view of overall economic growth. That can be seen from the table contained on page 5 of the White Paper, which lists for a number of years the increase in the gross national product. As I have said, last year was the poorest one for many years.
The other clay the Treasurer seemed to be obtaining great solace from the fact that the recently issued estimates for the September quarter showed, I think what he in one place described as, a 12 per cent increase. 1 take it that the 12 per cent is the figure for the gross national product, and 1 indicate that at this stage it is a tentative figure, to say the least. By comparing that figure for the September quarter of 1971-72 with the same figure for the September quarter of 1970-71, the Treasurer deduces that the increase is of the order of 12 per cent. Of course, what he docs noi say is that there was something like a 7.5 per cent change in prices in the same period. Of course, if one is talking sensibly about economic growth in an economy whose population is rising, whose work force is increasing or ought to be increasing because of the rising population, and where prices arc also increasing, it is a very shallow analysis to compare one period with another period without making some adjustment for prices. Had the Treasurer taken the comparison between some other quarter - for instance, between the June and June instead of between September and September - he would have found that the performance difference was 10.6 per cent. However, in that same quarter there had been a change in prices of 1.7 per cent. If one adds 10.6 per cent and 1.7 per cent and tries to deduce that an index of 12 per cent is good, I think this again is merely indicative of the Government grasping at straws instead of grappling with problems. An economy is a sensitive kind of instrument. If you like, it is a mechanism or a system and I think it is about time that it was acknowledged that economics cannot be other than very slightly stimulated by an assorted rag bag of varieties for everybody which is produced one night in August and which is supposed to set the course for the rest of the year. As I said yesterday, if ever there were a Budget whose forecasts and estimates were wrong almost from the time they were written, it was the 1971-72 Budget. 1 suppose the Treasurer was unfortunate in that the Budget was written just prior to measures announced by the President of the United States of America with regard to America’s own economy. I submit that, on most of the evidence which is available from both government sources and elsewhere., there is no great indication that the economy is buoyant, lt is not fully stretched.
The other significant thing in an economy is that there should be efficient use of resources and that means not only natural resources, materials and so on; it also means manpower as well. In a country such as Australia, which cries out for so much basic development, it is a sign of gross mismanagement when there is any significant degree of unemployment at all. Now that it seems that unemployment is spilling over into the skilled as well as the unskilled field, unless it is grappled with it will become very hard to change in a very short time. One thing which was fairly evident both from the documents attached to the Budget and from observations contained in the Reserve Bank report and of the manager of the Commonwealth Trading Bunk is that, whilst the Austraiian Government rightly or wrongly was trying to pursue a certain kind of monetary policy, to a great extent that policy was being nullified by the abnormal inflow of capital to Australia. The previous Prime Minister made the rather astonishing admission as far back as February of this year that Government sources did not know where a lot of this capital was flowing. The feeling was that it was flowing into building construction other than dwelling construction. Again, the figures contained in the White Paper bore out that feeling because they showed a decline in real terms last year in building construction for dwelling purposes, but a significant increase in other
21 368/71 - R- 1138)
kinds of building. The White Paper showed also, when related to real terms, that there had been a decline in the provision of infrastructure^ - the expenditure by the States and the Commonwealth on public works. lt seems that that unabated flow of capital is still continuing. Surely, with all the devices that are supposed to be available to the Treasury and the Reserve Bank, it should be possible for some sort of control to be kept upon the flow of capital into this country. Surely if money comes in it should come in for purpose and not for speculation. Surely the Government can say it ought to be for purpose and not just for some speculative venture because the interest rate on investment is higher here than somewhere else. Tt might be difficult to exercise this control, but difficult tasks dismay this Government. But the misplacement of action i? wrought upon the ordinary people in the community and many of them are beginning to rebel.
The other economic goal I want to say a little about because time is running out - I will finish on this one - is the balance of payments and the equitable distribution of income. Despite what some people claim, we are not one of the most highly taxed communities in the world, but 1 would suggest that if proper tests were applied to the distribution of what is collected in both income tax and indirect tax they would show that we are one of the most inequitably taxed countries in the world. The present Prime Minister (Mr McMahon), to whom the previous Prime Minister did not regard as fit to continue as Treasurer, thought, when he was the Treasurer, that the taxation structure ought to be reformed. His successor as Treasurer, not liked by the next Prime Minister, thought so also and made a speech to that effect attacking the measures of his colleague. The present Treasurer (Mr Snedden) apparently pays some deference to the idea of taxation reform but there is no action. Whatever increases in taxation were made recently only distort the balance in favour of equity and against inequity. What about equity of distribution for that large section in the community which numbers now about one-quarter of the work force - that is, recipients of social service pensions of one kind or another, plus those who are on private and public superannua- tion and whose incomes are fixed? How have they fared as far as equity of distribution is concerned?
I come now to this question which involves both the balance of payments and this rather odd thing called the strategy of the Budget. Again I refer honourable members to the pages of small print in the Budget, the stuff that is written behind the scenes but which ought to be studied and which I am sure is studied but perhaps not as closely as it ought to be. On page 15 of the appendages to the Budget there appears a table headed ‘Liquidity and the Volume of Money - Analysis of Formation Factors Movements’. Plunked in the middle of that somewhere is this rather curious item ‘Budget domestic surplus’. I spoke about this matter in my speech on the Budget in August and 1 drew attention to the fact that it is not a plus as some people might imagine; it is a minus. At the bottom of page 15 of the document it states:
As the table shows, the Commonwealth Budget domestic surplus withdrew about $460m from the volume of money for the year 1970-71 as a whole. While this was less than originally provided for - 1 think the Treasurer indicated, using a rather choice word, that it had changed adventitiously’ during the year. . . and smaller than in 1969-70, it was nevertheless substantially greater than in other recent years. There was also in the last financial year a relatively large increase of about $277m in the holdings of Commonwealth securities by the non-bank private sector which added to the contractionary monetary effects of the Commonwealth’s transactions.
This year, the item ‘Budget domestic surplus’ is pitched, it is said, at a level of $630m. I ask honourable members to contemplate that this is not what mathematicians might call an independent variable. It is more correctly described as a dependent variable, unless the Government chooses to make it more independent than it would be, by itself taking action of an expansionary kind. But it is made up in the long run by additions arid subtractions from a curious entity called the volume of money. It is influenced by events from overseas. It is influenced by the policy followed internally by the Reserve Bank with regard to the purchase or selling of securities. These are what are called ‘open market operations’. It is influenced also by whether people in the business, and particularly in financial institutions, choose to invest in Government securities rather than something else. It is conditioned by the rate of interest. It is conditioned by the flow of capital from overseas.
We submit that in none of these fields has the Government indicated any measures as to the courses that it proposes to take. It may take certain short term and palliative processes, such as changing some of the taxes that it has imposed already, or by increasing social service benefits. Social service benefits ought to be increased for their own sake rather than as the result of some sheer, harsh economic doctrine. Or, the Government could get back to the old device of expanding public works particularly in the fields of education and health. But on the external impact of the economy, and despite what the Government says about the greatest contributor to inflation being the ruthless pursuit of wage demands, there is not any doubt that one of the contributants to inflation in Australia is that now we import it via the monetary system
In many respects, it was put rather broadly by a description that I have been reading which pointed out that by default, one might say, America is becoming the central bank of the world. This is not anything that any country should accept without some serious contemplation of it. The internal economic destiny of a country ought to reside in the control of its own money measures. But it is foolish to imagine that a country can isolate itself entirely from external events, least of all a country like Australia, which is one of the highest, external trading countries. When, rather curiously, exports and imports are added together and expressed in terms of gross national product, we find that Australia is one of the biggest traders in terms of total economy than are most economies. For that reason, items like the terms of trade and the rates of exchange are highly significant.
The Treasurer went overseas. The Prime Minister went overseas. They returned and they made certain veiled announcements about what was happening. But when we read what other countries are doing we see - I know that the Treasurer believes this as a theoretical principle, andI would support him - that trade is better if it is multilateral than if it is bilateral. If a country finds that pleasures are being taken bilaterally by others - and it is not endeavouring to match this by some kind of discussion itself - it is likely to be left out in the pace of events. Japan had talks with Germany. The United States of America had high-level ‘talks with Japan. There seems to have been visitations by various Ministers from Australia to Japan. But there has never been any significant high-level group meeting to discuss together with that country our mutual trade arrangements. I submit that it is time the Government took some action on that. 1 also submit that when it looks at all the indicators that are available to it and realises that the Budget is a past event - almost a non-event -it will see that it is time that it announced a constructive programme and above all that the Treasurer sunk his pride and admitted that the Budget strategy was not correct.
– Is the motion seconded?
-I second the motion and reserve my right to speak to it.
– It is natural that there will be criticisms of the way in which we respond to economic problems. That is politics. But it is almost ludicrous that the Labor Opposition should move this motion. It has given no indication that it has any economic policy at all. Yet it now claims this panacea for our current economic problems. The panacea consists of grabbing every criticism and making it its own. There was some uncertainty yesterday whether the Opposition would launch this motion. That is not surprising. The Leader of the Opposition (Mr Whitlam), touring the country on his mid-term election campaign, had no economic programme at all for Australia. I heard the campaign described as a fairy floss campaign: One lick and it vanished. I think the first licking was received on industrial relations. Where was his policy on economic management? Where were his solutions to one of this country’s most serious problems - inflation? All his proposals would feed it. Not once has be called for wage restraint. He dares not.
This is not the first time this has happened. He made a long speech in replyto the Budget. But there was no analysis of the causes of inflation. An opposition can attempttoobtain political advantage out of difficult international and domestic economic circumstances. But it can be regarded as responsible only if it has an economic platform for examination and review. The honourable member for Melbourne Ports (Mr Crean) catalogued his list of economic goals. He has made a series of suggestions. He does not examine reaction and interaction.
As briefly as possible, I will deal with his 6 economic goals directly. The first goal was that of full employment. What is his figure for full employment? Is it 1.14 per cent? He mentioned price stability. What is his attitude towards price stability? It is our major policy direction to achieve price stability. That is the essential element of the Budget. Does he find that a rate of growth of almost 5 per cent justifies censure of the Government?
Taking a 12 per cent gross national product growth from which the honourable member says must be deducted 71/2 per cent, on his own figures, although he may not be very good at sums, that still amounts to a 41/2 per cent growth. It is the wrong way of calculating growth, but even as the honourable member calculates it, it is a real growth rate of 41/2 per cent. He says he wants efficient use of resources. That is exactly what this Government wants and it is why it is pursuing these policies. It wishes to see that there is more efficient use of resources in a situation where there is not such a buoyancy of demand that there is no spur to efficiency. He wants equitable distribution of income. I am surprised that he is arguing in favour of the employers and profit margins. I have never heard him do so before. But if he looks at the statistics to which he has given a great deal of study he will know that the share of wages, salaries and supplements was 161/2 per cent in the June quarter and 15 per cent in the September quarter. Profits, on the other hand, were 34 per cent for the first quarter, rising to 6 per cent in the September quarter. Presumably he wants that corrected. It is a strange proposition coming from him.
The honourable member talks of balance of payment equilibrium. Would he now take a decision on the parity for our currency? Would he dare do that?If he does, let him say so now, for there would be no doubt that he would be acting against the interests of Australia and acting in a positively foolish manner to take that decision now. In the course of these economic goals about price stability and the equitable distribution of incomes which he spelt out, does he embrace an income-prices policy? If he does, let him say so directly. There has never been a word out of his mouth in relation to that subject.
There is no real substance to the motion when it is measured against the totality of the Government’s economic policies and the facts of the economic situation. This is true whether we consider immediate policies or the Government’s longer term policies and the high objectives these policies are designed to achieve. Confronted with an alarming inflationary trend, the Government formulated its Budget to attack inflation and at the same time to ensure the continuance of economic growth. The honourable member for Melbourne Ports has certified that that was the correct policy to attack inflation and has acknowledged that the Government has achieved real growth. These 2 things were the central elements of the Budget policy announced in this House. There has been some considerable misunderstanding of the Budget strategy which I expressed in my Budget speech to be ‘to combat the inflationary forces now running in the economy’ yet ‘not discourage the real growth of the economy’.
It has been asserted that the Budget was designed to depress demand. True, it was an essential element of the Budget to avoid excess demand, but it is not true that the Budget strategy was to depress demand. The Government wishes to avoid the development of a situation of intense competition for resources, including labour, and excess competition in the market for consumer goods. If those conditions exist there can be no avoiding inflation of costs and prices. Who needs reminding that such conditions are in nobody’s interests except those who profit by speculation, or that great social harm and economic costs are involved? Inflation imposes great social burdens on the family man, the low income earner and those on fixed incomes while our rural producers and our manufacturing exporters selling on world markets know the economic problems of inflation. If unchecked, inflation will undermine our present living standards and erode the capacity and promise we have for the future.
The Government is committed to fighting inflation. No-one can sensibly challenge that commitment. To do so would be to deny the interests of all in the community except the clever and the powerful. The background to the problem shows the emergence of an accelerating trend in wage costs. Average earnings rose by 5.8 per cent, 7.5 per cent and 8.4 per cent in the 3 successive years to June 1970. By then demand was running towards excess, employment was over-full and consumer prices were accelerating. Quite properly and with widespread support the Government acted, through a combination of fiscal and monetary policies, to meet those inflationary developments. There were some signs of success. Prices and wage costs both seemed to be in the process of moderating, lt is unfortunately a matter of history that, in the event, price increases did not moderate in 1970-71. On top of the 6 per cent increase granted in the national wage case there were large rises in other award and over-award payments as well as a strong rise in the prices of imports. It is no wonder that a startled public saw consumer price increases amounting to over 6 per cent per annum.
The Government, in early 1971, took action to impose restraint in areas where restraint seemed to be necessary - public spending, private investment in new plant and equipment and non-dwelling building construction. Given this background it was natural that, accompanying the strategy adopted in the last Budget, was an element designed to guard against the future development of excess demand pressures. The more especially so because we had a very high level of liquidity, soaring savings and every prospect of continuing high wage increases - all the factors which pe-rmit, in appropriate circumstances, a surge of consumer spending. If it be accepted, as it must be, that our problem was difficult anyway, it would have become impossible with the classical demand pull inflation dumped on top.
Now, 3 months later, when liquidity is even higher, savings have grown still bigger and wage claims continue to be won, nothing has happened which causes the Government to weaken its resolve to tackle inflation. Equally, we have not retreated from my statement in the Budget Speech in which I said:
We will be keeping the whole situation under very close review … so as to make any adjustments in policy which might prove necessary.
This has been reiterated by the Prime Minister and by myself. This statement contains an important principle of economic management. Short-term economic policy involves a measured response to changing circumstances. An economy is dynamic, flexible and continually moving. A growing economy such as ours is going to show variation and change; thus it must be expected that policy will require adjustment from time to time. That is our position. That was the view I put in the Budget Speech. To see it otherwise is to misunderstand the position. A flexible approach does not mean abandoning our objectives; it means adjusting in a measured way to changing circumstances. It follows, contrary to assertion, that any economic action we may take would not negate the whole Budget strategy.
It is quite unreal to believe that a government presenting a budget is committed totally and without any margin for flexibility until the following August. No government could adopt such a stance, and we certainly have not. We have demonstrated this flexibility. As the Prime Minister indicated not so long ago, we have taken measures to ease financial conditions. We have confirmed the lower pattern of yields on Commonwealth bonds which had emerged in the market, and in the significantly lower rates of interest on securities offered in the recent November Commonwealth loan. These reduced yields were welcomed as working towards easing the cost of finance to the private sector. We have also eased restraints on bank lending. The Reserve Bank, after consultation with the Government, informed the trading banks that no objection would be raised to some increase in the level of their new lending to enable them to take advantage of their improved liquidity prospects.
But let me return to the continuing problem of inflation. We know that cost increases are readily translated into price increases where demand is unduly strong. Equally, we know that conditions in the wage-fixing sphere as they now exist mean that wage rises in one sector of the economy are quickly translated into other sectors and throughout the economy. As a Government we have opposed, and will continue to oppose, excessive wage claims wherever the opportunity arises. We intervened in the carpenters case in an effort to stem as far as possible the flow-on from the large metal trades award to other areas of the economy. We opposed in the strongest possible terms the claims made in the annual leave case - claims which, if granted in their entirety, would mean a rise in wage costs perhaps even larger than the 1970 national wage case decision. We will intervene in the national wage case listed for early next year to argue in the strongest terms the necessity for wage restraint. But, just as demand management is not the whole answer, wage restraint is not the whole answer either. It is an essential but not sufficient requirement for price and cost stability.
Many sectors of Australian industry lack the spur of real competition as a stimulus towards greater productive effort. We have looked for ways of strengthening competitive forces from within and without the economy. That we have had some success may be measured by the pressures from some sources to return to the comfortable days of the ‘boom’, which is when our present problems were born. We have introduced legislation banning the practice of resale price maintenance. Although the results of this action are not readily quantifiable, I am confident that it wilt contribute to a general environment conducive to a moderation in the rate of inflation.
In the same manner the Government has set in hand a progressive review of the tariff. By ensuring that protection is made available only when it is needed for economic and efficient industry - in particular, by eliminating ‘unused’ protection - the review could have a salutary effect in moderating the ability of businesses to accede to inflationary wage pressures and pass on the resultant cost increases in the form of higher prices or, where it occurs, to seek increased profits through unjustifiable price increases. Further, following the High Court of Australia’s decision in the concrete pipes case, the Government has introduced legislation to overcome the constitutional defects that were found to exist in the Trade Practices Act, while it completes its examination of ways of strengthening the legislation.
In recognition of the role higher productivity can play in combating inflation in the short term and making living standard advances in the longer term, the Government has promoted training schemes both generally and in specific areas. These are longer term measures, of course. It would be wrong to suppose that they will produce dramatic results overnight. But they are, I believe, vital components of any antiinflationary strategy.
I tura now to deal with the remarkable level of capital inflow into Australia, which was referred to yesterday by the honourable member for Lalor (Dr J. F. Cairns) and which has been referred to today by the honourable member for Melbourne Ports. The type of statements they make about capital inflow are quite uninformed. Capital inflow was about S 1,400m to September 1971 compared with about $850m for the same period last year. A good deal of work has been done by the Reserve Bank of Australia to find out some of the ways in which the very large increase in 1971 has come about. It has analysed the exchange control approvals. Total approvals for the period were $l,630m, of which $3 20m was for the acquisition of shares, etc. - about the same as last year - and $1,3 10m was for loans, which was $760m more than for the same period a year earlier. It is clear that a major part of the extra inflow was in the form of loans.
That, I think, negates the proposition put yesterday by the honourable member for Lalor that if the present position keeps up we will wake up one day and find Australia owned by foreigners. That is a nice emotive phrase but it bears no semblance to reality. Some of the approvals were loans from overseas principals to companies in Australia which they wholly or partly owned. Some $770m of loan approvals was for borrowings from all overseas sources by companies which have substantial overseas ownership. But $540m was for borrowings abroad by companies predominantly Australian owned. The last figure increased sharply from a level of $110m in the corresponding period of the year before. It is clear that Australian owned businesses have found it possible to borrow abroad much more freely in 1971 for the development of their own projects.
Two other comments about the inflows can be added from this source of analysis. Firstly, the approvals of loans connected with mineral developments have continued to be very substantial. Secondly, there is some indication that the periods for the repayment of borrowings approved have tended to lengthen. The analysis shows that of the loan approvals for which repayment schedules are available almost onehalf provide for repayments after a period of more than 18 months. Where is all this hot money? ‘Hot money’ is described internationally as money that comes into a country for a very short stay in order to attack a currency and force a change in the parity so that a capital gain can be made. There is no evidence that such a situation is occurring in Australia. The reasons for the increase in the loans are the greater sophistication of loan companies in the non-bank area in Australia to raise money and also, of course, the confidence that people overseas have in Australia. The most significant reason, in fact, for the inflow is the confidence others feel about Australia’s future. It is paradoxical that the range of statistics and onthespot reporting which builds that confidence are somehow interpreted by many here as cause for despondency.
Three months after the Budget what do the figures show as being the health of the economy today? The Commonwealth Statistician’s national accounts for the September quarter have just been released. True, they have been thrust aside by the honourable member for Melbourne Ports. Others will find them of great importance for they are the most comprehensive figures for the economy as a whole that we currently possess. They show the gross national product increasing over the past year. September to September, by 12 per cent in money terms, and an acceleration in the real growth of the economy. They show the nation’s exports booming, with a rise of ISi per cent over the year; private investment spending up 14 per cent; houses up - well up on last year. They show wages up by 15 per cent and a recovery in business incomes. These figures are not cause for gloom or despair. It would be absurd to look at these figures and suggest the economy is in disarray. It is no wonder that the honourable member for Melbourne Ports cavalierly swept them aside from his consideration.
I now deal with 2 factors of our economy which have been given opposite treatment by commentators. The first factor is that our economy is growing and growing well. In 1970-71 real output grew by almost 4 per cent and the September quarter of the national accounts, to which I referred, shows that growth, if anything, is gaining strongly. This is a good performance by current international standards, especially when the problems of the rural downturn are taken into account. The United States economy grew hardly at all last year. The output of the United Kingdom is growing by only 2 per cent and that of Germany by scarcely more. Some Western European countries are doing worse than that. Even Japan, hailed as the miracle economy, is unlikely to achieve, some say, its revised growth target of about 5 per cent this year. So let us not sell ourselves short. Our current growth performance, in the face of the problems which we face in the rural sector, measured by what would have been possible in the past in like circumstances is an extremely good and creditable one.
We have also, at least until recently, been doing relatively well in the battle against inflation compared with other countries. Comparing the average price level in 1968 with the average 3 years later we see that there was a rise of just over 1 1 per cent in Australia. This, we acknowledge, was too high. This is what our strategy is to tackle. But there are few developed economics which could match us and many did much worse, such as Japan, where the increase over that period was 20 per cent, and France with 18 per cent, and the United Kingdom with 24 per cent.
The second factor is unemployment. Some commentators have lost perspective on this issue of unemployment. Some have deliberately abandoned it. The fact is that unemployment is currently al about the longer term average. Over the last 15 years unemployment has averaged 1.41 per cent of the work force. The latest seasonally adjusted figure for the end of October was 1.48 per cent, and with 63,000-odd registrants 1.14 per cent actual. There is therefore nothing in the situation to take alarm at. In absolute numbers, of course, there will be an increase over the months immediately ahead as school leavers and university graduates enter the labour market and seek their niche in the work force. Over more recent years we have had a tight labour situation. This has been particularly so in the past 3 years when unemployment, averaging 1.12 per cent of the work force, was lower than in any other 3-year period in recent times. With unemployment at these ultra-low levels, conditions are such that many employers are bound to be competing against each other for scarce labour, pressure for excessive wage rises is most likely to be successful, and wage costs and hence prices are most likely to escalate.
International trading circumstances which have brought a downturn in world basic commodity prices - recently made more difficult by world monetary problems - have brought in their train difficult conditions in the rural areas. There are very real problems which have resulted in diminished prosperity and demand in that sector. In consequence, there has been a tightening of job opportunities so that unemployment in the non-metropolitan areas now totals almost 29,000 compared with metropolitan unemployment of 33,000. This is structural unemployment of the geographic kind; with people committed to continue living in these areas, where there are few jobs, because of various social and psychological attachments. The Government is tackling broad rural problems which I will not detail here, but it must be recognised that general economic policies will nol substantially affect that situation. In metropolitan areas, on the other hand, there is an approximate balance between available vacancies and registrants.
I cannot report as optimistically about the attack on inflation, although I believe we are in a position to gain ground in the struggle against rising costs and prices, while we maintain our economic strategy. An examination of the consumer price index for the September quarter shows that the rises in a number of groups were more modest than we might have expected. The food group was up by 1.1 per cent, clothing and drapery by 0.5 per cent, and household supplies and equipment by only 0.2 per cent. It was the miscellaneous group, with large rises in fares, especially in Sydney, which pushed up the total rise in the index to its 1.7 per cent. We must not expect a dramatic turnaround. Too many large cost rises have to work their way through the economy yet. The battle will not be easily won, as overseas experience shows.
I have sketched out the essential facts of our economic reality. I have stated as clearly as I can our aims and the economic management methods adopted to achieve them. We believe that our economic policies will not discourage the real growth of the economy. There is scope for growth in the demands of the private sector. There is scope for a real lift in the standard of living which should be shared by many who would otherwise be the undefended victims of inflation and the self-seeking of stronger, more aggressive groups.
On their own, economic policies cannot ensure that the nation’s objectives are achieved. But concerned as they are with the high national objectives of social welfare, economic strength and national security, they provide the essential framework for the attainment of those national goals. There is no reason for the lack of confidence apparent in some sections of the community. The underlying strength of the Australian economy is real and I believe will be enduring. Every objective test argues this when compared with past performance in Australia. We are doing very well by world standards, so well that it is difficult to name a country which would not willingly swap its problems for ours.
It is no approach to the future to urge conflict between sectors and to preach fear and doom, as seems to be the Opposition’s mood. That is a philosophy of despair and defeat. We have great resources, a skilled and mobile work force, many talented and devoted executives and entrepreneurs in industry and commerce. We can do better, and with the conscientious participation of all sectors in the community we will secure the nation’s high objectives. The Government will do its part. This motion ought to be rejected.
– So that the Treasurer (Mr Snedden), the Government and its supporters may have an adequate idea of what is the Australian Labor Party’s economic policy and what it would do to remedy the present situation, I seek leave to have incorporated in Hansard an extract from the Platform, Constitution and Rules of the Labor Party.
– How extensive is it?
– It will occupy about a column and a half of Hansard.
– Is leave granted? There being no objection, leave is granted. (The document read as follows) -
V: ECONOMIC PLANNING
Institute indicative planning and programmed budgeting for economic growth and social justice by the Commonwealth, in co-operation with the States, local authorities and organisations of employees and employers; this planning to be consistent with the maintenance of full employment and the conservation of natural resources.
Balance the functions and finances of the Commonwealth, States, regional and local authorities to ensure that resources are adequately developed and services adequately provided.
With the object of achieving Labor’s socialist objectives, establish or extend public enterprise, where appropriate by nationalisation, particularly in the fields of banking, consumer finance, insurance, marketing, housing, stevedoring, transport and in areas of antisocial private monopoly.
Identify, publicise and otherwise expose unfair prices or practices and the exploitation of consumers and in conjunction with the States to operate Australia wide price control. This policy to be supplemented by the use of power of government to purchase goods and place orders.
Legislate against monopolies and strengthen existing trade practices legislation.
Assist small primary producers, retailers and others to adjust to changing economic conditions by expanding Agricultural Extension Services, by using Rural Reconstruction Boards, by establishing a Small Business Administration and by instituting programmes to retrain and resettle small producers and retailers.
Regulate hire purchase, fringe banking and other credit-creating institutions, in order to control effective demand.
Use selective interest rates, particularly in areas such as housing.
Sever the Postmaster-General’s Department from Public Service Board control.
Establish clearer guidelines for overseas investors, for the benefit both of these investors and of the Australian community. Overseas investment in Australia to be encouraged only where it introduces new technology and expertise, includes plans for Australian participation in the enterprise, and/or otherwise shows itself to be in Australia’s national interest. 11. (a) Reserve income tax exclusively to the
Review the Australian taxation system, especially in order to
reduce taxation on lower and middle incomes;
adjust the system of deductions to avoid inequities;
prevent avoidance of taxation by formation of companies, trusts, partnerships, or in any other manner;
re-define ‘income’ for taxation purposes so that a fair share of taxation will be paid by those who benefit from the accumulation of assets;
tax company income at graduated rates;
redress the incidence of indirect taxes on essential goods.
Protect Australian industries, where necessary, by tariffs, import controls, and/or subsidies in order to safeguard Australian living standards and to develop Australian resources. The use and level of, and choice between, means of protection to be determined after examination and report by an independent, fully equipped, government authority which will consider, among other things, efficiency, growth prospects, trade practices and pricing policies.
– Today Australia faces not only inflation but also unemployment and it is unemployment and not inflation that is likely to get worse. As the Treasurer told us, the Government still assumes that inflation is the only problem and that there is no problem of unemployment. The Government takes this position because it needs inflation for its election policy. It believes that it needs to be able to attack wages and to attack the trade unions if it is to have any hope of winning the next election. Its whole economic policy is geared to that proposition. As the Treasurer has just shown us, the Government is not here for the purpose of analysing the economy to arrive at a policy which will be in the best interests of the Australian nation; it is here to use the economy for political purposes. Anyone who knows where the Government is going knows precisely what it is doing. During the course of the next few months it intends to conduct propaganda against wages and against the trade unions in the hope that it can get re-elected with a policy of that kind. However, it is not inflation but recession and unemployment that must be dealt with now. We are in a man-made recession and the men who have made that recession are members of the McMahon Government.
It is not difficult to deal with an economy that is depressed and faces rising unemployment. The Australian economy today is depressed and it does face rising unemployment, but it is not difficult to deal with those problems if there is in office a government that is willing and determined to do so. Many things are needed today, but measures that are general and appear to apply equally to everybody are unjustified and unfair. Most of those who recommend action to deal with unemployment or inflation seem to assume that everybody in the country is in the same position, but everybody in the country is not in the same position.
I shall outline to the House and to the people the kind of policy the Labor Party would put into operation if it were in office at the present time. There should be no doubt whatever that, at present, sickness and unemployment benefits should bc increased substantially. No Australian should be required to live, even for a short period of time, on the miserable pittance that is paid out today and has been paid out for years in the form of unemployment and sickness benefits. There should bc no doubt whatever that agc and invalid pensions should be increased now. There should be no doubt whatever that assistance to lower income families, especially to their children, should be increased now. There should be no doubt whatever that interest on borrowing for homes should be reduced now so that people who need homes can get them under more favourable circumstances than exist today and so that tha allocation of building resources will be moved a little more from the elaborate over-supplied buildings in the urban and city areas to provide homes for the people. There should be no doubt that interest on hire purchase for lower income families should be reduced now. There should be no doubt that taxation on lower incomes should be reduced now. There should be no doubt that the nation needs a supplementary budget now to do at least these things. No Parliament has the right to have confidence in a government that can sit idly by as this one has done and refuse to introduce in the form of a budget supplementary measures which are so widely recognised as being necessary.
The problem of unemployment must be dealt with. Unemployment is dealt with first by quickly finding out where unemployment is. Especially, it is in the rural areas. Over 40 per cent of unemployment among a far smaller percentage of the Australian people is in rural areas. If there are not plans already in existence for the provision of work in those areas, they should be immediately worked out and financed directly by the Commonwealth or by the Commonwealth in co-operation with the States and local governments. There is no area in Australia where urgent work is not waiting for money to enable it to be done. In present circumstances, that urgent work should not be kept waiting for another hour; it should be done now. Confidence cannot be held in a government which has allowed unemployment to increase in the country, which is prepared to see ghost towns develop where people previously lived, and which is prepared to see people drifting ofl’ into the cities where already there are too many people. However, the Treasurer has just told us that there is no cause to take alarm - everything is near enough to perfect and there is no problem in the provision of money now.
Much of the unemployment problem results from cutbacks in primary industry and from pessimism in the country. Much of the unemployment in the cities is in industries affected by these cutbacks and by this pessimism in the country. Industries supplying seasonal rural needs require long term loans and, to help them with seasonal fluctuations, they need the exports that are available, if the exports can be insured adequately and sold on long term finance. The Government has recognised the need for this for years but has done nothing substantial to assist these industries. A Labor government in office would ensure that industries that rely upon seasonal changes in Australia will have sufficient finance to carry them over those seasonal fluctuations. Labor in office will ensure that industries that are in a position to export from Australia will have established for them the necessary shipping, credits and insurance that will allow them to do so. These conditions have not been established yet although there has been recognition for years of their urgency.
Another example of what needs to be done concerns the hundreds of millions of dollars of foreign money which is flowing into Australia for speculation. Much of it is aimed at taking over Australian industry. I say that the figures which were recently quoted by the Treasurer gave no real information about what that money is doing. The take-over of Australian industry is taking place and the Government is still unconcerned about this, although some Government supporters, like the right honourable member for Higgins (Mr Gorton), have recognised the need to control this inflow of capital. Every Australian recognises the need for this, but months and years pass and this Government, which is committed to those people who are bringing in the money in one way and another, will do nothing to bring about some kind of control. A Labor government in office will not rely On capital inflow.
It will be our responsibility to put trade back on to the map for Australia. The closing of markets relatively in the European Economic Community need not be a tragedy for this country. We need not cry tears like the Minister for Trade and Industry (Mr Anthony) does and we need not be ineffective. There are markets open in the world today for Australia that can revolutionise trade in the next decade ot decade and a half. However, I submit to this House that this Government is not able to trade with countries like China. If we sell just a few dollars worth of commodities per head to the Chinese people in a year, we can double our hade overseas in that time. But the Government of China is not willing to trade with a government of the political complexion of this Government which has a bias on political questions. There is no need for pessimism about rural industry in Australia. It has a future, but only if there is a government in office that t is capable of leading this country into the new market* of he world which will become available dramatically in the next decade or so.
Yet another thing I think has to be revealed. The Treasurer has been talking much about wage restraints and inflation, but official figures of the Commonwealth Commissioner of Taxation show that in relation to these things people in this country are in a very dissimilar position. Those figures show that about 50 per cent of Australian taxpayers have an income of less than $50 a week and that 90 per cent of them have an income of less than S80 a week. Those figures show that in 1968-69 over 70 per cent of the people of this country had an income of less than the average wage. When we talk about inflation and wage restraints we should realise these things.
The difficulties can be further revealed when we look at national figures for personal consumption. Between 1965-66 on the one hand and 1970-71 on the other hand personal consumption expenditure as a percentage of gross national expenditure fell almost every year. From 59.7 per cent in 1965-66 it had become 57.4 per cent in 1970-71. It comes as a shock to most people to realise that there has been such a significant fall in personal consumption expenditure as a percentage of total expenditure in recent years. What kind of a country is it that is said to bc so rich but in which personal consumption fell so dramatically against other forms of expenditure? Further examination of personal consumption expenditure reveals why it is falling. Figures show that expenditure on food was 22.6 per cent of total personal consumption expenditure in 1965-66 but it had fallen to 20.1 per cent in 1970-71. Who in 1970-71 went without the food they had in 1965-66, and why was this? It was not necessary except as a result of what has been happening in the economy.
Those people who cut their expenditure on food and other essentials had to do so because they were endeavouring to maintain what was even more essential. We know what they had to do with their money when we realise that the percentage of consumption expenditure that was needed to pay rent and other costs of housing rose from 11.6 per cent in 1965- 66 to 13.2 per cent in 1970-71. The cost of housing went up all the time and people were forced to pay more and more of their earnings in this direction. The Treasurer has recently skated over this and has said that we have nothing to worry about in the housing situation, In 1969, before the credit squeeze came, 38,000 home units were being turned out each year. This year in the September quarter the figure will be 36,000, despite the fact that 300,000 migrants have come into the country and there have been 212,000 marriages in the meantime.
It is ridiculous and unfair to talk about wage restraint and the contribution of wage earners to inflation when we realise that this has been going on in the economy. The 90 per cent of people who receive less than $80 a week know this all too well. They know they have no power to cause inflation or anything else. They know that their wage increases, when they have come, have come slowly after a great deal of delay, bureaucratic fiddling and legal arguments. They know that their wage increases are never higher than is necessary to maintain their normal living standards. They know they have to give up some of those essentials if they are to maintain the things that are even more essential. They know their standard of living would actually fall if wage increases did not come. They know also that prices have increased before they get their wage increase. They know that in many cases they have to prove that price increases take place before they can get a wage increase. They know from their actual experience that that which causes price increases is not in their hands but in somebody else’s hands, and they know that it is from prices that inflation comes.
When inflation is taking place, of course, wages increase. They have to increase or the standard of living of the people would drastically fall, before long industry would not be able to sell its products at satisfactory profit, and there would be a recession or depression because of insufficient demand. But when there is inflation and wages increase, other incomes increase quite rapidly and prices increase too. The incomes of investors, financiers and speculators increase by far more than wage increase. The originating causes of inflation lie not in wage increases but with those who have independent power to increase prices or to get their hands on enough money to be able to originate new expenditure. To do this they must have power to acquire or create new money. They have this power when they are in control of large monopolistic corporations which can take from the consumer for the sale of its products enough to spend in new investment, in take-overs and in many other ways. The time has now come when the greater part of total private investment comes from these directions.
When we turn to recession, we see that the causes of it lie clearly with those who hold economic power. Recessions are man made. Inflation is caused by those who control corporations, banks and by the Government. Recession is caused by the same people. The way inflation has come into existence in Australia can be seen by what has happened to expenditure. All recorded forms of expenditure have increased but persona] consumption expenditure has fallen as a proportion of total expenditure. But what has risen? Expenditure by financial corporations rose from 13 per cent of the total in 1965-66 to 14.9 per cent in 1970-71. Expenditure on private capital investment increased too. These statistics show that financial enterprises and private investors filled themselves out to an ever-increasing share of total expenditure during these inflationary years. At the same time the stock market was booming. Shares such as Broken Hill Pty Co. Ltd shares rose to $25 each and millions of dollars flowed into the mineral boom. Government supporters talk about what caused inflation and mention only wages and trade unions. They never talk about speculation and stock exchange activities. There was no talk about stock exchange control or any other sort of control during the mining boom, but that was where inflation in this country originated and that is where the causes of it lie. Can anyone doubt where inflation began, who began it and who carried it on until in some respect it was no longer profitable?
Inflation begins with the people who have money and who have economic power, and until this is recognised by the Government nothing of any effect can be done about controlling inflation. Inflation is the result of the exercise of economic power and the people who are responsible for it are responsible in the proportion to which they do have economic power. The average wage earner knows that he can do nothing to cause inflation. He is the victim of it. Inflation is the result of the spending of millions of dollars, and no person can cause or carry on inflation unless he is among those who control millions of dollars. It is quite false to talk about controlling inflation by stopping wage increases and by dealing with trade unions. Properly inflation can be dealt with by preventing ‘t from happening in the first place. To talk about dealing with inflation by an incomes and prices policy after it has got under way is humbug, and it is only after inflation is well under way that we have people on the other side of the House becoming interested in incomes and prices policy. To stop inflation from happening those who hold economic power must be required to fit within a national plan for priority development without inflation.
That is why I say that the policy of the Labor Party as outlined and which I sought leave to have included in Hansard in the first place is a policy which is necessary to deal with inflation and prevent recession in this country. Until we have a government in office that is prepared to put into operation the plan similar to that which is now detailed in those columns of Hansard we will have no way of preventing the fluctuations that have destroyed so many of our chances and opportunities in the last 20 years for great and stable economic development equitably and fairly for the people. Until a policy of that kind is adopted no-one can have confidence in a government in this nation, and because of the absence of that kind of policy the motion moved by the honourable member for Melbourne Ports (Mr Crean), that this Government lacks the confidence of the House, is a motion that everyone in the House should support. Until the people get the opportunity to express their dissatisfaction with the economic policies and bankruptcy of this Government in the last 4 or 5 years we will never have a satisfactory government in this nation.
-Order! The honourable member’s time has expired.
– The honourable member for Lalor (Dr J. F. Cairns) apparently takes the view that it is not excessive wage increases which are the pivotal cause of inflation in this country.
– That is right
– This is a specific point to which 1 will return later in my speech on the motion before the House. I do submit today that this motion is completely lacking in substance, utterly hypocritical and positively mischievous. It lacks substance because the Australian economy is strong, enduring and resilient and has a record of growth with high employment almost unequalled in the western world. The motion is hypocritical because the major economic problem we face today is that of cost inflation and the policies advocated by the Opposition are guaranteed to add greatly to cost pressures. Finally, the motion is mischievous because consciously it is helping to undermine confidence, and thereby causing positive damage to the prosperity of our economy and to the people of Australia.
National production and employment statistics just released by the Commonwealth Statistician leave no doubt that the economy is firmly set on an expansionary path. Let me take a longer term view, and place our growth experience in an international perspective. In the 10-year period 1958-59 to 1967-68 real gross national product increased at an average annual rate of 5 per cent in Australia. In the same period according to statistics from the Organisation for Economic Co-operation and Development, the United States showed an average growth rate of 4.6 per cent, Canada 4.8 per cent, France 5.6 per cent, Germany 4.8 per cent, md the :United Kingdom 3.2 per cent. In the last 3 years, 1968-69 to 1970-71 real GNP showed an average growth rate of nearly 6 per cent in Australia. In the same period the average growth rate is estimated at less than 2 per cent in the United States, less than 41 per cent in Canada, about 6 per cent in France, about 5i per cent in Germany, and less than 2 per cent in the United Kingdom. Consider also latest available Australian employment figures published by the Commonwealth Statistician. In the 3 months to August 1971 the number of wage and salary earners in civilian employment was some 3 per cent higher than in the same period of 1970. This rate of increase is not quite as high as in some periods in the past but it is still one of the highest in the world.
I turn specifically to the question of unemployment which has been so stressed by the Opposition. As Minister for Labour and National Service I have a most deep concern for this question. The social and economic benefits of full employment are simply immeasurable. It is the best insurance Australians have against poverty and economic stagnation, lt has made possible rising living standards, job satisfaction and self-fulfilment, and has promoted the dignity of the individual. These benefits are too precious and too important for any government to place at risk. Having made this clear it is important to place the facts about unemployment in their proper perspective and 1 want to make 4 points very strongly today.
First, Australia’s post-war experience offers eloquent testimony of the Government’s capacity in regard to full employment. Over the last 15 years, the unemployment rate in Australia has never exceeded 2 per cent seasonally adjusted except for a brief period in 1961-62 and has averaged some 1.4 per cent over the period as a whole. There is no doubt that this experience compares very favourably with that of overseas countries. International comparisons of unemployment are always difficult because of differences in coverage and definition, but on the basis of seeking to adjust unemployment statistics to a common United States of America definition, Australia’s unemployment rate over the last decade on this basis has generally been between one-third and one half as great as in United States or Canada, lt has also been substantially lower than in Britain, France and Italy. Only Germany and Japan have had marginally lower unemployment rates on the whole than has this country.
The second point I want to emphasise is that our current unemployment rate of 1.48 per cent seasonally adjusted, although marginally higher than a year ago, is comparable to the average achieved in Australia over the last 15 years and is considerably lower than the rate currently prevailing in the United States, Canada, the United Kingdom, France, Italy or Sweden. It is roughly the same as the rate in Japan and slightly higher than the rate in Germany, where, incidentally, unemployment is currently showing a marked upward trend. The third point I want to make in relation to unemployment is that no government can hope to maintain continuously a rate of employment fixed between narrow limits. The economy will always be subject to some fluctuations and there is a need to keep a continuing close review of the situation. The Government has made dear that if any new measures are required to deal with unemployment we will take them.
The fourth point 1 want to make is that the unemployment problem we are currently faced with is largely ‘structural’ in character. For example, it is due Jess to an overall shortage of jobs in Australia as a whole than to a ‘mismatch’ between the characteristics of the jobs available and the characteristics of the job seekers. In the shorter term there is the question of placing in employment the coming year’s school leavers. Some members of the Opposition are painting and have sought to depict a gloomy picture about the employment prospects facing these school leavers.
The actual number of unemployed registered with the Commonwealth Employment Service always rises at the end of the school year, as school leavers make their decisions to enter the work force. But this is a situation which the Government has successfully dealt with in past years. It is difficult to estimate with any precision how many young people will be seeking to enter the work force during the next 3 months or so, or, indeed, how many will be completing their secondary education. Much depends on the actual decisions young people themselves make. For example, depending on results of examinations and opportunities available to them, they may decide to return to school for a further year or go on to higher education. However, we would expect the number of school leavers and tertiary leavers entering the work force to be, in round figures, approximately 190,000. Experience of the Commonwealth Employment Service in recent years, including last year, has shown that young people seeking to enter the work force have been readily placed in employment, even though for some people it might have taken .some weeks to arrange employment of their choice.
Some of this year’s school leavers will probably find a little more difficulty in arranging employment of their choice than has been the case in recent years. In some instances they may not have such a wide choice of jobs open to them. This will depend on the recruitment policies of individual employers and these policies tend to vary from one year to another. While naturally my Department and I are watching the position very closely, on the basis of the l>est advice which is available to me from my Department I am informed that there is no occasion in relation to the placement of school leavers for undue concern. I can see no reason why the Commonwealth Employment Service, which has so successfully assisted with the placement of so many young entrants to the work force in the past, will fail to cope in this task this year.
The major problem in Australia is that of cost inflation. The Government’s current economic policies are directed towards this problem. I must therefore emphasise to the House that these policies are designed in the long run to secure and to protect the level of employment in this country. If the Government took risks with demand and tolerated an economic environment favourable to cost-push inflation, the economy and the balance of payments could suffer serious damage. This would pose a lasting threat of full employment. By taking earlier remedial measures, we are in fact preventing a serious increase in unemployment in the longer term. The root of the present problem is that incomes, and especially wage and salary earnings, have been rising 3 or 4 times faster than any reasonable estimates of productivity growth. It is no use anyone denying that continuous full employment has placed trade unions in a very powerful position which they are exploiting to the utmost. They use the strike as the sword and full employment as the shield. But the unions are not the only offenders. If the community can restrain its income demands the Government would be able to adopt a more expansionary economic policy than it could now prudently adopt. Cost inflation is less easy to deal with than demand inflation, but it is no less insidious and harmful.
In view of the serious threat posed by inflation, it is quite hypocritical of the
Australian Labor Party to put forward a censure motion when its own policies are calculated to accentuate the problem of inflation. There is little doubt that excessive wage increases have been the main factor responsible for the recent acceleration in inflation in Australia. I submit that the evidence is clear cut. In 1969-70, the year which saw the start of the acceleration in inflation, the rate of increase in unit labour costs was 5 per cent while that for unit profits was below 4 per cent. The figures for the year 1970-71 show the divergence at its most dramatic. The rate of increase of unit labour costs in that year was 10 per cent while unit private profits showed a 3.3 per cent decrease. Clearly wage costs have played a pivotal role in the acceleration of inflation over the last 2 years. Yet what does the Australian Labor Party propose to do about wage inflation? It is interesting for a few moments to analyse the effects of the industrial relations policy put down by the Australian Labor Party federal conference in Launceston earlier this year, because ils implementation over a reasonably short time space would be disastrous for the Australian economy. There are, for example, proposals for the support of a union application .for a 35-hour working week, the introduction of so-called equal pay and the extension of long service leave to casual workers. The whole emphasis of the proposals is on what can be taken from the economy rather than on how the economy can be further strengthened.
The introduction of a 35-hour week would cost at least $ 1,600m and the cost could be as high as $3 ,400m per annum. The Commonwealth Conciliation and Arbitration Commission has already introduced equal pay for men and women doing the same or substantially the same work. If it is proposed that all female workers who are not doing the same or similar work to males should be given a substantial wage increase, the cost, of course, could be considerable. On the basis of the Australian Council of Trade Unions claim, which was a claim for approximately $8.40 increase in female wage rates, the cost could be in the vicinity of $500m per annum. The cost of the long service leave proposal would bc approximately $150m per annum. Thus the cost of these 3 proposals alone could be as high as $4,000m per annum, which would add about 20 per cent to the national wages bill. Is this a policy of responsibility which has been put forward by the Opposition or is it a policy which would seek to feed inflation - our major economic area of challenge - rather than seek to inhibit it?
A most serious effect of the proposals is that now that they have been put forward by the Opposition, they could give rise to an even greater degree of industrial unrest in attempts to coerce employers to accede to demands which the Opposition has indicated it would support. Such unrest would seriously affect labour productivity and would thereby compound the economic consequences of the proposals in the long term. And what will the Australian Labor Party do about industrial unrest in this country? Apparently, the answer is a $20,000 campaign which has failed lamentably to indicate the Party’s pOliCy on this issue. We know that the Labor Party has committed itself to a policy of no action and no penalty against strikes conducted against the awards of the Commonwealth Conciliation and Arbitration Commission. In this way, it would effectively relegate the Commission’s position and erode its power. There would be an impunity against strikes and against awards of the Commission. Of course, our own policy in this matter will be made clear very shortly.
A comparison is sometimes made between the loss of man days through strikes and the loss through unemployment. This is a point that has recently been made by the Leader of the Opposition. This is a false comparison. The effects of industrial disputes on the community are not simply measurable on the basis of the loss of man days. This only represents the tip of the iceberg. The much greater danger to the economy is from the wage induced inflation associated with industrial unrest. This is posing a long term threat to economic growth, the balance of payments and full employment. The attitude of the Government on the question of employment can be summed up quite simply. Firstly, we have every intention of maintaining full, but not overfull, employment. Unemployment is wasteful, it makes for human suffering, and we are totally opposed to it. Secondly, we have an employment problem in the country areas resulting from the rural recession. The Government has taken measures to sustain incomes and spending in these areas and new measures will be taken if necessary. Thirdly, constant crIsis.mongering of the type we have heard this afternoon is having an adverse effect on business confidence and spending generally. Fourthly, we appreciate the need for alertness in economic management and a flexible economic policy. Finally, an easing in wage push forces - indeed in all income demands - is essential to the long term health and stability of the economy. Until this happens the Government’s task of maintaining a proper balance between growth and inflation will remain a very difficult one.
This is not to say that the Government is relying solely on community self-restraint for the success of its economic policies. It is also actively promoting an economic and institutional climate conducive to incomes and price restraint. This is being done in 4 ways: By preventing the emergence of over-exuberant demand conditions; by stimulating competitive forces within the economy; by Commonwealth interventions in all major wage cases before the Commission: and by making a comprehensive review of the Conciliation and Arbitration Act. So successful has this Government been in its economic management during its term of government, so high are the standards which it has set during these years, that there are people in the business community who view even the slightest signs of a slow down with a measure of disquiet. Naturally, it is highlighted by the Press. That leads to the type of motion moved by the Opposition this afternoon, in which it takes the greatest care to quote the most dismal prognostications. It is thus that the pot of pessimism is kept on the boil. This is dangerous because of the important role which confidence plays in investment and with consumption decisions.
To the innocent bystander, the whole process must appear perverse. Here is the Labor Party - the self-proclaimed champion of the workers - tending by its own statements and actions to undermine confidence and thus in that sense promote unemployment, whether consciously or not. To assert that the Government has a policy of creating unemployment is to fly in the face of our full employment performance - one of the best in the world. A Government that can maintain such a performance is a government which is entitled to the full confidence of the Australian community.
– 1 ask the Minister for Labour and National Service (Mr Lynch) who has just resumed his seat whom he thinks he is kidding. I repeat the question: ‘Whom does he think he is kidding?’ I have just returned from my electorate where I obtained the latest statistics and the latest reports from the trade union movement and the men themselves on the true position in the City of Greater Wollongong. It has been said correctly that when the United States economy sneezes the rest of the world catches pneumonia. The Broken Hill Pty Co. Ltd, whatever its faults in terms of employment may be, exercises an equal role in the Australian economy. It is not only sneezing but it is coughing today.
If the Minister for Labour and National Service were to come with me and meet the Federated Ironworkers Association of Australia, the Amalgamated Engineering Union, the Boilermakers and Blacksmiths Society of Australia and the rest of the major trade unions in the area; if he were to come along and see the management of Australian Iron and Steel Pty Ltd, the management of Mount Keira colliery, and the management of Scarborough colliery; if he were to see the tally clerks at Port Kembla and the 16,000 tons of Japanese steel that is being landed there; if he were to come along to John Lysaght (Aust) Ltd and M. M. Pty Ltd, the copper wire and tube mill people, and ask them how many men they propose to retrench; if he were to make similar inquiries at Stewarts and Lloyds (Aust) Pty Ltd, at David Brothers Pty Ltd, at B. & W. Steel Pty Ltd, at Garnock Engineering Co. Pty Ltd and every other major employer in the district, he would throw his statistics away. They are worthless: they are nothing more than a monthly aberration of the true position with regard to unemployment in Australia today.
At the moment a deputation of the New South Wales coal owners is overseas trying not only to get a better price for their products but to make sure that delivery of contracted supplies will be accepted. In addition the Minister should go to other collieries such as Coalcliff Colliery and see how many men will be retrenched there because of the curtailment of the steel companies’ purchases of coal. That is the position. As for the Minister for Labour and National Service claiming any credit for employment, he will be the villain of the piece. Before this Parliament rises he will be giving notice to the House of proposals for the alteration of the Commonwealth Conciliation and Arbitration Act designed deliberately to exacerbate industrial turmoil in Australia, because this Government has a vested interest in industrial turmoil to save its own miserable hide.
The Prime Minister (Mr McMahon) went abroad on his celebrated pilgrimage to see whether he could dig up a suitable election issue. He could not, and back he came. The instruction has gone to his minions to give the screws a turn and have a good old head-on confrontation. Fortunately, the wiser, cooler and saner heads -amongst the employers see the general world trend. They know that trade is on the decline everywhere and they do not want the position in Australia intensified. What the Government proposes to do to save its own miserable hide will create permanent damage to Australia and will lose trade that can never be regained in this period of acute and intense world trading competition. I am glad to see that the Minister for Trade and Industry (Mr Anthony) is at the table, because he needs to learn a few of the facts of industrial life. Let me remind the House that in the last 2 years $233m worth of iron and steel products have been imported into Australia. In the year 1969-70 we had a favourable trading balance of $40m. Last year we had an adverse trading balance of $4.1 m in respect of iron and steel.
Let me take the particular case of black sheet steel, which is the key product for the motor body industry and for all sorts of consumer durables such as refrigerators and washing machines. In 1969-70 $12m of our surplus was exported but last year we had an adverse balance, because of steel coming in from Japan, to the tune of 51 5m. What is the Government’s answer to this situation? I have here today’s ‘Daily Mercury’ from Wollongong which says:
Government action is demanded. The union moves to save men’s jobs. The Federated Ironworkers Association has called on the Federal Government to stop all imports of steel.
There is justification for that. Quotas are needed for this purpose because today there is acute over-production of steel in the world. The Japanese miracle is crumbling and the Japanese economy is a brittle one. Further, thanks to the United States 10 per cent surcharge. Japan, which looked upon the west coast of the United States as a major source of consumption for its exports, now finds that the shutters are going up and an acute and vicious war has commenced. What does this Government plan to do about it? The Japanese have a lot up their sleeves and they can afford to cut prices. The Broken Hill Pty Co. Ltd in its celebrated recent increase of 8 per cent in steel costs gave the opportunity which they needed to come right in under their guard.
Over many years and more particularly over recent months I have had numerous complaints from constituents about the unavailability of particular steel types. The company is definitely at fault in respect of its phasing of production. This is the responsibility of the Government. The Government can throw all its sacred principles of free trade to the wind. Today every country is going lickety-split for its own survival. It is the fundamental responsibility of any government - whether it is Liberal, Labor or of any other political persuasion - to safeguard the industry and to safeguard the jobs of the men in it.
We live in an age of steel and I represent a city of steel. I speak for those men and I am here to fight for them and for their rights. Let the Government take heed of what I say, be warned and act accordingly. Yesterday 16,000 tons of Japanese steel were being unloaded at Port Kembla. If we relate the $233m worth of imports of iron and steel products into Australia to the value of ingot steel production, we find it is equivalent to about 31 million tons or about 6 months’ employment lost to the Australian workers, thanks to the stupidity and the crass ignorance of this Government and those who are responsible for safeguarding our trading position. Let the
Minister get up and give his answer to this. He would not even know a steelworks if he saw one.
– Only if it fell on him.
– I doubt whether he would then. With regard to industrial turmoil, let me quote some of the criticism which has been made by traditional supporters of this Government. Let us take for a start Mr McPhee, the President of the Victorian Chamber of Manufactures. He said:
I warn the Federal Government against working up to a law and order election. The Metal Trades Employers Association has already served notice on the rest of the employers that it is no longer willing to fight the trade unions on behalf of the Federal Government and other employers to the last dollar. Let the Minister for Trade and Industry take heed of what was said by the former Prime Minister, the right honourable member for Higgins (Mr Gorton), in Brisbane last Friday. He said that it was time that the Federal Government took over price control from the States. It is also time that the Federal Government took the trade union movement into its confidence and into its counsels and sat down with them and the employers to discuss the situation. Australians can be led; they cannot be driven. If this Government wants industrial peace there is a right way to get it. It cannot be achieved by bashing, blackguarding and dragooning the trade union movement, the people who bend their backs in sweat so that this country can survive, develop and expand. Shame on the Government for its tactics and its objectives.
There is today in Australia one commodity and one commodity only under universal price control, and that is labour. Let the lies of the Government be nailed once and for all. If honourable members want to nail them, let them look at the September issue of the ‘Australian Economic Quarterly’ and they will see there that over the last IS years, as a percentage of the gross national product, the cost of wages has varied only between 61 per cent and 63 per cent, and as a corrective factor to that there has been an increase in employment from 89 per cent to 91 per cent. So the impact of wages on prices is literally nil. The hard truth - any working man will tell you this - is that wages are chasing prices. They are losing in the race, are further behind than ever and will never catch up. If the Government wants the answer to the problems of the present system of conciliation and arbitration I refer it to Mr Polites, the leader of the employers of Australia. He said that the Commonwealth Conciliation and Arbitration Act ought to be torn up and another one put in its place.
Is this Government prepared to do anything constructive? We heard from the Prime Minister (Mr McMahon) before he went overseas that we had nothing to fear but fear itself. I would say, from the fruits of his journey overseas, that Australia has nothing to fear but McMahon himself and his Government. Today it is the Government’s policy - a deliberate one - to have unemployment. It seeks to use unemployment as a club to condition and to belt down the working man. The Government intends at all costs to ensure its own electoral survival, but in the process of so doing it will wreak irrevocable and irreparable harm to the Australian economy. There is no alternative in Australia to full employment. We are capable of providing it, but it was obvious in the Budget that the Government’s planning, strangely was, for a 2i per cent surcharge on income tax which obviously would offset the 2i per cent unemployment that it proposed to create. But this is like the sorcerer’s apprentice - once he starts pulling the rabbits out of the hat he does not know how to stop them. Unemployment will not stop at 2i per cent. Worse than that - this applies particularly in the metal trades - wages for the unskilled worker are paltry, and unless and until unskilled workers can work more than a 40-hour week it is impossible for them to survive. The full award wage for an unskilled worker in the steel industry today is a national scandal, and that in itself has been productive of more industrial stoppages than anything else than even this Government could do if it implemented its plans for disruption to the fullest.
In the time that is left to me I want to refer to a couple of other matters. One of these is of the utmost importance with regard to the general state of the Australian economy. For many years we have had an adverse balance of trade on current account, and the Government’s strategy last year was to take out of circulation in the domestic surplus some $630m. Strangely, when we attempt to examine the inflow of hot money which is coming into Australia in remarkable quantities, we see a corresponding offset. In other words, the Government, taking that money out of circulation, was then confronted by employers and developers who decided: ‘Very good, if we cannot get the money within Australia we will go abroad and get it’. Borrowed money today is the worst form of investment for Australia because it has to be paid for in hard earned exports at a time of economic crisis in world trade. I am not a calamity howler but I say that we are heading for an economic crisis. The last man who ought to be tittering is the Minister for Trade and Industry. Let him go and examine his own political and economic conscience and decide what he is doing for the benefit of the small man in rural industry.
– Not just the small man. the lot of them.
– Yes. The Government’s Budget strategy is wholly discredited. Honourable members need not accept my word for it; they can look at the recent quarterly published jointly by the Bank of New South Wales and the Associated Chambers of Manufactures of Australia and see what those bodies have said. Are they telling lies? Look at the quarterly review of the Australia and New Zealand Banking Group Ltd and their prognostications, particularly their forecasts of further employment. This Government is like a punch drunk fighter - clinching, playing for time and hoping that it can survive the vicissitudes of the next fortnight in this Parliament so that during the Christmas period at least it will get some surcease and possible relief, hoping to God that something will turn up to save Government supporters and their own miserable political hides. Planning is a dirty word to this Government. The last thing that this Government is capable of doing is plan for the future development of Australia. Its policy has been a simple one - if it moves, shoot it; if it grows, cut it down; if it is in the soil, dig it up and export it and, for preference, do not attempt in any way to process it. Where do we go with a government of this type, a government composed of economic nincompoops - that is all that they can be called? What has been the Government’s policy year by year? lt has been to sell Australia out piece by piece.
We hear Government supporters prate about overseas investment. In actual fact the total amount of overseas investment in Australia varies between 14 per cent and 16 per cent. Despite that, overseas investors have a leverage on our economy and control 40 per cent of it. This is due to 2 things. One is their managerial expertise and the other is their superior technology. For the future - I say this in respect of Australia and as an Australian - we need to stand on our own feet and to think in terms of Australia’s own interests. For the future we are bound by ties of language, culture and tradition to Britain but we need to think for ourselves, and in no regard do we need to exercise more thought and to work for ourselves than we do in the steel and iron industries. Today a lot of our economic problems are due to the fact that we have been buying big ticket defence items which are by no means relevant to the true defence of Australia. The precept and example that we need to follow is that of Sweden, which is capable of making almost the whole of its defence needs whether they be for the army, the navy or the air force. Australians can do it too. Let the Government remember also that it was in 1941 that wa faced the moment of truth in matters relating to our defence in that we could not rely on our former friends and protectors. Today, 30 years later, we come to another moment of truth, and it is that we will need to think very clearly for ourselves in respect of our trade, our economy and our development as a nation. There is a need for another Curtin to speak in terms of Australia and what it needs, to speak of Australia’s growing national consciousness, its sense of national identity and its national objectives. The sooner that this Government is tipped unceremoniously and ignominiously out of office, the better for Australia and the better chance there will be of retrieving a desperate economic position.
– We have just heard the honourable member for Cunningham (Mr Connor). He made the classic remark that he was not a calamity howler. I would hate to hear him when he is making a miserable speech because that was one of the most snivelling speeches I have heard in this House. In fact, 1 do not think it would be possible for him to see the bright side of anything, even on the best of occasions.
One of the most interesting things about this debate is the revelation of the Australian Labor Party’s new interest in economic affairs. It is just over 2 weeks since the Labor Party’s high-powered $20,000 midterm election campaign ended. No doubt most honourable members have forgotten about it. Therefore, I think I should remind honourable members of the subjects covered in that campaign. They were industrial affairs - 1 am sure the Labor Party has not forgotten about that one; defence; immigration - the honourable member lor Grayndler (Mr Daly) would not have forgotten that one; cities and decentralisation; education; and health. But not a word was spoken about primary industry. It is most notable that not one Opposition speaker has this afternoon gone into details of the economic problems of the rural sector of the community. They have practically ignored the subject. But is it any wonder? What could they say? Which Labor viewpoint could they give? lt is most significant to note that there was no reference in that campaign to the management of the national economy.
Apparently there has been such a tremendous change in the last 2 weeks as to warrant the serious action which the Opposition has taken against the Government today. The Opposition has charged the Government with the mismanagement of the economy. I think it is most important to understand what we are talking about in this debate. We are not talking about an economy that is in bad shape. We are not talking about an economy in which there is little growth. We are not talking about an economy in which unemployment is rife. Wc are not talking about an economy marked by balance of payments problems. We are talking about an economy which is, and which is recognised around the world as being, of great strength. We all know that the maintenance of a fine balance in national economies has proved to be extremely difficult in the advanced nations. No country in the world has found it easy to control inflationary pressures. Despite this basic difficulty, Australia and this Government have had an outstanding economic record for many years.
No-one denies that there have been developments this year which have given us cause for concern. The rate of price increase, which is largely due to wage rises, is higher than we would like. There has been an increase in unemployment. Conditions in the rural sector, as a result of reasons largely beyond our control, are a cause for serious concern. But I do not believe that anyone will deny that the Australian economy is basically a sound one - one of the soundest in the world. For many years employment has been maintained at extremely high levels by world standards; in fact; at a level considered to be full employment by any developed country. In the 10 years to 1970 the rate of growth of consumer prices averaged only 2.5 per cent a year, which is a better record than that of almost all other advanced countries. Our overseas reserves are at a record level.
The Government has shown that it is quick to act when it believes that action is necessary. In February we reduced planned Government expenditure. We curtailed the growth of the Public Service and suspended the special .investment allowance for manufacturing industry. We have continued our restraining monetary policy. With our fiscal policy this year we have budgeted for a surplus to forestall what appeared to be a threatening boom in demand, which would add to inflationary pressures. At the same time, in response to the difficulties of the rural sector, we have found a record $560m for direct and indirect assistance to that sector.
I come back again to the inescapable and undeniable fact that the economy is basically sound. There is an extremely high rate of capital inflow which, although it is attacked by the Opposition as something it would stop completely, is an indication of confidence and faith in the economy by those who look at it from outside. There has been a strong trade surplus so far this year. This has led to an extremely strong balance of payments position, with our overseas reserves standing at a record level of $2,626m. The latest national accounts figures are reassuring. For example, the gross national product rose 3.5 per cent in the September quarter over the June quarter. Non-farm output rose 4 per cent in the same period, showing a good recovery from the subdued 1 per cent increase in the June quarter. Nothing I have said, however, evades the fact that there are areas of the domestic economy at which we must look very carefully to determine whether existing policies are adequate. The upward pressure on wages continues. There is also the claim which is to be heard early next year for a $12.50 a week increase in the national wage. The rate of growth of prices is still too high. That is causing serious concern, particularly in a rural sector dependent on overseas markets and returns beyond the farmers’ control. The manufacturing sector is finding it increasingly difficult to cope with the upward pressure on costs. 1 believe we need to look carefully and continuously at the high rate of capital inflow and its effect on the economy. We need to understand the implications of the level of unemployment in the rural areas, which could well have very serious social effects. In the search for a means of providing greater stability in the rural areas, I believe wc must attach far greater importance to the policies of decentralisation. In decentralisation we can look forward to a soundly based and longer term instrument of rural strength and stability. In the manufacturing area, I believe we must be careful that industry is not unnecessarily inhibited in taking advantage of modern equipment and techniques which will allow it to continue improving its productivity. I believe that we must when we are looking at the problems of primary producers give consideration to their special needs, particularly in relation to the period of repayment of finance. Those are some of the important matters which the Government must, and does, continually keep under scrutiny. lt is very easy to create an atmosphere of emotion about the economy, particularly when people are prepared to inject a feeling of panic into the employment situation. Any degree of unemployment is a serious matter for the unemployed and, of course, it must be very seriously regarded by any government. But, although a government must be concerned about the feelings and positions of people as individuals, it must be also very concerned about the overall management of the national economy. It must do everything in its power to maintain the very fine balance I spoke about earlier, lt must not be panicked by a highly charged emotional debate into measures which could jeopardise the economy’s fundamental strength. lt must accept criticism on particular and limited aspects of the economic situation. And it will accept this criticism if it knows that its management is producing overall a sound economic situation. The Government will continue to act on the domestic front as economic conditions demand. But it will avoid action which would produce violent swings in the economy. In fact, precipitate action could create even bigger problems for exporters, lt is important that ail sectors of the Australian community recognise the need for restraint and cooperation if the existing basic soundness of the economy is not to be undermined.
On the international scene, Mr Deputy Speaker, it is true that there have been some worrying developments in trade. These are to a large degree outside the control of the Government. First, there are the possible adverse effects on some of our traditional exports following the enlargement of the European Economic Community. Here again, over the past decade the Government has been active and has worked in co-operation with marketing boards and individual traders to reduce substantially our dependence on the British market. The British market now takes only 11 per cent of our exports, compared with 24 per cent 10 years ago. If you were to accept the remarks of the honourable member for Lalor (Dr J. F. Cairns) this afternoon you would believe that nothing had been done. This diversification effort will be pursued, and over the coming months and years there will be continuing discussions on a commodity by commodity basis with Britain, and with the EEC itself, on the means to achieve minimum disruption of our existing trade.
Second, there is the continuing currency crisis. Fortunately the major trading nations have not retaliated against the United States for its corrective measures taken in August. At the General Agreement on Tariffs and Trade meeting in Geneva last week, I gained a strong impression that their apprehension about the currency situation will ensure that good sense will prevail among the nations and sensible policies will emerge. We all hope that the current meeting in Rome of the Group of Ten will see a clear advance towards a satisfactory outcome of the present crisis. At the GATT meeting there was also clear evidence of a greater willingness to tackle the problems of international trade in agricultural commodities.
The proposal which I put forward on behalf of Australia for the establishment of an expert group to seek means of agricultural trade liberalisation was very well received, and attracted strong support. It was opposed only by the EEC, Britain and Ireland. This opposition prevented GATT accepting the proposal on this occasion. However, our proposal is still very much an issue and the Council of GATT will keep it under close examination. Australia will certainly continue to seek this objective. The meeting agreed that every opportunity of making progress towards trade liberalistion should be pursued, in both the industrial and the agricultural areas. The contracting parties to GATT also agreed that it was their intention to pursue in GATT a new, major initiative for dealing with longer-term trade problems as soon as this was feasible.
Mr Deputy Speaker, returning to the domestic scene, it is true that the outlook for wool at the moment is extremely serious. But the Government has acted quickly and positively. It provided urgent relief to the industry and to the country communities depending on wool by underwriting the average return at 36c per lb, and has acted in a number of other ways. It is very encouraging to see the industry grappling with its problems and I can assure the industry that we are ready and anxious to work with it in the search for solutions to its difficulties.
In any consideration of the difficulties of the rural sector of the economy, we should not let the wool situation blind us to the strength of other commodities. We have just seen a record sales effort by the Australian Wheat Board. The sugar industry is in a sound position, with good prices and a record harvest this year. There is a strong world demand for beef, and export sales for both beef and mutton are at very high levels. There are promising new markets for coarse grains, especially sorghum and barley. There is a secure domestic market at payable prices for tobacco. Prices for major dairy products are at record high levels. We are all well aware of the enormous progress and prospects of minerals and metals, exports of which have increased 7 times in the last 10 years.
Mr Deputy Speaker, it is completely wrong to suggest that the Australian economy is not sound and strong. If this is the claim of the Opposition in this debate, it is doing a disservice to this House and to this nation. Nothing can be more disruptive of economic confidence than the sort of doubt fostered by this motion. I believe the Australian people will base their judgment not on fear, but on fact. I believe they will look to the Government to react and respond according to economic circumstances, and not according to the kind of doubt which this motion seeks to create.
No one denies that there are limited areas in which the high gloss on our economy may need a little polishing to restore the sheen we are used to seeing. The Government is aware of this. It has acted and will act as necessary to keep the economy at the pitch that has been maintained for so many years under this Government - one of the strongest and soundest economies in the whole world.
– One of the most remarkable statements just made by the Minister for Trade and Industry(Mr Anthony) was that the Government has shown that it is quick to act when action is considered necessary. Can you imagine a more incredible statement? Every wool grower in Australia is condemning this Government for its lack of action with respect to marketing. Seven years ago the predecessor of the Minister for Trade and Industry, the then Deputy Prime Minister, now Sir John McEwen, knew full well - as he has subsequently let slip - that the writing was on the wall for some major portions of the wool industry. He knew, as he has frequently admitted, that the best proposal then was for a stabilisation and reserve price scheme for wool. Now, 7 years later, the Government has finally woken up to the fact that it has to have a drastic reform in wool marketing, a drastic reform in respect of acquisition of wool and a reserve price scheme for wool. In that 7 years we have seen the wool industry depressed, on its knees. The Minister for Trade and Industry has the audacity to tell this House that this Government has a remarkable record for quick action. What happened with regard to wheat? The Government waited until there was a crisis in the wheat industry and then it acted to bring in a quota system. The wheat industry in some parts of Australia is still in a shambles because of the quota system.
– You are not against it, are you?
Or PATTERSON- No. I am not against it and the Minister knows this. The wheat industry is in a shambles in some areas because of the inequitable quota system, as the Minister well knows. Then, of course, we had the most remarkable statement of all on decentralisation. If there is any Party today that is opposed to decentralisation it is the Australian Country Party. Have we ever heard of the Minister for Trade and Industry saying in his own electorate that there should be industry in Richmond? Can anyone imagine what would happen if we had a steel mill in the electorate of the Minister? He would not be here after the next election. That is exactly what, would happen. I repeat that if there is one Party that is opposed to decentralisation it is the Country Party. It prides itself in the action it has taken. Where is the action of decentralisation? Where are the reports on decentralisation? Do we ever hear a member of the Country Party advocating industrial growth in a Country Party electorate? Of course we do not; not one of them would advocate that. I can give honourable members a classic example in my own electorate which concerns the coal mine at Goonyella. What did the Country Party Stale member of Parliament do in that instance? Within a matter of weeks of the finalisation of the mine enterprise he got the shire boundaries changed so that eventually his electorate will be changed. This is what members of the Country Party do.
– Tell us about the electorate of Kennedy.
– If there is one depressed electorate in Australia, it is the electorate of Kennedy. 1 was in the electorate of Kennedy only last week. I met a girl there who had just finished sitting for her senior examination. She could not get a job in Longreach. She could not get a job even in a cafe. That is how the Country Party’s policy affects the electorate of Kennedy. Let us look at the Government. This Government has been in power for 22 years, lt is well to remember the famous oration delivered by the then Mr Robert Menzies He said: ‘We will put value back in the pound’. Look at what has happened after this Government has been in power for 22 years. This Government’s economic policies have failed, and that is what this motion is about today. Will honourable members opposite deny that there is a lack of confidence throughout the Australian economy? A lack of confidence in this Government’s policies is sweeping the Australian economy. Unemployment is spreading and growing at an alarming rate. We had the colossal ignorance of the Minister for Labour and National Service (Mr Lynch) who told us that this year school leavers will not have very much trouble in getting jobs. Let them go into Country Party electorates and try to get jobs. Let them go into the electorate of Kennedy, to which the Minister for Trade and Industry has referred, and try to get jobs. Let them go into any wool growing electorate and try to set jobs. What will they have to do? The poor kids in country areas will have to leave the country and come to the cities and try to get jobs, and by doing so they drag their families with them. Yet the Country Party talks about decentralisation.
After listening to the Deputy Prime Minister one would think that there is no such thing as a rural crisis in Australia. Yet every speech that has been made by members of the Country Party in recent months has been based on calamity howling about the rural crisis. Now we hear from the Leader of the Country Party that there is no rural crisis. Let him tell that to the Australian wool growers. In the wool growing areas throughout Australia there is mounting misery, mounting bankruptcy and mounting numbers of people walking off their properties; and going to the cities. But the Country Party says that there is no rural crisis in Australia. Of course there is a rur.il crisis, and every member of this Parliament knows that there are very serious problems in the wool growing areas of Australia. The Deputy Prime Minister glossed over the fact that a tremendous amount of foreign capital is coming into Australia. He said that this is a good thing. Yet not one attempt has been made to explain what this tremendous increase in foreign capital in the last 12 months is doing. The Treasurer (Mr Snedden) made an attempt to explain it, but he made no attempt to tell us about the S700m which he said is coming to Australia by way of loans. For what are these loans being used? Can the money go out of Australia just t as fast as it has come in? This is what we want to find out.
Not one word has been said about the pensioners of this country. The Government talks glibly about inflation, but not one Government speaker has referred to th’ Australian pensioners or to the low income earners, of whom large numbers are living in desperate poverty today. Do honourable members opposite deny that? They are so out of touch with the rank and file people in Australia that they do nor really know how pensioners live. Honourable members opposite talk about planning, but this Liberal-Country Party Government has rejected every constructive report that has been aimed at achieving an efficient allocation of resources. The Government ridiculed the report of the Vernon Committee of Economic inquiry. If the Government reads that report now it will find that a lot of the conclusions reached by that Committee are very true. Then there was the Loder report on transport costs in Australia. The Government tried to withhold that report for years, and then it condemned the report when it was released. This is the record of this Government which has been in power for 22 years.
We saw the disgraceful performance only in recent months of a member of the Country Party hawking land in northern Australia on foreign stock exchanges. What did this Government do about it? Nothing. This Government’s record is a record of a nation in an economic mess; a nation without any real semblance of an economic plan. This Government has stop-go policies which, at the very most, cannot be explained. These policies just have not been explained to us, and as long as they are not explained to us this .nation will go further into an economic mess. It is a sorry, miserable mess, and certainly there is need for greater action. As the Minister for Trade and Industry has suggested, we should have a government which will take action when action is necessary. Surely there is a need for action now.
The burning question is the state of the economy and the widespread lack of confidence in the Australian economy by the Australian people. Will this Government deny that there has been a crash on the stock market in the last 6 months? Surely that is one of the best indicators of lack of confidence throughout Australia. Before the Prime Minister (Mr McMahon) entered the chamber I had reminded the House of the famous words of the then Mr Menzies. He said: ‘We will put value back into the pound’. The official indices of the Bureau of Agricultural Economics show that since this Government came into power in 1949 the index of prices paid by primary producers of Australia for materials, etc, has increased by 177 per cent. In the last 12 months the consumer price index has increased by 6.5 per cent, and there is continual erosion of the purchasing power of our money.
The Government talks glibly about unemployment. It says that the position is not very serious; that there are only 63,000 people unemployed in Australia. This is not serious to the Government, but it is serious to the people who have the misfortune to be unemployed and to their families. It is serious to those people who only this week have received dismissal or retrenchment notices from the great manufacturing and mining enterprises of this nation. But the Government does not think anything of this. What are the Government’s estimates with respect to the number of people who will be unemployed by next February? We have not heard one word from the Treasurer about those estimates. There are all sorts of estimates, varying from 120,000 to 180,000, as to the number of people who will be unemployed by the end of February next year.
We heard the remarkable statement by the Minister for Labour and National Service that school leavers will have practically no trouble in getting jobs. I have already referred to that matter. The Minister for
Trade and Industry challenged me about the employment position in the electorate of Kennedy, and I gave an example which concerned the electorate of Kennedy. If the honourable member for Kennedy (Mr Katter) were to say that everything is rosy in the electorate of Kennedy, nobody in the electorate of Kennedy would believe him. The question concerning school leavers is something which this Government has to take into account very seriously. The nation as well as the families directly concerned, has spent very large sums of money on educating those children. There is nothing more humiliating and degrading to a young nation like Australia than to find that when a boy or girl leaves school after receiving a formal education, say, to matriculation standard, that boy or girl cannot get a job. There is nothing more humiliating and degrading to one who has spent years of his or her life in obtaining a university degree than to find that he or she cannot get a job. Ask a lot of the geologists who are leaving our universities where they will get employment. Ask a lot of the students leaving school after having passed their senior examination where they will get jobs. Do not try to tell me that they will get jobs in rural areas because they will not be able to do so.
Official figures indicate that 40 per cent of the people unemployed in Australia are in rural areas. Another 35 per cent is in the provincial cities as a direct result of problems in the rural areas, making a total of 75 per cent. A significant portion of those people who are out of work in the metropolitan areas is directly due to problems of unemployment and to lack of demand in the country areas. There is a lack of confidence in this nation and confidence must be stimulated. The people’s confidence in the economy must be stimulated.
The Treasurer referred to a growth of income and he used this growth of income or the growth rate to justify the state of the economy. But the latest figures contained in the Treasury Bulletin show that a significant portion of the growth of income is due to a high rate of savings and not to increased spending. Another indicator is the increase in liquidity in the banking sector. Figures show that there has been an increase in savings bank deposits. This again indicates a lack of confidence in the economy, because the rate of spending has decreased. Honourable members may be interested in indicators. If one examines the proportion of consumption over gross national product, one will find a considerable decline in the last 12 months. A better indicator of the significant drop in the rate of consumption is found by relating consumption to the personal disposable income. Surely, all these indicators show a significant lack of confidence in the economy. The increase in the liquidity in the banking sector is shown by the increase in savings, the increase in primary liquidity and the non-official holdings of the longterm Government securities assets, which is now over $300m greater than for the same period 12 months ago. In other words, all this shows that the people of Australia have lost faith and confidence in this Government. They are refusing to spend their money. This is a serious matter.
There are other indicators in the economy. There has been a significant drop in the number of houses and flats which have been commenced in the first 6 months of 1971. Motor vehicle production is down; agricultural machinery production particularly is well down; cement production is down; Broken Hill Proprietary Co. Ltd steel production is down; the production of chemicals is going down and the production of fertilisers is going down, yet this is the economy which the Government maintains is on an even keel, is right and is viable. The Treasurer and other speakers from the Government side have made a great play about foreign investment. From listening to those speakers there can be no doubt that they are the champions of foreign capital - the champions of foreign takeovers of Australian assets. I should have thought that they would have heeded the warnings of men like Sir Ian Potter against this mad inflow of foreign capital in the last 12 months. We still can find no real explanation for this inflow and just what it is doing in this country. This is something to which I believe the Government should give the highest priority. The official explanation given by the Treasury is that most of this money is financing companies already in Australia, but we want to know whether this money can depart from Australia just as quickly as it has come in. Is it hot money? What is this money? It is impossible to find out from any official document put out by the Treasury details in relation to the motivation of this money which is coming into Australia. Government supporters speak in terms of our healthy balance of payments but surely the reserves are increasing because of the rush of this foreign money or this hot money into Australia? This is one of the basic reasons why Australia’s international reserves are increasing and this only makes it more important that we be provided with more information about foreign reserves, foreign currency or the source of this money.
The Australian public is fed up with this Government’s lack of action on the economy and its refusal to lay down positive guidelines for foreign investment. An attempt was made by the Prime Minister’s predecessor to lay down guidelines on foreign investment, but it was not precise enough. The Labor Party wants to know in more precise terms the behaviour of foreign investment in Australia. Government supporters have talked about the fact that America was developed with foreign capital, but let us forget what happened in those days and think more of what is happening now. What happened in Canada when that country had problems with foreign capital? lt was forced to take drastic action and we in Australia also may be forced to lake drastic action. This country needs positive leadership, particularly in th» field of primary industry with which I am concerned.
A most remarkable statement was made today by the Minister for Trade and Industry and Leader of the Country Party (Mr Anthony), who talked of the achievements of his Government in the field of primary industry. Never has this nation been worse off in terms of a rural crisis, especially in the wool industry - our greatest industry - since the depression of 1929-30 and yet positive action still has not been taken in the field of marketing. The Government still believes in the auction system. Of course it does. It is tied hand and foot to the private banks, to the hire purchase companies and to the pastoral houses and it dare not give the auction system away, because if this were done, it would immediately and ruthlessly dismiss these middle men who are the friends of the Government and who actually finance the Government. One cannot convince one primary producer in Australia, particularly if he is concerned with wool, that this Government has done a good job in primary industry. For that reason, I wholeheartedly support the motion moved by the honourable member for Melbourne Ports (Mr Crean), condemning this Government for its failure in economic policies
– Order! The honourable member’s time has expired.
– lt must be obvious to those who have listened attentively to this debate that the Government has no case whatsoever to answer. In fact, after I had heard the honourable member for Melbourne Ports (Mr Crean) speak, I wondered whether it was worthwhile continuing the debate but I felt that it was wise to pursue it so that the Government could put its case before the Australian people and indicate to them in clear and unmistakable language what was happening in this country today.
Before I get on to the .substance of this debate, may I relate to the House the history over the last 2 years of inflationary pressures and the Budget approaches in this country. In the last Budget - that is the Budget of 1970-71 - we faced the real problem of demand inflation and we then budgeted for a very substantial internal surplus of something of the order of $550m or thereabouts. Towards the end of the year we faced a different problem, because at that time the Commonwealth Conciliation and Arbitration Commission gave a national wage increase of 6 per cent and, by the time the 1971-72 Budget came around, we had the problem not so much of demand inflation but of wage inflation, with every possibility - even a probability - that excess demand inflation would superimpose itself on the existing cost-wage push that was occurring. So, that was the problem we faced. But we also had 2 other objectives in our Budget. The first of them was to ensure that those in the greatest need should be fairly treated and we gave, I believe, one of the biggest increases in pensions ever given in this country, despite what might be said by the honourable member for Dawson (Dr
Patterson). We also wanted to ensure that economic growth proceeded at a reasonably healthy rate but not in such a way that would add to cost inflation which would consequently double the problems that we had in front of us.
First, I want to touch on this question of inflation and to explain it, because I feel it is my responsibility today to crystallise what has been said by my colleagues who preceded me is this debate. I want to establish what we mean by and what is the impact of cost-wage inflation. May I explain to the House how our problem emerges. In any country, no matter how strong it might be - and that includes Australia - if the growth in average incomes exceeds the rate of growth in productivity, automatically there is built in an increase in costs which amounts to the difference between the 2 figures. The simple fact is that last year we had an increase in productivity of 1 per cent - a deplorably low figure- due to the factors I have mentioned together with industrial disputes and various other causes that I need not mention at the moment.
But what is of vital importance and what must be recognised is that average earnings were increasing at the rate of 13 per cent per annum and, as I have said, these increases were mainly, directly or indirectly, due to the fact that wages as determined by the Commonwealth Conciliation and Arbitration Commission and the wages drift had got out of hand. Consequently we found that we had inbuilt into our economy an increase in costs of the order of 10 per cent or 11 per cent which could only be offset if profits fell - and fortunately they did last year - or if we found some other circumstances which would delay the costs being written into prices and consequently into the cost of living.
I want to complete this story by saying that notwithstanding the fact that I believe we have done reasonably well - I will mention that again in a few moments time - the consumer price index as it directly affects the individual, not costs, is rising at the rate of 6 per cent or 7 per cent per annum. In a country such as ours this is far too high although not as high as is occurring in other countries. What were the consequences of the Budget?
I believe that, surprising though it might seem to members of the Opposition that our Budget policy was sound; but as with other Budgets, if we find that an occasion occurs when we should at the margin make changes because a particular difficulty has emerged, of course we will act. We acted in the case of nursing home attention and we acted recently when an additional S30m was given to be passed on to the Australian Wool Commission.
I want to indicate now what has happened to our economic growth and then to take the Government and the Opposition through what reforms we have made and our attitude to the future. The latest figures of growth as they have emerged show that there has been an increase in production in over 23 different sectors of the economy and a fall in about nine. Does this indicate stagflation or stagnation in the growth of the economy? On the contrary, it indicates growth of a size I will mention. Private investment in plant and equipment is up by 14 per cent - a remarkably big rise - and our exports have taken a rise of the order of 15 per cent. We can go through all the figures if we wish, but for housing, building and construction in the non-housing sector and the building of flats we find not, as the honourable member for Dawson said, a decrease but a substantial increase and one of a healthy kind.
All this can be summed up in the record of our gross national product. Normally we expect a rate of increase in our gross national production of between 5 per cent and 51 per cent. It is true that last year the growth in gross national production fell to 4 per cent, but this year on the probabilities it will be about 5 per cent. We cannot say for the moment whether it will be one side or the other of that figure but with good fortune it will be 5 per cent and probably slightly more.
We have in the economy, growth of a healthy kind, growth of a kind which people would not have believed to be practicable and a growth which has been achieved despite all the problems we have faced in the rural industries, particularly the problems associated with wool. So noone can honestly be critical of what has been done.
If. we like to make comparisons, let me repeat what was said by my colleague, the Treasurer (Mr Snedden), earlier this afternoon. When looking at other countries, he said that the United States had a nil rats of growth, the United Kingdom had a growth rate of probably 2 per cent - not 5 per cent as our own is - that West Germany, which is held up as one of the ideals, had a growth rate of not 5 per cent but a little better than 2 per cent, and that Japan’s growth rate was roughly the same as ours.
Therefore, looking at it in international terms - I like to take pride in our being out in front, as we have been on so many occasions! - I think we can prove to the Australian people and to the world at large that we need not worry about international comparisons; we can take the lead and are able to compete with the rest of the world.
Another point 1 want to mention relates to employment. Already my colleague, the Minister for Labour and National Service (Mr Lynch), has dealt with this subject in full. We have not a large number of unemployed at this stage. They number about 62.300. The crude figures show that about l.i per cent of our total work force of 5,600.000 is unemployed. Even though seasonal unemployment might be a little above the 15-year average, the problem that we face today is that over the Christmas-New Year period we will have of the order of 190,000 school leavers together with people from tertiary education institutions coming into the work force for the fust time. That is the largest number we have ever had, and it is for that reason that we must carefully watch, and we are carefully watching, the employment position, and wi will do what we think is right in the interests of ensuring that they are rapidly employed.
May 1 turn to the next part of what 1 want to say. I believe that we are at a critically important phase. One false step here could induce excess demand inflation of a kind which, if it was superimposed upon cost inflation, would be dangerous and would stultify our long term development. Whatever action we have taken as a government, we have proceeded when we knew where we were going and what we thought we should do in the interests of the economic development. That leads me therefore to the question of what we should do and what have we done. First, if I may deal with a problem that was mentioned by the honourable member for Dawson, there is an enormous potential for greater demand. Let us look at the figures for disposable income. On the last occasion when 1 spoke in the House about the problems of potential demand inflation I said that disposable income had increased by 11 per cent as compared with last year. The figure as it exists today has gone to well over 14 per cent, probably 14.4 per cent. So if this amount of money passed rapidly into purchasing power we would have those 2 problems superimposing themselves one on the other, and frankly we would quickly learn what it meant to innate ourselves out of the international market and to do many other things that were against our long term interests.
The other point I want to mention here is the problem of industrial disputes and what it has done to our economy. The latest figures show that for September over 400,000 working days had been lost through industrial disputes. This of course meant a tremendous loss of purchasing power and was to the disadvantage of the ordinary members of the community. But have we heard one word about industrial disputes from the Opposition or from Mr Hawke, who has a halo around his head at the moment as a man who can stop all strikes? Is he settling all strikes when in September this year, as compared with the same period last year, about 3 times as many working days had been lost through disputes. And I have not heard one word from the Opposition or had one bit of help from honourable members opposite that would stop industrial disputes, particularly industrial disputes of a political kind.
Now 1 come to the last factor that I want to mention before summing up. I want to indicate to the House what we are doing to keep the economy developing at the pace we are developing it and to try to ensure that our goals of development and full employment are attained. We can look at the long term and then at the short term procedures that have been adopted or remedies that have been introduced by the Government. As to the long term, my colleague the Minister for Labour and
National Service will, 1 believe, next week announce to the House changes in the arbitration system and the strengthening of that system. We have already taken action on resale price maintenance. We will strengthen the Restrictive Trade Practices Act. As my colleague, the Minister for Trade and Industry (Mr Anthony) has pointed out, we are trying also to get cheaper production and a greater degree of competition together with a better allocation of resources by ensuring that there is a thorough going review of tariffs by the Tariff Board. This, then, is the long term picture.
As to the short term, what have we done? First, I mentioned in this House not so very long ago that we had already taken action on the fringes of the bond rate. Later, we took fairly decisive action with the Reserve Bank to ensure that the yields on bonds were substantially reduced. We hope that that action will have a pervasive effect on the whole structure of interest rates. Secondly, we took other action in order to ensure that bank lending was increased. To use the words of the Treasurer when he was making his reply to the opening statement of the Opposition in this debate, wc gave the banks approval for some increase in new and increased lending. That is now occurring. So industry will not be able to say that it has not the money to invest and, if necessary, to carry on with increased activities. Thirdly, we took action to ensure that we would reduce the immigration inflow in order to minimise the impact upon employment figures because over the Christmas period approximately 190,000 people will come into the work force from secondary schools and from tertiary education levels. This is what we have done.
May I then come to this conclusion. Who are those who want us to change our policy at a time when our budget policy is being successful and the first signs that there is a reduction in the rate of growth of wage increases are appearing? That is not to say that they are decisive or that increases will not take place during the course of the next few months; they will. I can give the assurance on behalf of the Government that we will pursue our objectives when we know we are right. We will not be cowed by those who want to get money the easy way, by those who know that under inflationary demand conditions you can easily get your order books full and you can pass on the cost to the unfortunate consumer. We are right and we will go on with our budget and general strategy.
Consequently, 1 wish to put this proposition to my own colleagues on this side of the House: There are solid reasons for confidence in our future. These are the reasons: We have a very favourable balance of trade. It is building up substantially. I can remember that in the days when I was Treasurer people kept on saying: ‘You will never be able to get close to a balance of payments on current accounts’. Yet we are working steadily towards it. We have a favourable balance in our balance of payments and we have substantial reserves overseas. We have a growth rate of the order of 5 per cent. Our population is now 13 million. We can be classified as one of the medium nations of the world. We have a people of great vigour, vitality and imagination. Added to this our industrial base, whether it be in secondary industries, primary industries, tertiary industries or extracting industries, is sounder than we have ever known before in our history.
It is the objective of the Opposition to try to destroy confidence if it can. But we are certain that we can keep the present degree of confidence and even improve on it. If we remove this psychological impediment of some lack of confidence, Mr Speaker, believe you me, we look forward to the year that is in front of us as one of continued development and continued prosperity in our nation, a nation in which we as the members of this side of the House - whether Liberal Party or the Country Party - have great pride.
– Mr Speaker, at the end of the previous sessional period, last May, there was a motion of want of confidence in the Prime Minister (Mr McMahon). His colleagues prudently and physically restrained him from speaking. On this occasion, it was impossible in political terms for the Prime Minister not to speak. But his colleagues prudently have seen that the proceedings of the House are not being broadcast. We, therefore, are in the privileged position of-
Government Members - Oh!
-Order! There have been far too many interjections from my right. I suggest that the House comes to order.
– Accordingly, we are among those Australians privileged to hear and watch the Prime Minister at his most pedestrian and pedagogic. If he was really going to trace the history of inflation in Austrafia he should not have gone back just to the 1970 Budget; he should have gone back to the 1969 Budget, his last Budget, because the core of Australia’s inflation today stems from the measures which for short range political purposes he accepted or promoted in his last Budget.
We were chided by the previous Government speaker, the Deputy Prime Minister and Leader of the Country Party (Mr Anthony) for saying nothing about rural matters. Yet the Prime Minister did not. Security in the Cabinet is at a minimum. Everybody saw in today’s papers that there was to be an announcement of emergency grants to local government bodies in rural areas to promote employment. We thought, when the Treasurer (Mr Snedden) did not mention this, when the Minister for Labour and National Service (Mr Lynch) did not mention this, when the Minister for Trade and Industry did not mention this, that the Prime Minister was keeping these goodies for the last. lt is 24 hours since my colleague the honourable member for Melbourne Ports (Mr Crean) gave notice of his intention to move a want of confidence motion in the Government. It is 2 hours since the Prime Minister heard the honourable member for Melbourne Ports and then closeted himself with the Treasury officials who withdrew from the chamber with him; they had been up half the night trying to find arguments for him to use. In that time this proposal has been dropped.
Let me, therefore, come immediately to a continuing difficulty in Australia, one on a regional basis and one which is a regionally based difficulty, a more deep seated difficulty, and one which, I fear, will be longer enduring that any other trouble in the country - the position of our rural industries. It is not just a matter of unemployment; it is a question of depopulation. If the Government were to give votes to 18-year-olds, 19-year-olds and 20- year-olds, there is no question how those who are still in the country would vote because they are the people who cannot get jobs and who therefore go to the cities. They are the principal victims. One of the heartrending things when one goes to any provincial city or to any medium-sized town, let alone the deserted villages, is the fact that the young people are leaving. The population in these areas between the late teens and late thirties is drastically dropping. The Prime Minister did noi mention this aspect which in human and financial terms is getting worse and worse. This is not to say that we have not given the Prime Minister plenty of notice about it. In October last, his predecessor, the right honourable member for Higgins (Mr Gorton), promised that there would be a rural finance insurance corporation. I have had a question since last August for the Treasurer (Mr Snedden) about the progress of this body.
When the Prime Minister, during the Treasurer’s absence, was acting as Treasurer, I asked him about this proposal to establish a rural finance insurance corporation. I said:
T ask bini when the House can expect to receive a Bill on this subject, which also is within the constitutional power of this Parliament, which also was promised more than a year ago by the Gorton Government, and which also has been more than ever justified by events in the meantime.
This was on 6th October of this year. The Prime Minister replied: 1 am not fully conversant with the problem of the proposed rural insurance corporation. I will find out and lel the honourable gentleman know. He has not yet. Let me remind him how the rural debt situation has deteriorated over the last 10 years. In 1961, the net rural indebtedness of primary producers to major institutional lenders was $103m. Last year, it was $ 1,268m. It is 12 times as large in one decade. This does not include debts to hire purchase companies, trade creditors and private lenders. No reference to this has been made by the Prime Minister. He still has not given the information which he promised me 8 weeks ago and which I have been waiting for the Treasurer to give me since early in August. Again, dealing with the area of the rural sector of incomes, in the last 2 financial years the drop in total rural incomes has been 25 per cent and 22 per cent respectively.
No reference has been made to this area. Everybody knows from observation how employment is dropping in this area.
At least the Leader of the Country Party, the Minister for Trade and Industry, made some reference to decentralisation. This is another matter on which 1 have asked questions of the Prime Minister. As a matter of fact, only at the end of September I asked him about the report of the Commonwealth-State officials committee on decentralisation which was set up 7 years ago. He told me that he believed we soon would be receiving a report from the committee. He said: T will then ensure that it is quickly considered by the Government’. Yesterday he told me that he did not know whether the report had been received. The committee has been established for 7 years. We all know that if anything basic is to be done to preserve the population of the countryside, to stop unemployment and to retain the population it has to be done in measures of decentralisation. Question after question on this subject remain unanswered. They have been directed to the Prime Minister, the Postmaster-General (Sir Alan Hulme) and the like. I imagine that the Country Party is not likely to raise this matter again. What its leader says has been completely destroyed by the performance of the Prime Minister this afternoon. Its members arc not interested in this matter where clearly Government action is required.
The Vernon Committee report recommended concentrated development 5 years ago. I asked the Prime Minister about it. He said that doubtless the Government’s committee will look into this. I asked whether the Government had looked at the reports of the Victorian and New South Wales committees which were presented over 4 and 2 years ago respectively. He said that they are available to our officials. I asked him who the officials are on the committee. He said that that is confidential. This committee, which has been established over 7 years, has met 4 times. The time before last on which it met was in February 1969. It met last month. We have not received any reports. “We do not know who is on the committee. But, obviously, nothing has been done about it and the proposals which were circulating yesterday have been unceremoniously abandoned already. It is quite clear that the House is to go into recess without any new measures being taken which require action by the Parliament.
Is anything to be done along those lines suggested by the 10 professors of economics? We know what they think because they have committed themselves to writing on this. The Treasury officials are muzzled. The Treasury officials have very great differences of opinion among themselves on this matter. Many of the most dedicated and learned people in this country are employed in the Federal Treasury, but they are not allowed to make public statements. The politicians receive varied advice. They have chosen to follow the wrong advice in presenting this year’s Budget. The professors have come down with many proposals. Not a reference to any of these proposals, put forward last month and again this week, has been made by any of the 4 Ministers, who include the leaders of the 2 coalition Parties, who have spoken in this debate.
Some of these measures require statutory action - social services, for example. Would anybody suggest that to increase pensions or to double unemployment benefits would produce inflation? Increasing social service benefits does not increase the cost of production. People who are unemployed do not affect the cost of production. If these things are to be done, they have to be placed on the statute book. The Parliament has to pass a Bill. For instance, if anything is to be done about tariffs - the professors have suggested this - legislation has to be placed on the statute books by passing bills in the Parliament. So we have a situation in which the House will be rising until 22nd February and nothing will be done in Australia which requires action to be taken by the Federal Parliament.
There has been no indication this afternoon from the 2 Party leaders, the Treasurer or the Minister for Labour and National Service that anything is to he done administratively. A great deal can be done administratively. Anything which is done in the field of interest rates can be done administratively. Nothing has been done.
Then there is the ritual incantation about wages - union bashing. Of course, this
Government is so out of touch with the public that it does not realise that in bashing employees it is bashing 90 per cent of the Australian work force. Barely 10 per cent of Australians work for their living as employers or as self-employed persons. The other 90 per cent of people work for wages and salaries. They obtain those wages and salaries through the processes of arbitration, negotiation or organisation. The Liberals are painting themselves more and more disastrously into a corner by bashing 90 per cent of the Australian work force and doing nothing for the people who are unemployed or who are retired. This is, I am glad to say, a formula for political disaster. They have burned their boats for this year. Tt is quite plain that nothing can be done now for the first three-quarters of the current financial year. It is quite plain that nothing is to be done by the Parliament and the Government is not going to do anything by administrative action. What is the unemployment situation in Australia? When I said in my speech on the Budget that it was likely that the figure would be 100,000 this year I was castigated by the Prime Minister for having a fevered imagination. Since then every statistic has borne out this statement.
The institute of Applied Economic Research tells us in its analysis for the third quarter of this calendar year that by 1972- 73 Australia will have 1 00,000 unemployed not as a January or February seasonal aberration but as the average level of unemployment throughout the year. As the ‘Sydney Morning Herald* brutally but accurately stated before the Budget was 3 weeks old, the Government’s formula was to reduce the pressure on incomes by producing unemployment. Yet prices have continued to rise. Last year in Australia they increased by 6.5 per cent. In Canada, they increased by 3.3 per cent, Germany by 4.3 per cent, the United States of America by 5.8 per cent and in Great Britain by 6.3 per cent. We have seen this extraordinary achievement, as my colleague the honourable member for Melbourne Ports pointed out yesterday: Whereas in other countries there have been governments which have produced inflation in some cases or unemployment in others, in Australia we have a singular achievement of a national government which has produced both inflation and unemployment. The professors and all the people who are free to write about unemployment say that it will continue at over 100,000, not just for this financial year, but for the next financial year as well.
The Prime Minister mentioned nothing about prices. There is no doubt that the Government attempts to have a wages policy. The Commonwealth is the largest employer in Australia. It also makes all the laws and all the appointments which cover a majority of the work force in Australia. The whole of the Commonwealth arbitration system is a creature of this Government. It operates under the Government’s laws and it is operated by its appointees. But despite all this nothing has been done about prices.
I would have thought that in his talks with Mr McMahon the President of the United States of America would have convinced him that even the most conservative people could with profit take some domestic initiatives as well as international initiatives; that you could not only achieve overseas markets by some new initiatives but also deal with domestic inflation, prices and so on through initiatives taken by national governments. Back in August and again in November President Nixon brought about controls - we would never have expected a Republican to do so - over prices and wages. The opportunity was presented to the Australian Government by the Premiers to do something about it. The Liberal Premier of New South Wales, after a unanimous resolution of the New South Wales Legislative Assembly, asked for a Premiers Conference to discuss prices and jobs. The Prime Minister has not yet answered the request. Admittedly, he needs advice. He cannot even reply to a no confidence motion without having a 24- hour adjournment and without going out with his officials for a 2-hour briefing.
Mr Askin’s patience must be wearing very thin indeed. On Tuesday of last week I asked the Prime Minister when he would answer Mr Askin’s request for a Premiers conference to discuss prices and jobs. The Prime Minister replied:
The latter is now hi the hands of the Department of the Treasury and other relevant departments and I hope that they will be able to give me advice or recommendations during the course of the next few days. When that has been done and I have made up my mind 1 will announce to the House what the Government intends to do.
Today we were not told anything about it. There are only 4 more days on which we can be told. It is quite plain that the Liberal Prime Minister is stalling the Premiers on this matter. A Premiers Conference has been requested not only by the Premiers of New South Wales and Tasmania but also by the Premiers of South Australia and Western Australia. Of course, the Premiers of New South Wales and Tasmania realise how bad things are when companies in large provincial centres based on rich Australian resources of coal, iron and bauxite are putting off men and when people are being laid off in the steel industry and the aluminium industry. Now it is plain that these Premiers will not have their request heeded by the Prime Minister. He is stalling.
The Liberals have run out of ideas. They will not even collaborate with their colleagues in the State parliaments. This was a golden opportunity to take action in some of those fields in which the Australian Government is handicapped by a nineteenth . century .Constitution. Let us face it, it is more difficult for our national Government than for any other national government to carry out a prices policy; but with the co-operation .of the States we can do a great deal on prices. Nevertheless the Commonwealth can do certain things. It is the biggest purchaser in Australia. As I suggested during my speech on the Budget, we could set up a parliamentary committee to supervise the pricing policies of those corporations which depend on Commonwealth orders or Commonwealth contracts or Commonwealth protection or Commonwealth subsidy.
We can do something about it. But we can do nothing in other fields of prices without the collaboration of the States. If there were a Premiers Conference this opportunity would be available to Australians for the first time since the Menzies first credit squeeze of 1951. The Premiers are now prepared to discuss these matters. For over 12 years the Liberals have stalled on the unanimous recommendations of the Joint Committee on Constitutional Review. The States are now seeking a Premiers Conference. The Prime Minister has fobbed them off. In some fields in which prices are rising worst of all, such as in the cost of land for housing, the States have unfettered discretion and power. I refer to areas in which the people are copping it more and more - increases in the price of land, the cost of transport and hospital services, and the price of private motor cars. The States are putting up these prices and the Commonwealth Government is putting them up as well. There is no collaboration between the two. It is quite clear that the Liberals have run out of ideas. They cannot work together. The people of Australia are being condemmed to another 4 months of inaction.
– One of the things which struck one’s mind while the Leader of the Opposition (Mr Whitlam) was speaking was the most extraordinary statement that this government, unlike a number of other governments, has managed to produce in this community both unemployment and inflation. I would suggest to the Leader of the Opposition that he might take a look at the position in the United States of America in regard to great unemployment and increasing inflation, that he might take a look at the United Kingdom where the unemployment numbers are approaching -1 million and where the rate of inflation is greater than it has been here, and that he might take a look at Canada where the same situation prevails. One is quite certain that on comparisons - 1 confine myself to that - what has been happening in Australia is better than what has been happening in any of those nations to which I have referred.
There has been talk about the Budget strategy and a suggestion that the Budget strategy was wrong and that perhaps the alleged problems in Australia’s economy today stem from that last Budget. Let us have a look at what the situation was when that Budget was framed. We had - there is no gainsaying this - inflation at an accelerating rate because of cost-push factors, because of Arbitration Court awards, because of wages boards awards and because of negotiations carried out perhaps with a tinge of blackmail by unions or sections of unions with particular employers. We had that flowing into the economy. T wish to return to that later. But we also had savings at such a high rate and so much money available to be invested that there was a greater potential demand intiation than we had ever had in this nation before. The Government therefore took action which it can take through a Budget, to ensure that this demand inflation did not eventuate. Were it to have been imposed on cost-push inflation then that which we have suffered would be nothing compared with what would have occurred.
This demand inflation did not eventuate. It might not have eventuated even if the Government had not taken the action against it which it did. But it might have eventuated, and if it had it would have been immensely damaging. Can one imagine the attacks which would have been made on . a government, knowing the situation which . existed, if it had not taken some action and that great surge of demand inflation had come swelling into our economy? It was a prudent step to take. Even though the demand inflation did not eventuate, it was nonetheless prudent. So. there is no justification for attacking the Budget strategy as such and claiming that economic ills flow from it.
We need to remember that Budgets brought in by any government can only partially affect inflation in this or any other nation. We are no longer in a situation where a so-called deflationary or inflationary Budget has a major effect on prices and on what is happening inside Australia. We can affect it marginally by budgetary action and this, of course, has been done.’ Birt far more compelling and effective than budgetary action is the action of wage rises and price rises which following wage rises throughout this community.
It has been suggested by the Leader of the Opposition that those who say this are engaged in a ritual incantation or are engaged in seeking to bash employees. I would hope that we on both sides of this House might approach this in a different atmosphere. -It is no ritual incantation to suggest that if wages rise to a much greater degree than productivity rises, then there will inevitably be inflation no matter what any government does. That is no ritual incantation; that is a mere fact. I do not think this can be gainsaid. This is no ritual incantation, nor is it an exercise in employee bashing. If one seeks genuinely, as I believe most members on both sides of the House would seek to do, to see that the buying power, and therefore the prosperity, of employees is increased rather than diminished, the suggestion that wage increases alone are beneficial is open to grave question.
What great benefit does a man get if his wages are increased now by some arbitration award and, therefore, his new income attracts a higher rate of taxation if at the same time he is faced with a rise in the price of everything he has to buy? I think we are approaching the point - this could well be - where this could be selfdefeating and against the interests of the employees. There are arguments, I know, which can be advanced for and against the proposition I have just put forward, but there are arguments for what I have said and that they are not to be dismissed by being called ritual incantations or by having suggestions made that one is seeking to damage the wellbeing of employees. Nobody who has listened to what the Treasurer (Mr Snedden) said today, and to the facts and figures which , have been put before us’ by the Prime Minister (Mr McMahon) and the Deputy Prime Minister (Mr Anthony), could fail to believe that overall - I emphasise that - the Australian economy is as sound and as good as any economy in the world. Nobody listening to those figures could, I think, have any impression but that the future of Australia and Australia’s economy - again overall - is bright and that there are immense opportunities before us. This is clear from all that has been said.
But if we are to make the most of those opportunities, and if we are to see that the ordinary people of Australia - the man and woman in the street- get .the benefits of making use of those opportunities, then we must combat the root cause of our troubles today which is inflation. That is the real problem before us. In previous times it was simpler and inflation could be put down to demand inflation, that is, to people calling for more goods than could be produced, and because they called for more goods than could be produced the prices of those goods rose. That was demand inflation and, therefore, one adopted the classic method of raising taxes or interest rates or increasing unspent Government surpluses in order to damp down that demand inflation. That was simple. But that is not what we have in this country at the moment. Our problems do not stem from demand inflation but rather - I come back to it - from cost inflation. There can be little pleasure in realising how strong and sound Australia’s economy is. and in realising the great opportunities which lie before us, if we still have inside our country, as we have, pensioners, those on superannuation, those on fixed incomes of all kinds, lower paid members of the community, those struggling in rural areas against higher costs and lower returns, those seeking to develop export markets in manufactured goods - all those people feeling and knowing only too well that however strong our economy may be and however bright our future prospects are. their incomes are buying less each year due to cost inflation. If it is true that these things stem from cost inflation, what should we do about it? What can we do about it?
I submit that we can do nothing about it until arbitration commissions - wage tribunals - are prepared to at least accept that they have a responsibility for the economic effects of their decisions. In tha past we have had the Arbitration Commission saying: ‘We do not accept any economic responsibility. We do not fake that into consideration.’ Yet it is the only body in Australia which can make such decisions because at the moment the Parliament cannot. lt is left to the Arbitration Commission, and if economic results are not taken into account by the Commission, then, we have an irresponsible section of the community. Having said what 1 believe to be the cause of our trouble, I want to come back to consider what we can do to remedy it. 1 do not think that one can expect the wage earning section of the community to pass a self-denying ordinance and say: ‘We will not press for higher wages. The other sections of the economy can do what they like but we will not press for that.’ We cannot expect that.
But surely we can expect that the organised trade union leaders of Australia would be prepared to sit down with the organised leaders of industry, and with the Government, and try to work out a system or an agreement which could be seen to be fair to all whereby they would say: ‘Because it is to our benefit - we trade unionists being affected by rising prices perhaps more than are other sections of the community - we will therefore, confine our requests for wage increases, for arguments sake, to the increases that can be shown to have occurred in the cost of living. We will do this for our part if you, for your part, will undertake, not that you will not raise prices, but that you will be able to justify any increases in prices that you make by showing that the wage component has increased, the raw material component has increased or that interest rates or whatever it might be have increased. If you can do that and we do the other, then we can bring about a pause, for some years at any rate, in this real root cause of oppression of some sections of our community.’ This is not, attain, a matter of economic policy of a government to which this motion is directed, it is not a matter of budgetary action; it is a matter which is at the root of Australia’s present problems, and it is one which I would hope members on both sides of this chamber would seek to bring about. ft is true, as an honourable member opposite mentioned, thai in speaking to this subject in Brisbane I did say that we cannot expect the unionists, even if they agree with the diagnosis that f have given here, to alone accept a self-denying ordinance but that v/e should sit. down with them, and when we sit down with them we should nol be concerned primarily with the question of sanctions or no sanctionsnot primarily, though that is an important matter - hut with whether an agreement can be reached whereby, for a term of years, application for wage rises shall be confined to increases to cover cost of living increases, and prices shall not be raised without some precess of price justification. Is anybody in this House prepared to say that if that could be brought about it would not be to the benefit of everybody in Australia and not just those whom the unions and the Opposition claim to represent, namely, the employees? I suggest that it would. I suggest that the workers of today would like nothing better than for there to be a cessation of price rises and a cessation of wage rises other than those required by cost of living adjustments.
– What is the Government doing about it?
– The honourable member is not in touch with the people of Australia if he believes that that is not so. I do believe that prior to the discussions to which I have referred being held we should consider - I put it no higher than that - the possibility of asking the States whether they will agree to refer to the Commonwealth the powers over wages and prices which I am told the States have and the Commonwealth does not have. In that way discussions could be held at which both parties would be able to make undertakings - one with the other - instead of one party being unable to make an undertaking to the Commonwealth Government because it has no power to do so. I am not suggesting that whatI have put forward would be easy to achieve. I do not underestimate the difficulty of taking such a course of action. I do not underestimate . the problems which could arise and the possibility that those problems will not be overcome. But 1 think it ought to be tried in order to achieve both industrial peace and a diminution of inflation.
We would be still left with the problem of what I shall call wildcat strikes, which also add to costs and cause inflation. By wildcat strikes I mean strikes which are called by shop stewards or a section of a union at a time when some large project which involves the pouring of much concrete is half completed. Unless the pouring of concrete is completed the concrete which has been poured and which solidifies has later to be chipped out and a new start has to be made. I mean strikes which suddenly occur at a factory that has an overseas contract which is of great importance to Australia but which carries a penalty if it is not completed in time; and not those employed in the factory but perhaps the crane drivers or theli ft drivers or a small section in that factory goes out on strike and the rest are unable to work and the owner is faced with the alternative of ruin or capitulation. They are really damaging strikes. They really add to the cost of everything. They really add to the burdens on the employees whom the Leader of the Opposition says the Government is trying to bash when it tries to take them on. I believe that the unions, the Government, the Liberal Party of Australia and the Australian Labor Party should be at one in seeing that that type of strike is not successful. On the broad union side, althoughI think sanctions are required as an ultimate resource,I should hope that with common sense and a realisation of common interest such sanctions as were retained would be in the background as a very last resort for use when everything else has failed and not until then. But I do believe that these sanctions need to exist.
I have not heard a speaker on the Opposition side of the House attack the positive steps which the Government has taken in other fields to combat inflation. Nobody said that it was wrong for us to bring in resale price maintenance. Nobody attacked us for introducing the new restrictive trade practices legislation, which is to be stronger than the old Trade Practices Act, and the extension which has been made possibleby the concrete pipes case. Nobody has attacked us for a reduction in the growth of public expenditure, which is growing but at a smaller rate than the rate at which it grew last year. Nobody has attacked us for recently lowering interest rates. Nobody has attacked us for suggesting a long term approach to the problem by way of a tariff review. Yet these are all economic measures which have been taken by the Government and all of them have had a salutary and good effect on the economy, though they have no overcome the problems of those individuals to whom I have referred. But they are not Party problems nor budgetary problems but parliamentary problems in relation to which we on both sides of the House should set some kind of example to the unions and the industrialists by not scoring political points on every side. The cost-push problem is the root cause of inflation. Let us overcome that problem in fairness to all. Let us not expect the Government to do it by budgetary measures. If we can do that the future which is a potential for us will be a reality.
Motion (by Mr Giles) put:
That the question be now put.
The House divided. (Mr Speaker - Hon. Sir William Aston)
Majority . . . . 8
Question so resolved in the affirmative.
Question put -
That the motion (Mr Crean’s) be agreed to.
The House divided. (Mr Speaker - Hon. Sir William Aston)
Majority .. 6
Question so resolved in the negative.
– I present the following petition:
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of citizens of the Commonwealth of Australia respectfully showeth:
That Lake Pedder, situated in the Lake Pedder National Park in South-West Tasmania, is threatened with inundation as part of the Gordon River hydro-electric power scheme.
That a alternative scheme exists, which, if implemented would avoid inundation of this lake.
That Lake Pedder and the surrounding wilderness area is of such beauty and scientific interest as to be of a value beyond monetary consideration.
And that some unique species of flora and fauna will be in danger of extinction if this area is inundated.
Your petitioners therefore humbly pray that the
Federal Government take immediate steps to act on behalf of all Australian people to preserve Lake Pedder in its natural state. All present and particularly future Australian will benefit by being able to escape from their usual environment to rebuild their physical and mental strength in this unspoilt wilderness area.
And your petitioners, as in duty bound, will ever pray.
– I present the following petition:
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully sheweth:
That the Australian Education Council’s report on the needs of State education services has established serious deficiencies in education.
That these can be summarised as lack of classroom accommodation, desperate teacher shortage, oversized classes and inadequate leaching aids.
That the additional sum of one thousand million dollars is required over the next 5 years by the States for these needs.
That without massive additional Federal finance the State school system will disintegrate.
That the provisions of the Handicapped Children’s Assistance Act 1970 should be amended to include all the country’s physically and mentally handicapped children.
Your petitioners most humbly pray that the House of Reprsentatives in Parliament assembled will take immediate steps to
Ensure that emergencyfinance from the Commonwealth will be given to the States for their public education services which provide schooling for 78 per cent of Australia’s children.
And your petitioners, as in duty bound, will ever pray.
– I present the following petition:
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of citizens of the community of the La Trobe University respectfully sheweth:
That the increase in tertiary education fees for 1972, will cause increased hardshipforasignificant proportion of tertiary students.
That tertiary fees and concomitant living coats are a formidable barrier preventing significant numbers of students entering tertiary education who nevertheless have the ability to do so.
That the increase in tertiary fees for 1972is immoral, in that Universities and Colleges of Advanced Education are being further restricted to that minimal section of the Australian population who can afford to send their sons and daughters onto higher education.
That all education should be free including tertiary eduction.
Your petitioners therefore humbly pray that the Federal Government take immediate action to introduce in order of priority
Universal Commonwealth Scholarships 2.Commonwealth Scholarships on the basis of need rather than academic ability
Abolition of tertiary fees
And your petitions; as in duty bound, will ever pray.
– I present the following petition: .
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully sheweth:
Your petitioners most . humbly pray that the House of Representatives in Parliament assembled will take immediate steps to:
Ensure that emergency finance from the Commonwealth will be given to the States for their public education services which provide schooling for seventy-eight per cent of Australia’s children.
And your petitioners, as in duty bound, will ever pray.
– I present the following petition:
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembld. The humble petition of residents of Swan Hill respectfully showeth:
That they are deeply concerned about the plight of the East Pakistani refugees in India.
Your petitioners therefore humbly pray, that the Government will immediately increase aid to $l0m, for Pakistani refugee relief.
And your petitioners, as in duty bound, will ever pray.
-I present the following petition:
Tothe Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of citizens of the Commonwealth of Australia respectfully showeth: That Lake Pedder, situated in the Lake Pedder National Park in South-West Tasmania, is threatened with inundation as part of the Gordon River hydro-electric power scheme.
That an alternative scheme exists, which, if implemented would avoid inundation of this lake. That Lake Pedder and the surrounding wilderness area is of such beauty and scientific interest as to be of a value beyond monetary consideration. And that some unique species of flora and fauna will be in danger of extinction if this area is inundated.
Your petitioners therefore humbly pray, that the Federal Government take immediate steps to act On behalf of all Australian people to preserve Lake Pedder in its natural state. All present and particularly future Australians will benefit by being able to escape from their usual environment to rebuild their physical and mental strength in this unspoilt wilderness area.
And your petitioners, as in duty bound, will ever pray.
-I present the following petition:
To theHonourable The Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of citizens of Australia respectively showeth:
It is obvious the people of Australia are vitally concerned about the welfare of some nine million East Pakistan refugees that have crossed the border into India. Also they are equally concerned aboutthe desperate plight of millions of displaced persons in East Pakistan, many of whom are worse off than the refugees, as they are not even receiving relief supplies. The involvement of the Australian is evidenced by their willingness to contribute substantial funds to voluntary agencies, to assist their work in these countries.
As some twenty million refugees and displaced persons are today facing acute problems of hunger and privation - nutrition and child family problems - ultimate famine and death on an unprecedentedscale - the Commonwealth Government must plan to come to their assistance in a more sacrificial way.
Your petitioners therefore most humbly pray that in tackling these great human problems in Bengal, by far the greatest this century, the House of Representatives in Parliament assembled, will request that a special meeting of Cabinet be called to provide $10m for relief purposes in India and East Pakistan, and a further$50m over three years to help rehabilitate the refugees in East Pakistan.
And your petitioners, as in ‘duty bound, will ever pray.
-I present the following petition:
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned respectfully showeth:
That death from mass starvation and disease is occurring among Pakistan’s refugees on a scale unprecedented in modern history.
That, as part of the world community, the Australian Government has an immediate responsibility for concerted action.
That present Government aid to the refugees in India is meagre and shameful for a country of Australia’s position and wealth.
Your petitioners most humbly pray that the House of Representatives in Parliament assembled, should:
Increase monetary aid for the refugees in India to at least $1 per capita immediately and make provision for a further and extra grant for the victims of the famine in East Pakistan.
Grant tax deductibility to donations of $2 and over to Australian voluntary agencies working with the refugee problem.
Ensure that the Australian Government does all in its power to help bring about a political settlement which would be acceptable to the people of East Pakistan.
And your petitioners as in duty bound will every pray.
– I present the following petition:
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of certain citizens of Australia respectfully showeth:
That the suffering of the Pakistani refugeesis such as to warrant immediate relief.
That the amount of aid allocated for Pakistani refugee relief does not befit Australia’s standing in the world as a developed nation.
That the state of tension between the Indian and Pakistani Governments is such as to threaten war.
Your petitioners therefore humbly pray that the Government will (1) immediately increase aid, monetary or otherwise, for Pakistani refugee relief to the value of $10m, (2) grant as aid, on a continuing basis, a percentage of the gross national product, and (3) use every diplomatic channel possible to ease tension between the Indian, and Pakistani Governments.
And your petitioners, as in duty bound, will ever pray.
– I present the following petition:
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully sheweth:
That the Australian Education Council’s report on the needs of government education services has established serious deficiencies in education, the most important areas being a severe shortage of teachers, inadequate accommodation, and, as a result, oversized classes.
That extra Federal finance is urgently required to save the government school system.
That while the needs of the government schools are being neglected, large amounts of public money is being given, in various and numerous grants, to private schools.
Your petitioners most humbly pray that the House of Representatives in Parliament assembled will take immediate steps to make emergency Federal finance available to the States for Slate school education, and divert the large sums of public money being spent on private schools, to the government school system for which the government is truly responsible. And your petitioners as in duty bound, will ever pray.
– I present the following petition:
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned respectfully showeth: - that only a quick settlement of the PakistanBanglaDesh issue will make it possible to avert the death of many millions. - that the danger of major warfare, which could come to involve the superpowers, will not pass until there is such a settlement.
Your petitioners most humbly pray that the House of Representativesin Parliament assembled should: - urge that the Government of Australia cease all aid to the West Pakistan Government, either directly or through SEATO where this may be used for military purposes that such aid be applied for the relief of the refugees.
And your petitioners as in duty bound will ever pray.
– I present the following petition:
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of citizens of the Division of the Australian Capital Territory respectfully showeth:
That the Australian Capital Territory Pharmacy Ordinances 1931-1959 Section 46, Sub-section (1) states that a person shall not publish any statement, whether by way of advertisement or other wise; to promote the sale of any article as a medicine, instrument or appliance … for preventing conception.
And that this infringes upon each individual’s right as a human being to all available information about contraceptive devices in order to help prevent unwanted pregnancies.
Your petitioners therefore humbly pray that the wordsor for preventing conception be deleted from Sub-section (1) of Section 46 of the Australian Capital Territory Pharmacy Ordinances. And your petitioners, as in duty bound willever pray.
– I present the following petition:
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of citizens of Australia respectively showeth:
It is obvious the people of Australia are vitally concerned about the welfare of some 9 million East Pakistan refugees that have crossed the border into India. Also they are equally concerned about the desperate plight of millions of displaced persons in East Pakistan, many of whom are worse off then the refugees, as they are not even receiving relief supplies. The involvement of the Australian is evidenced by their willingness to contribute substantial funds to voluntary agencies, to assist their work in these countries.
As some 20 million refugees and displaced persons are today facing acute problems of hunger and privation - nutrition and child family problems - ultimate famine and death on an unprecedented scale - the Commonwealth Government must plan to come to their assistance in a more sacrificial way.
Your petitioners therefore most humbly pray that in tackling these great human problems in Bengal, by far the greatest this century, the House of Representatives in Parliament assembled, will request that a special meeting of Cabinet be called to provide $10m for relief purposes in India and East Pakistan, and a further $50m over 3 years to help rehabilitate the refugees in East Pakistan.
And your petitioners, as in duty bound, will ever pray.
-I present the following petition:
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of residents of the Division of the Australian Capital Territory respectfully sheweth:
That there is a likelihood that education in the Australian Capital Territory will in the foreseeable future be made independent of the New South Wales education system.
That the decentralisation of education systems throughout Australia is educationally and administratively desirable, and is now being studied by several Stale Government Departments.
That the Australian Capital Territory is a homogeneous and coherent unit especially favourable for such studies.
Your petitioners therefore humbly pray that a Committee of Inquiry, on which are represented the Department of Education and Science, institutions of tertiary education, practising educators, and the Canberra community, be instituted to enquire into the form that an Australian Capital Territory Education Authority should take, the educational principles and philosophy that should underly it, and its mode of operation and administration.
And your petitioners, as in duty bound, will ever pray.
– I give notice that contingent on the order of the day for consideration of the report of the Committee of Privileges relating to an article in the ‘Daily Telegraph’ which was brought up in this House on Tuesday, 30th November, being read,I shall move for the recommittal of the report.
– I give notice that at the next sitting I shall move:
That the Education Ordinance 1971, No. 28 of 1971, made under the Seat of Government (Administration) Act 1910-1970 be disallowed.
I also give notice that at the next sitting I shall move:
That the amendment to Regulation 6 of the Commonwealth Motor Omnibus Fares Regulations as contained in Regulation 1971, No. 7, made under the Commonwealth Motor Omnibus Services Ordinance 1955-1970 of the Australian Capital Territory be disallowed.
- Mr Speaker,I ask that all questions be placed on notice.
The following Bills were returned from the Senate:
Without amendment -
Export Incentive Grants Bill 1971.
States Grants (Housing) Bill 1971.
Homes Savings Grant Bill 1971.
Without requests -
Excise Tariff Bill 1971.
Diesel Fuel Tax Bill (No. 1) 1971.
Diesel Fuel Tax Bill (No. 2) 1971.
Customs Tariff Bill (No. 2) 1971.
Customs Tariff Bill (No. 3) 1971.
Sitting suspended from 5.59 to 8 p.m.
Debate resumed from 25 November (vide page 3697), on motion by Mr N. H. Bowen:
That the Bill be now read a second time.
– This Bill comes to us via the Senate because the present Attorney-General (Senator Greenwood) resides in the Senate and not in the House of Representatives. The legislation that we have before us arises because of a decision which was given in the High Court of Australia in what was known as the Rocla Pipes case - that is a short description - or, correctly, as Strickland v Rocla Concrete Pipes Ltd. Section 51 of the Constitution states that:
The Parliament shall, subject to this Constitution, have power to make laws for the peace, order and good government of the Commonwealth with respect to:
The section then lists 39 areas of jurisdiction. Placitum (xx.) states:
Foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth.
Several years ago the Parliament enacted laws with regard to restrictive trade practices. Restrictive trade practices legislation is an admission that whilst competition is desirable it is prevented from operating reasonably in considerablesections of industry. 1 am fortified to some extent by a lecture given in Tasmania by the former Attorney-General, the honourable member for Berowra (Mr Hughes) on 10th October 1970. He said:
That is, the Act that was held invalid in Strickland v. Rocla Concrete Pipes Ltd - is founded upon the position that competition in business is, generally speaking, desirable for economic and social reasons. While competition can be uncomfortable for those affected by it, its pressure tends to restrain costs and prices and constitutesa continuing inducement to businesses to improve their efficiency.
He said much more but at least he indicated -I think it is a view which is held particularly by honourable members opposite -that we live in what is described as a competitive free enterprise economic system. Nevertheless, in Australia we often have some difficulties in this field because, as a result of the scale at which economic activity is conducted and in relation to our population, it must be acknowledged that perhaps one or two and certainly often less than 3 firms can be preponderant in a particular field. When the legislation was declared invalid by the High Court the reason given was that had it been founded on the power that I have quoted, namely, the power of the Commonwealth with regard to corporations, perhaps it would not have been invalid. The AttorneyGeneral said that the present Bill is designed to close what might be described as drafting loopholes. My colleague, Senator Murphy, who led this debate in the other place said that the new legislation might be described as: . . a model of impotency, a monument to the Government’s determination to put the interests of big business, monopolies and multi-national corporations before the interests of the public.
At least the Australian Labor Party is greatly interested in what might be called the public interest. Section 52 of this proposed Bill attempts to define what is the public interest. It indicates some of the difficulties that confront us in trying to define public interest. The Bill is inadequate in many respects and my colleague, the honourable member for Cunningham (Mr Connor) who is experienced in the law relating to this subject, will delineate better thanI am able to do our objections to this legislation. My colleague, Senator Murphy, described the public interest clause as:
If an attempt were made to define the spirit of this Act, I should think that there would be considerable ideological debate on the matter. What we come up against the power of corporate activity in the modern economy. I do not think that anybody denies that the sort of economic activity that is indulged in in most modern economies nowadays could not occur except via what we describe as companies or what other countries call corporations. When the word ‘company’ is used, 1 point out that there may be great disparities in the size of companies. In our law we have a kind of broad recognition of the difference in scope. We divide companies into what are described sometimes as private companies and sometimes as public companies. Statistics supplied by the Commissioner of Taxation undoubtedly would show that the majority of what are described as companies in our system are registered as private companies, but there is also no doubt that the most significant form of operation in Australia is the public company or, for want of a better term, the public corporation. Some of them, in relation to the total economy, are quite gigantic in their operations and, unfortunately, many of them are now inter-meshed with other corporations which have their headquarters outside of Australia.
One of the circumstances bedevilling Australia at the moment -I think that to some degree, this was touched on during the debate on the economy this afternoon - is that more and more we see in Australia that the biggest operators in the corporate field are companies whose shares are owned entirely overseas or companies which are dominated considerably by either direct or indirect control of their operations. One need only mention such an enterprise as General Motors-Holden’s Pty Ltd, which builds in Australia a product that still has a distinctively Australian name- the Holden motor car - but whose ownership is entirely outside of Australia. This is pretty true of the whole of the automotive industry in Australia, which is highly significant to this country. It is true that once it is here it is entrapped by reason of the fact that its assets are here and its activities are here. We occasionally raise difficulties about what are called export franchises. There is some inability on the part of General Motors in Australia to sell in places such as Singapore or Malaysia, and to some extent that position in conditioned by the fact that enterprises similar to General Motors in Australia operate in places such as Singapore and Malaysia as well. It is understandable enough, I suppose, that they lessen the degree of competition by dividing the areas to which vehicles can be expoited. Nevertheless this is a significant factor in corporate activity.
When this legislation that we are now refining was contemplated its architect was Sir Garfield Barwick, now Chief Justice of the High Court of Australia. He had within the confines of his Jaw provisions that would have covered what are described these days as mergers or takeovers. When my colleague in the other place was debating this matter - I commend his speech to honourable members on both sides - he referred to some statistics that have been compiled by Professor Wheelright, the associate professor of economics at the University of Sydney, whom he described as one of Australia’s authorities in this field. He said that Professor Wheelright had estimated that there now are 2 takeovers a week on average in this country. He went on further to say that Professor Wheelright’s estimate is that over recent years foreign takeovers have averaged one every 3 weeks. Somehow we have to put these 2 sets of statistics together. Senator Murphy went on:
Often, he says, these arein an unrelated field, the latest being the buying out of old established vineyards–
I think he means firms like Lindemans and Orlando Wines in South Australia and I think another one in the Hunter Valley - by a large foreign owned paper making company, a tobacco company and a food processing com pany.
These are all indications of what has happened. Already successfully established industries have been subject to takeover by interests outside Australia. There is not any doubt that following the decision in Strickland v. Rocla Concrete Pipes Ltd this Parliament has power to legislate with respect to trading and financial corporations formed within the limits of the Commonwealth and also with respect to foreign corporations.
We are a bit sceptical about the claims by the Government both in this House and in another place that the Bill that is before us is only a holding operation and that the Government has in prospect more comprehensive legislation. I think that the Minister for Foreign Affairs (Mr N. H. Bowen) himself indicated that the matter had been the subject of a departmental inquiry. He said:
I should like to stress the holding character of this Bill.
He went on to say that the Government is currently reviewing this legislation with a view to strengthening it. Yet oddly enough although my. Party had inserted in the Bill in another place provisions which it believed strengthened this Bill Government supporters in this House are now proposing to take them out. The powers inserted in the Bill in the Senate dealt with 2 subject matters - predatory pricing and monopolisation and something described as discriminatory dealing. We find it a bit odd that the Minister should claim on the one hand that the Government wants to strengthen the Bill and yet, certain provisions having been inserted in it in another place, the Government now wants to take them out. After all the Bill originated in the Senate. Whatever honourable members may believe, in relation to all measures with the exception of money Bills, the Senate has identical powers with those of this House. It can initiate as it did in this measure, it can amend or. can negate if it wants to. A majority of the Senate decided on certain proposals being inserted and now the Government wants to take them out.
I presume that we will have to bow to the majesty of numbers in this place and that those clauses inserted in the Senate will be deleted and that the Bill will have to go back to the Senate in the manner that we often receive Bills from the Senate - with a message that the Senate has agreed to the Bill with amendments. Presumably this measure which is described as a holding measure will go back to the Senate with a similar kind of message saying that the House of Representatives has concurred in the Restrictive Trade Practices Bill with amendments. An interesting proposition is: Where do we go from here and what is the consequence if the Senate insists, as it is entitled to insist, upon retaining what is in the Bill? Will the Government drop the measure and leave this country without any defensive mechanisms to deal with restrictive trade practices?
I think all parties accept the inadequacy of present measures, although the Prime Minister (Mr McMahon) and the former Prime Minister this afternoon commented favourably on certain measures that had been taken. Reference was made to one in this Bill relating to what is called resale price maintenance. If it be said that those amendments were accepted with grace by the Government, I think it is a travesty of the description that they were conceded in the long run because there was public pressure to include them. I think, with all respect to the former Prime Minister, that most of the economic measures that he listed as having been achievements of his Government in recent times were reluctantly conceded after pressure both from the Opposition here and from forces outside the Parliament.
The Postmaster-General (Sir Alan Hulme), who is indicating his disagreement, is one who bows to the winds when they blow, particularly when they are cold enough. All I am saying at the moment is that there is no doubt that the Government will marshal the numbers to execute what it desires. I would ask those honourable gentlemen on the other side of the House who believe that some sort of restrictive trade practices legislation is necessary whether they think the Bill is weakened by the inclusion of the proposals from the Senate. If they do I will be interested to hear their arguments as to why that is. I think we are getting a little sceptical to say the least. The Government has been in office for about 20 years and it has had this legislation in force for about 6 years. When the validity of this legislation was challenged in court the Government had to bow to the decision of the court, and it now says that it has in mind strengthening the Act.
– The honourable member will recall that that announcement was made before the court case.
– I am asking the Minister to adjudicate on the merits of the amendments which were inserted in the Bill in the Senate for the purpose of putting teeth into the force of the legislation and which the Minister now proposes to take out. In fact, the Minister brushed them aside fairly skilfully in his second reading speech. He said: T will not argue about them. I do not think that they ought to be in the Bill. I do not propose to say anything about them’.
– I gave my reasons.
– With all respect, I do not think that the Minister gave very adequate reasons. I ask the other section of the Government coalition whether it is pleased with the scope of corporate activity in Australia and the kinds of things that have occurred in recent times concerning takeovers, mergers and the like. What kind of teeth should be inserted in this legislation? Those on my side of the Parliament have asserted for a long time that restrictive practices legislation with effective teeth was required. I hoped that this debate might deal with the kinds of teeth required. All I suggest with all respect to the Minister is that in this legislation the Government wants false teeth that it can take out when the situation suits it. I am sure that this is not what the Australian public wants. A great deal of public concern exists about what is described as the domination of overseas interests in Australia. These interests are getting into the basic economic development of this country. I have mentioned the automotive industry as one example. That is one of the earlier phase. The later phase that has occurred is in relation to such things as oil refining, oil exploration, natural gas development, mineral development and so on. In these instances, the magnitude of the capital expenditure required is such that on one or two occasions we have had to say: ‘We do not think that we can encompass this in Australia’.
All I am suggesting is that the Rocla concrete pipes case opened up some interesting developments as far as the potentialities of this matter are concerned. I do not know why there was any kind of scepticism in Australia about our powers constitutionally over what are described in placitum 51 (x.) of the Commonwealth Constitution as foreign corporations. It goes further and says ‘trading or financial corporations’. It was suggested by my Party that banking had substantially changed in its character and that much of what is called ‘financial activity’ is conducted now not directly by banks but by something which, by deficiency of definition, falls between banks at the one extreme, finance corporations in the middle and something else called merchant banks at third remove. If was argued that we had no power to operate in this field, lt was suggested from our side that we would treat this sort of thing as though it was within the scope of the constitutional power. I would concede that we tended to suggest that we would regard il as falling within the banking power. The decision in the High Court was that no longer should there be any impediment to legislating in Australia in respect of financial corporations.
Sometimes 1 must confess as a layman to being a li tie bewildered by the kind of precision lawyers will have about circumstances until a case is decided. One of the astonishing things in the Strickland v. Rocla Concrete Pipes Ltd case was that although so much had been assumed as being beyond the power of the Commonwealth this seemed to be resolved almost overnight. Lawyers basically may be conservative gentlemen. I think that unfortunately for the most part they are. Occasionally at least parliaments ought to begin to think of the role of the corporation in modern society This is an untapped field in Australia. It is one which is awakening a great deal more interest in the United States of America and Canada. Again 1 commend the speech made by Senator Murphy in which he referred to cer ain legislation that had recently been passed in our sister dominion of Canada. He said: ‘The Canadian legislation stands beside the Australian Act like a tiger beside a kitten’.
– That was rather windy rhetoric.
– Well, we are pretty used to windy rhetoric in this place. I think that, occasionally, we ought to let the winds blow out and listen to the still small voice. The still small voice would suggest that nobody loves the big corporation.
– That is not right.
– The Postmaster-General says that that is not true. Perhaps it is misguided, but 1 do not think that it is untrue.
– You said that nobody likes the corporation.
– 1 said that nobody loves the big corporation. 1 would concede to the Minister part of his point. We must live with the big corporation. We must do so in Australia. But we must do something to restrain the predatory power of the big corporation. At least we are reaching the situation in Australia where we are becoming concerned about such problems as pollution, the size of the corporate undertaking and things that we loosely describe as bureaucratic power.
Let mc express my hope concerning this projected legislation to the Minister who represents the Attorney-General. The Minister was Attorney-General himself at one time. I. regarded him as an Attorney of some distinction. That may be placatory after some of the comments that I have made. The Minister has indicated that an inter-departmental inquiry into these matters has taken place. I hope there is a little more realisation in Australia: I cannot see any reason for the need in the existing Act of provisions such as the secrecy of the register. Why should these things need to be secret when, for the most part, they are concerned with companies that like to claim that they are public companies? If they are public companies, why do they not wish to divulge the extent of their activities?
I would like to see the provisions of the onus of proof clause reversed. My colleague, the honourable member for the Australian Capita! Territory (Mr Enderby), will say more about this matter later. Why should the whole process be bogged down, as the present Chairman of the Tribunal, Mr Bannerman, suggests, simply because thousands of agreements can be registered and these must be investigated apparently, technically, one by one? Why should not all these agreements be presumed to be obstructive in the first place or be presumed to be against the public interest so that proof to the contrary would lie with the person registering the agreement instead of reversing what .seems’ to be the pattern which is followed in the legislation in Great Britain and in the United States and in the now projected legislation in Canada. If companies want the protection of limited liability and certain other rights in the community and want the right to be called public companies, I think that they are under the duty to expect some son of public restraint on their operations. This seems to me to be’ what the ambit of restrictive trade practices ought to be. The presumption ought to be that if you are big your interests may be against the general interest and you should have to prove that is not the case rather than the onus lying the other way. 1 hope that when the Government is contemplating its substantial amendments they will be the kinds of things it wilt look aL ] hope that it will look at the role of corporate power which, if wc are not careful, can be one of the forces which overwhelms the reality of democracy in a modern economy.
– The problem of monopolies is one which was first dealt with in the Tudor period in Elizabethan England. In the case of modern industrialised economies, of course, we had the Sherman Act of 1890 in the United Stales followed by the Clayton Act which dealt with takeover bids in 1915 and the Robinson-Patman Act of 1936. Of course, in Australia the present Chief Justice of the High Court, Sir Garfield Barwick, first introduced quite a progressive and completely definitive set of proposals in the early 1960s which were submitted to this House in 1962 by a former minister on behalf of. Sir Garfield. We then had the enactment of ! 965 which, in itself, was a masterpiece of evasion and frustration, which was not proclaimed until 1967 and which was finally declared to be this defunct in 1971 in respect of the 1965 proposal - not of Part VIII which deals with resale price maintenance or what may be more commonly termed the ‘Hawke amendments’. This Bill is said to preserve competition in trade and commerce to the extent required by the public interest. Excepting for resale price maintenance, it can best be described as a pious fraud.
The Opposition’s approach to it is twofold: Firstly, to ensure that any amendments introduced by the Government to bolster and validate the present Act will remedy its most obnoxious and blatant effects. The Bill as presented to the House does neither. Secondly, as a government, which we will become, we will enact fully effective and powerful legislation not only on trade practices but also in wide relevant fields. Our objective is to secure, firstly, the preservation of the recent resale price maintenance amendments and the application of their principles of onus of proof and specific criteria of public interest to horizontal agreements. The decision in the Mikasa case largely preserved the resale price maintenance amendments.
Our second objective would be to end the excessive secrecy of the register of examinable agreements. We ako seek to preserve the full definition of monopolisation and prohibition of predatory price cutting which was inserted by the Senate in its recent deliberations on this measure. Thirdly, we would abolish the statutory right of consultation conferred by clause 50 as an instrument of delay and frustration. lt is n piece of legal hocus pocus. Fourthly, we would confer on affected parties, that is, parties who are subject to damage by restrictive practices the right themselves to initiate directly proceedings before the tribunal for breaches. Fifthly, we would clear up the present backlog of over 13,276 registered examinable restrictive agreements. It is poetic justice that the Chief Justice sat in judgment on this Act and provided the constitutional basis on which a Labor government will be able to return any new legislation to his original proposals.
The original Act of 1965 was debated for a fortnight. In my 21 years of parliamentary experience 1 have never seen such coming and going, such huffing and blowing, such patching and further patching and further penalties and further restrictions being placed on the free and effective operation of a measure. . In short- Sir
Garfield could not possibly have recognised his original brainchild after it had been left to the tender and oppressive mercies of the Government. So the Bill in its present form is designed merely to close a loophole. Following its passage, the law in this nationally vital area, it has been said, will be a model of impotence and a monument to the Government’s determination to put the interests of big business, monopolies and multi-national corporations before the interests of the public.
Of course, Australia has a reputation abroad which this Government is determined to preserve as being the last frontier for economic banditry, a place where monopoly power rides unchecked by laws considered to be basic necessities in other modern industrialised nations. It was the Commissioner for the Australian Mutual Provident Society, Dr Bell, who stated that the intensity of industrialised concentration in this country is perhaps the highest in the world. Our economy is dominated by about 200 companies, of which 40 are titans in the business world. Of these giants, 40 per cent are owned or substantially controlled by overseas interests. Excluding Part VII of the present measure - the part referring to resale price maintenance - the measure is a legal zombie. It is a case of taking a corpse and breathing life into it by using the provisions of the concrete pipes judgment which relate to financial corporations. To vary the metaphor, it is a legal funkhole, a humbug and a sham. It has more escape runways in it than a rat’s castle.
The Australian economy will still be controlled, thanks to this new measure, by every restrictive device known to the ingenuity of man. As a whole, it is a legal hybrid with original parts in glaring contrast to the resale price amendments, in which defined practices are made illegal per se with the onus of proof for exemption resting on the interested party who is under the obligation to apply to the court to prove his or its case. The Government has been brazenly indifferent over a period of 3 years to Commissioner Bannerman’s repeated warnings until the bombshell of the concrete pipes judgment. The constitutionally valid corporations powers are substituted for an illegal grab-bag of expedients in the original section 7 of the 1965
Act. in short, the judgment is a victory for Chief Justice Barwick and for Professor Richardson and a slap in the face to those who, over many years, have used the celebrated section 92 of the Constitution as an instrument of constitutional subversion.
I want to take the liberty of quoting from the 1970-71 report of Mr Bannerman, the Commissioner for Trade Practices. The report is for the period which ended on 30th June last. He had this to say:
The Commissioner’s dealing with cases-
The 13,276 of them- is time consuming.
Incidentally, in a whole period of 12 months he was able to deal under section 48, the consultation clause, with only 8 of them. Another 7 were abandoned even before the consultation procedure was invoked. He said:
The Commissioner is not able to take a case to the Tribunal until he has formed the opinion that the restrictions in question are contrary to the public interest, and until he has consulted with the parties, or attempted to consult with them, with a view to securing action on their part that will make Tribunal proceedings unnecessary, lt follows-
I stress these words and I would like to hear the Government’s answer to them - that the pattern of restriction will remain in Australia for many years if most cases are to be dealt with case by case , al the Commissioner’s level, subject to secrecy and without the assistance of genera] rules either in legislation or in decisions of the Tribunal.
Again I quote from page 13 of the same report, and here again we have the dichotomy between section 8, where the Government’s arm was twisted by public opinion, and the original 1965 proposals. Mr Bannerman said:
The 1971 Act breaks away from the approach of the 1965 Act. Whereas the 1965 Act makes the anti-competitive agreements and practices it deals with examinable, the 1971 Act makes resale price maintenance unlawful. The public interest criteria for exemptions for resale price maintenance are narrower and more precise than the public interest criteria under the 1965 Act. The Commissioner is not required to form a public interest opinion, because the Act itself takes a strong prima facie stand. There is, moreover, no statutory requirement that the Commissioner consult with parties before Tribunal proceedings. Indeed, it is not the Commissioner who institutes proceedings’, companies that desire exemptions to permit resale price maintenance must institute the proceedings themselves, and the Commissioner will be a respondent 10 the proceeding”. Unless anil until an exemption is granted, resale price maintenance remains unlawful and may be restrained in the Commonwealth Industrial Court by injunction at the suit of the Attorney-General, the Commissioner or a person who has suffered loss or damage. By contrast, the private right of action under the 19*5 Aci is in substance much more limited, because it is a right lo Mie for damages in the Commonwealth Industrial Court only after the Tribunal has given a decision declaring an agreement or practice to be contrary to the public interest and ils order has been disobeyed. Com- plainants cann themselves institute Tribunal proceedings, but they might in any event find the expense of Tribunal proceedings beyond their means and the difficulties of getting industry information to deal with the 1965 public interest criteria insurmountable.
Let me put it in a more simple form. Let us assume that two companies decide that they will exclude a third from either entering into or operating in a particular field pf industry and the sale of its products; they get their heads together and, in turn, consult a- competent public company lawyer. His advice would be simply this: ‘The present Trade Practices Act is a beauty. You have got nothing whatever to be worried about. Reduce your agreement to writing. You will have to register it and you mast do so within 30 day–, but (ben you are as safe as a church because there are 13,276 agreements. With the delays, frustrations and obstacles that have been inserted in the Act by the present Government it will be generations before the matter, will even come up for consideration.’
This is the real story behind the Act: it will be generations before the matter comes up for consideration. He will continue: ‘Even then you will not be taken before a Tribunal. You will be called in for consultation and persuasion by the Commissioner himself. In the meantime you will be able to go on and do business merrily under the terms of the agreement and you will not be hurt. More than that, contrary to the experience of other countries, the register of restrictive agreements will not be examinable and no-one outside - your trade competitors and those who are being hurt by these practices - will have any idea of what is going on. They will know the consequences because they will be suffering them. But if and when it does finally, after a lapse of what may he generations, come before the then Commissioner of Trade Practices you could be rebuked or, better still, you could decide to be good boys and tear up the agreement. But then, having got to the point where you have worked together for so many years in perfect harmony, you will not need to maintain a registered agreement. As for damages, who can prove if The people who have been hurt by your practice have no access to the agreement It is only if and when the matter goes finally, not merely after consultation with the Commissioner, before the Tribunal itself and after penalties are imposed for a breach of the Act, that the affected parties can sue for damages.’ This is what the Government wants to perpetuate. Shame on the Government! It is a scandal and an insult to the intelligence of fair minded and fair thinking Australians.
– The Bill before the House is a holding Bill brought about because of the High Court case, Strickland v. Rocla Concrete Pipes Ltd, which is commonly referred to as the concrete pipes case. The Bill does not make provision for complementary State legislation nor does it draw upon the reference of power - from Tasmania. The task of including provisions with respect to these matters would have been a complex and time-consuming one and it would have delayed the introduction of the Bill. Such provisions have accordingly, been deferred for consideration in connection with the subsequent strengthening of the legislation. Examinable agreements and practices are covered by the Bill. These have been defined to relate (hem in each case to the corporations power. Similarly the provisions relating to the offence of collusive tendering and collusive bidding have been confined so that they apply only to tendering and bidding by corporations. It is pleasing to note, too, that the agreements and practices of certain primary produce marketing bodies are exempt from the operation of the present Act by virtue of regulations made under section 106. These exemptions are continued by the present Bill but they maye be varied by further regulation.
Tonight I want to speak more particularly in regard to the amendments that have been made to the Bill in another place. The Restrictive Trade Practices Bill contains a new provision, clause 36, which was inserted in another place, which provides for criminal penalties for the offence of monopolisation. This new provision was introduced in the Senate as an amendment to the Bill introduced by the AttorneyGeneral. The provision, if enacted, will have widespread operation. It is objectionable to me and to many others. It constitutes a sweeping alteration to the opera- tion of and the policy lying behind the previous Act now declared invalid on constitutional grounds not directly relevant to this clause. A greatly increased range of corporations and a greatly increased range of business activities are to be treated as monopolies.
Clause 36 imposes serious and immediate criminal penalties in respect of a potentially wide range of activities and corporations but it fails to state, except in the most vague terms, what activity is criminal and what is not. It would be impossible for any corporation to know whether any particular business activity was or was not a criminal offence. It treats the poorlydefined business activities which might amount under this provision to criminal offences as monopolisation in a manner quite different from those examinable practices which might previously have amounted to monopolisation. Contrary to the provisions of the previous Act, which are reproduced in the present Bill in clauses 39 and 41, it provides for immediate criminal penalties in respect of practices without the opportunity for consultation between the Commissioner and the corporation concerned to reach agreement as to some desirable effect and modification of the practice involved, and without giving the corporation concerned the opportunity of defending its practices in accordance with the gateway provisions of the Act applicable to other practices and without any warning that some particular business activity might be regarded as criminal by those responsible for the administration of the Act.
The proposed provision is, in many respects, not reconcilable, and not consistent, with other provisions in the Bill dealing with monopolisation. This clause was added to the Bill in the Senate without proper consideration or debate as to the consequences of such an amendment and in the absence of any evidence that a sweeping amendment of this type was necessary or justified by existing business practices. It is said that this is only holding legislation pending revision by the Government. However, it may be many months or even years before such revised legislation is introduced. I know that the Attorney-General is giving this matter his urgent attention, but there are delays in drafting and other business comes forward, and it may possibly take some time before this holding legislation is superseded. Clause 36 of the Bill is in the following terms: (1.) A person who engages in monopolisation is guilty of an offence. (2.) In this section - monopolisation’ means acquiring or using monopoly power with the intention of preventing a person from entering or expanding a business, or using monopoly power in a manner that is unreasonable and detrimental to consumers of goods or services; monopoly power means the power to fix, or influence substantially, the market price of any kind of goods or services, or to prevent persons entering or expanding business. (3.) The penalty for an offence against this section is:
This clause refers to persons generally and imposes penalties on both corporations and persons. Since it seems very likely that the clause in its present form would be regarded as unconstitutional and would require amendment to cover only corporations, it is preferable to consider the effect of the clause only so far as it would apply to corporations. I refer this aspect to the Minister for Foreign Affairs (Mr N. H. Bowen). It appears to me that if this was challenged in the High Court it is not likely that the learned judges would regard persons as corporations. When the Rocla case was first brought on we believed that the Act applied only to corporations and could not be levelled against persons. I am sure my learned friend, the Minister for Foreign Affairs, with has vast experience in these matters, will be able to assist us in this determination. Essentially this is a clause which imposes criminal sanctions over a whole range of activities. In this regard it is a significant departure from the procedure previously established for the control of restrictive trade practices laid down by the previous Act and reiterated, by and large, in the present Bill.
Under the previous Act only 2 precisely defined activities were immediately made illegal, namely, collusive tendering and collective bidding.In other areas provision was made for examining agreements and for examinable practices to be condemned and eventally to attract criminal sanctions if an offending corporation refused to abide by the decision of the Tribunal. However, the question of criminal senctions did not arise until there had been an investigation by the Commissioner, the formation by the Commissioner of the opinion that the agreement or practice was contrary to the public interest and a consultation between the Commissioner and the parties concerned with a view to the termination or variation of the. agreement or practice, and the decision by the Tribunal that the particular agreement or practice was in fact contrary to the public interest. This procedure amounted to a recognition without a full and careful examination of the particular circumstances of some agreement or practice by the Commissioner and by the Tribunal. I would like to refer to what was said by Sir Garfield Barwick in his statement read by Mr Freeth in the House of Representatives on 6th December 1962. The statement read: . . There should be a minimum use of the criminallaw. Whilst I have said that the ultimate touchstone of invalidity of a practice is its antipathy to the public interest, I do not think every breach of legislation in this field should brand the business man a criminal. No doubt there are some events in which there must be a criminal penalty for breach of the law, but this should not be the general consequence.
In fact, clause 36 will bring about the reverse effect. The business man is now to be branded as a criminal. Members of the Opposition and we on this side have associated with most of the business people of Australia, and although there are a few who do get up to undesirable practices, let me state that in the whole of my business experience I have found that most people are honest and endeavour to work within the framework of the law. But whatever Act we bring into this House, be assured that the aptitude of man is such that if a business man desires to take advantage of the law it is almost impossible to prepare an Act through which he cannot drive a horse and buggy. I dislike the amendments moved in the Senate. I regret that I did not have the time to fully go into these amendments, but they are objectionable to me and 1 trust that this House will not confirm them and, in fact, will delete them from the Act.
– The Restrictive Trade Practices Bill is an important piece of legislation. It is important not because of what it seeks to do but because of what it does not seek to do. The subject with which it deals is the restrictive trade practices which exist in the Australian business community today. I have asked myself why it is an important piece of legislation. I think its importance flows from the fact that it relates to one of the relatively few levers or devices that the Commonwealth Government has with which to influence the Australian business community. The Commonwealth Government has to exercise control over tariffs, taxation, social services and other matters. It also has to exercise control over restrictive trade practices.
A very important role is played in the Australian community by the big corporations. The decisions they make affect everyone. In many cases they make decisions which are more far-reaching and more important than the decisions of this House or of this Parliament. A course which the Broken Hill Pty Co. Ltd decides to follow with regard to its steel production is often more pervasive, influential and even destructive than anything this House may do. General Motors-Holden’s Pty Ltd can do the same thing. So can many corporations. It boils down to this: These corporations exercise power in much the same way asthis House exercises power or tries to exercise it. The difference, of course, is that when this House or this Parliament tries to exercise power it does so publicly. Our actions are scrutinised. The Press criticises us and our constituents write to us. We are influenced by what they say. We are ultimately responsible to them through the ballot box and so on. But the big corporations are not responsible to anyone for the decisions that they make. They are not responsible to anyone for decisions they make to institute price control or to divide up on industry. The decisions they make are made in board rooms behind closed doors. No-one can shine a torch in and say: ‘Why are you doing it? Is it in the interests of the shareholders or only of yourselves as private bureaucrats?’ Although a decision is made which conflicts with the interests of the Australian community no-one can question that decision because it is made in the interests of such things as maximising profit and providing security for the business. That is one reason why I regard any restrictive trade practices legislation as being of great importance.
The decision of a large corporation to put up prices could start a chain reaction. It could result in employee organisations replying in kind with the statement: ‘Prices have gone up. We will have to match those increases with a wage demand’. The decision by a trade union to put forward a wage demand could result in fears being expressed of the likelihood of industrial unrest. Government could then move in and use any industrial unrest for its own purposes. All these things flow back to the original decision taken by a body which is exercising great power in the community but which is not responsible to anyone. Those are some of the reasons why restrictive trade practices legislation is important to me.
I think it is well known and probably would be agreed to by everyone here that the Australian community is one of the most highly concentrated industrial and commercial communities in the world. This has been said by many people over many years, ft is comparable in many ways to the German community and even the Japanese and American communities. Yet we have had almost no experience of restrictive trade practices legislation. The Canadians and the Americans introduced this type of legislation back in the 1880s. The collective experience of those communities is enormous, but we have had almost no experience. A few months ago I saw an article in a journal which is put out by the American Chamber of Commerce and which was released through the American Embassy that made the very point that the Australian Government had had almost no experience in the field of restrictive trade practices legislation. Why has it had not had much experience? Because the Government does not really care.
The honourable member for Melbourne Ports (Mr Crean) spoke of the actions of the Government in kind and gentle terms, but I do nol feel inclined to be quite so kind and gentle. I am not angry with the Government, but how can f be kind to it for what it has done? The real explanation for why the Government has not done anything about trying to solve the restrictive trade practice problems which exist in the Australian community is either because it does not care or because the Government reflects the business and economic interests of the people who support it and those people do not want this action to be taken. We had the Australian Industries Preservation Acf. in force for a long while, but the provisions of that Act were limited, ft had great potential, but it had at least one fatal flaw which was not cured for a long while and when it was cured it was too late. Why was if too lats? Because the legal profession had ignored it for many years.
In about 1960, as a result of an increasing demand by economists, publicists, politicians, investors and other people who had a social conscience, the Australian Government began to think that it had to do something in the field of restrictive trade practices. The first mumblings about something having to be done were heard in about 1960. In about 1962 what are now referred to as the Barwick proposals were put forward. These proposals were prepared in an exhaustive manner by one of the best legal brains the country has produced - Sir Garfield Barwick, now Chief Justice of the High Court of Australia. At the time he produced his proposals he was a man who had already had a great deal of political, experience. His proposals were laid before the Australian community for examination, discussion and debate. As I recall it, they excited great attention and great, respect. However, they were much too hot for the Government to handle. For that reason the Government left them alone. But the Government could not get away from those proposals because they had already excited enough attention and the demands for their implementation were snowballing. In about the middle of 1965 the present Treasurer (Mr Snedden), who was then the Attorney-General, introduced what is in substance the Bill we are considering tonight, leaving aside for the moment the amendments which were made in the other place. That legislation was described at the time as a compromise, lt was a recognition by the Government that it could no longer put off doing something about this problem. But it was also a recognition by the Government that it would not do anything which would offend its supporters or backers. In other words, the Government said that it would not introduce legislation which had real teeth in it, and it did not.
The honourable member for Cunningham (Mr Connor) has pointed out that the legislation which was declared invalidin the concrete pipes case really had very little effect at all. The Government had abandoned the Australian Industries Preservation Act and it had- abandoned much of the Barwick proposals, lt ponded for a register which was secret but which produced very rapidly a list of examinable agreements - something like 13,000. As Mr Bannerman, the Commissioner of Trade Practices, had a limited staff at his disposal he was examining only a very small number of cases - something like 15 or perhaps 20 - annually. That type of examination would have gone on forever if the old scheme of things had continued. I am not saying that cases did not come to the attention of the Trade Practices Tribunal nor am I saying that some negotiations did not achieve a small measure of success, but by and large it was just a joke. Eventually the High Court came along and said that the old legislation was invalid for other reasons. Fortunately for the people of Australia it said that the Corporations power of the Commonwealth was far more extensive than had hitherto been thought.
The Government has now come along with this piece of holding legislation and has more or less said: ‘We will not at this stage use the great power which has been given to us. We will defer using it. It is a difficult and complex power’. The Government says that it is going to use this power eventually, but I have grave doubts as to its real intentions in this regard. I say that openly. Only time will tell what propositions the Government puts before the Parliament. To come to what the High Court said about the possibilities and potential open to this Commonwealth Government, the Government has introduced a holding
Bill limited to corporations, leaving aside the question of incidental power and things of that sort in the Constitution. This Bill in itself does nothing. It validates certain findings and certain orders of the Tribunal which was set up. 1 would like to come back and repeat for. consideration by honourable members some of the words that were used by the honourable member for Berowra (Mr Hughes) when he spoke in this House on 7th September. He, of course, has had as much experience in this field as anyone. He was at the relevant time the AttorneyGeneral. I understand that he is going out of politics. He was counsel in the case concerned. In drawing attention to the concrete pipes case on 7th September the honourable member stressed that it was a decision with momentous consequences for our future as a nation. He went on to say that this Government had been criticised for doing too little. He. said there was a danger of its becoming like the Liberals in the United Kingdom hack in the early years of the century, proceeding towards social . reform with - noisy mouths and mouse-like feet. That was a lovely expression. I can only hope, and certainly honourable members on this side of the House also hold this hope, that that, prognosis is not going to be borne out, because the whole history of this Government suggests that it is going to be borne out - proceeding towards, social reform with noisy mouths and mouse-like feet. I have never anywhere read or heard of any Government spokesman uttering any claim or any thought of what the Government has in mind about the problem of restrictive trade practices in the Austraiian community. We hear it from honourable members on this side. We hear from publicists and from writers in learned journals that this is a particular menace, this has to be watched or that this type of behaviour will produce this kind of result. But 1 have never heard or read of anyone, including the Minister representing the Attorney-General, saying that there is great social mischief in this community, that it requires attention, that we are going to do something about it. This has never been said at any stage as far as 1 am aware.
In the case of resale price maintenance it was left to the Australian Council of
Trade Unions to take the steps which it took in Melbourne with the acquisition of Bourke’s store to force the Government’s hand. If the Government tries to wriggle out from under with a sort of ex post fac’o explanation of what it did when it belatedly introduced that legislation I seriously suggest that not only will no-one else believe the Government but also that it should not believe itself, because its hand was forced. The Government had no choice in the matter, the criticisms come from outside. The Government never puts forward criticism in this area. It never puts forward any proposal for reform. T do not think it will put forward any on this occasion because in the second reading speech of the Minister representing the Attorney-General one will not find such a proposal.
The’ Minister talked about introducing strengthening legislation to take advantage of the power given by the decision in the concrete pipes ca&e, the extended power under the corporation section, section 51. But where is there any recognition that any problem exists? You will not find it anywhere. So why should we be optimistic about this? All that we can keep doing is to prod the Government and protest in the hope not that its conscience will in some way alter its future record, but that the Australian community will get the message in some way and realise that the record speaks for itself, that people should be judged on what they do, not on what they do not say while simply getting on the bandwaggon and trying to take advantage of the situation.
Australia has a very high degree of concentration of economic power. This power is not responsible to anyone. It is power that is exercised often against the interests of the Australian community. Anyone who has ever studied the problem knows this. In the United States volumes have been written about it in the works of Kefauver and many others. Yet we have to recognise that in 1971 this Government’s experience in this terribly important field is still in its infancy. It is a scandal, as the honourable member for Cunningham has said, that we should even have the situation that at this stage there is no law on restrictive trade practices. It is of no use blaming the High
Court. That section has been in the Constitution since 1900. At this stage we have no law on this subject. The Government has come along and said: ‘Here is a holding law and we will give you something more forceful soon.’ But there is no indication as to what it will be. This is true to the Government’s form.
One can only hope that when the Bill gets to that other place, the Senate, the thinking there will be the same as that which was expressed once before. One can only hope that some deal or some assurance has not been exchanged by the various interests affected in that other place. One can see it in this way: If those amendments that, went through in the Senate strengthen this Bill, here is the Government again seeking to emasculate it. Here is the Government again saying that in some way these amendments are inconsistent. How are they inconsistent with the Bill? The Government has a Bill which, was once dependent upon accepting transfers of power from the States and using the other powers in the Constitution but now it relies entirely on Commonwealth corporation power. Tn both cases it was unworkable in practice, lt has been introduced in the knowledge that it is unworkable in practice. The Government now has the nerve to come along and say: ‘We do not like these amendments made in the Senate. They will make it unworkable.’ They make it unworkable all right. They alter the style. Those amendments give to this unworkable Bill some teeth so that it is unworkable in the sense in which the Government wanted it, namely to do nothing.
– The honourable member for the Australian Capital Territory (Mr Enderby) should well know by now that the Government has not said that it finds the amendments unacceptable or that it will not accept them under any circumstances. The Government has made it quite clear that it will not accept these amendments in this form loosely drafted and ill-conceived and it will not accept them at this time. It may well be - I do not know; I am not responsible for it - that when the Government has concluded its deliberations on the amendments that should be made to the legislation to toughen it and tighten it, or to give it teeth, as has been said before, that these very words will be used. I hope - and I am speaking personally - that the very words in the amendments will not be used because I find that there are very great difficulties involved in interpreting what they mean. That point should be established at the outset, that the honourable member for the Australian Capital Territory is quite wrong when he maintains in all that baldness that the Government will not accept the amendments that have been inserted in the legislation in the Senate.
I think it is fairly clear that even at this late stage that the Opposition does not understand the purpose and nature of this piece of legislation. It is important and indeed vital because at the moment there is no restrictive trade legislation in Australia. Although it is vital for that reason it is only holding legislation. It is legislation that has been made necessary as a result of a decision of the High Court of Australia, and reference has already been made to that decision in the case of Strickland v. Rocla Concrete Pipes Ltd and others. I say that the Opposition does not understand the very nature of this legislation for 2 reasons: firstly, because of the amendments that were inserted into the legislation in the Senate and the manner in which those amendments were inserted - the illconcieved nature and the poor drafting of some of them; secondly, because of some of the speeches that have been made tonight. That point must be understood at the outset. It is a simple point. It is a clear point but it should be understood because it is a comprehension of that very basic point that honourable members would need to understand to decide how they should vote on this legislation.
It is holding legislation to fill a vacuum it created as a result of that High Court decision. The Government has given very clear undertakings on a number of occasions that it is going to introduce further restrictive trade legislation and much tougher legislation than has been on the statute books in the past. Let me without taking too long read a small extract of what the Attorney-General (Senator Greenwood) said in the Senate when he introduced this legislation in that place:
In my statement on 7th September 1971I said that the Government was committed to strengthening the legislation and that it proposed to follow the present holding Bill with a further Bill the purpose of which will be to strengthen the legislation.
I, referred to the considerable amount of work and attention that was being given to this objective and, in particular, to the consideration being given to the matter by an interdepartmental committee. I take the opportunity now to inform honourable senators that the Government has in the last few days received a report from that committee. The report covers a number of important and complex matters which deserve close consideration. The Government is proceeding to give these matters full and proper consideration. Honourable senators may be assured that the Government will proceed with this task as expeditiously as possible. The preparation of a Bill on such a complex and important matter may take some lime, but the Government proposes that, as soon as it is in a position to do so, it will inform the Parliament of the natureof the changes that it has decided to make to the legislation. The immediate and pressing need, however, is to restore to the statute book restrictive trade practices legislation that is constitutionally sound. That is the purpose of this Bill. I commend the Bill to the Senate.
From that short extract - perhaps not so short - of what the Attorney-General said in the Senate, it is fairly clear, I would have thought to anyone who gives a close study to the matter, what the basic purpose of this legislation is. It is holding legislation. The Government has given its clear undertaking that it will introduce further legislation when the very vast and wide ranging complexities and implications of the report of that interdepartmental committee have been considered.
I do not want to delay the House for very long, particularly in view of the pressure of legislation, but I want to refer very briefly to one other matter. The honourable member for Melbourne Ports (Mr Crean) in a very thoughtful speech, if I might say so, said to the House: ‘Now, the Government is not to be taken at its word when it says that it will introduce toughening legislation’. Indeed, I think the honourable member said that he took a very sceptical view of the Government’s pronouncements on this matter. First of all, on numerous occasions - I will refer to some of the occasions - the Government has given the specific undertaking that it will introduce such legislation. I could refer the honourable member, for a start, to the statement made by the Prime Minister (Mr
McMahon) on 4th September 1971 in which he gave that firm undertaking.
The Attorney-General himself has given undertakings in similar terms on 7th September 1971, 14th October 1971 and 9th November 1971. Indeed - I think that the honourable member for Melbourne Ports may have referred to this matter himself - in the debate in this chamber this afternoon the Prime Minister gave the same undertaking. I would have thought that it ill became the honourable member for Melbourne Ports or any other honourable member in this House to say that they regard the Government’s undertaking with scepticism when responsible Ministers of the Crown, and indeed the Prime Minister, have gone om of their way to give specific undertakings as to what course will be followed. But what must be understood clearly - the Attorney-General has made this clear in statements he has made - is that the work of this interdepartmental committee must be studied, because there arc wide ranging implications in the matters which that committee has brought to the Government’s attention.
Very briefly, (he second of the matters to which i wish to - refer, so far as the honourable member for Melbourne Ports is concerned, is that he said: . ‘If you are genuine, why are you objecting to the amendments that were made in the Senate?’ What I suggest to him is that he looks at the amendments which were inserted in the Senate, particularly new clause 35 and new clause 36, he will see that they do not fit very well into the legislation as it was before those amendments were, inserted. For instance, he will see the predatory pricing provision which was inserted in what. 1 think, is the new clause 35. If he looks at that and examines it in detail he will sec that it is an amendment which may well have some merit on some occasions but which, in the language which is used in the clause, is just so open to complexity’ and doubt that I frankly am not at all convinced that it should be introduced into the legislation at this time. - For instance, the clause provides that the offence of predatory price cutting is -permitted if the price cutting is persistent. There is do suggestion in the amendment as to what has to be proved or the minimum, if it is proved, that will mean that an offence has been committed. It does not say whether it is persistent price cutting with respect to one product or whether the offence can be committed if persistent price cutting is engaged in with respect to one product and then another product sold by the same person. It does not say whether ‘persistent’ means twice, 3 times or any other number of occasions. The whole thing is vague. Of course, a specific reason why the amendment does not fit very well into the legislation is that price cutting itself was not overlooked in the Bill before the amendments were made. What is now in clause 39 of the Bill covers price cutting, and it is a very difficult tack for anyone to look at the Bill as it was before it was amended, together with the amendments, to see exactly how the amendments will operate with the provision that was in clause 39 before the amendments were made.
These are complexities; these are involved matters. It is a matter of interpreting exactly what the words mean. After all, what is being established is a criminal offence with respect to both clause 35 and clause 36. These matters have to be clarified. They have to be precise for the reason that they are criminal offences, and for no other reason. As I say, these matters are complicated, they are involved, and I see no reason why the Government’s undertaking should not be accepted. I refer to the Government’s undertaking that now that the interdepartmental committee has brought in its report, what it has recommended or suggested to the Government will be examined in detail, and no doubt when this is done the Government will be in a position to introduce stronger and tougher restrictive trade practices legislation. For those reasons I support the legislation as it was before the amendments were inserted.
- Without going into detail on the various points made by those honourable members who have preceded me now in this debate, I think that I should deal with 3 matters which have been raised. Many speakers have referred to the first of these matters, which relates to the proposals which were prepared by Sir Garfield Barwick and stated to this House by the .Honourable Gordon Freeth in 1962. I think I should remind the House that these proposals were not put in the form of a draft Bill; they were put only in the form of generally stated proposals. But more than that, in laying them before the House on behalf of Sir Garfield Barwick Mr Freeth stated in the clearest terms that he was doing so in order to attract public debate, representations and constructive criticism on the proposals. A great number of representations were subsequently received. There was criticism and there was discussion.
At the time when the actual drafting of the Bill came forward Sir Garfield Barwick was no longer the Attorney-General responsible for the matter.The AttorneyGeneral of the day had to consider all the representations which had been invited by Sir Garfield Barwick. We do not know for sure what Sir Garfield Barwick would have done, but certainly if he had kept the promise made in the statement he would have amended his proposals, because this is what he said he would do if representations were made. In fact, these proposals were amended, and they appeared as a Bill in 1965. At the time when this Bill was introduced it was stated that we would keep closely under review the operation of the Restrictive Trade Practices Act. This has been done, and, as has been stated by the Attorney-General (Senator Greenwood) in another place, for the greater part of this year a committee has been carrying out a review of the provisions of the current Act with a view to suggesting amendments which would strengthen the Act. The Attorney-General has indicated that he was hoping to be able to make a statement this year. I know that he was aiming at being able to make one before the Parliament rose this month. Before I came into the chamber tonight I inquired to see whether it was likely that he would be able to keep to his timetable. He was. to some extent, doubtful although he now has a report in his hands. It is a matter requiring a good deal of consideration before he can put actual proposals of the Government before the Parliament, so it may be that it will be after the House has risen. However, the matter is well advanced and we propose that the existing Act, which was introduced in 1965 and which has been amended to some degree since, will be strengthened.
I will not repeat what I said previously about this Bill except to say that it is a holding operation to ensure that during the parliamentary recess there will be in force some restrictive trade practices legislation, that the Commissioner has authority to act, and the authority to hold documents which are in his registry and the power to move forward with the consideration of cases and, indeed, the power to proceed with a couple of cases that are now to go before the tribunal. With the qualification I made when I moved the second reading - I foreshadowed that I would be moving amendments during the Committee stages - I commend the Bill to the House.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 and 2 - by leave - taken together, and agreed to.
Clause 3 (Parts).
– I move:
That the clause be postponed.
I do so because this clause will be affected by certain amendments which I shall move in relation to clauses 35 and 36.
Clauses 4 to 33 - by leave - taken together, and agreed to.
Clause 34 (Secrecy).
– I move:
That the clause be postponed.
This clause will be the subject of later consideration.
Clauses 35 and 36 - by leave - taken together.
– I move:
That the clauses be deleted.
Clause 35 deals with what is called predatory pricing and was inserted in the Bill in the other place. It was not in the Bill as introduced by my colleague, the Attorney-General (Senator Greenwood) in that place but was inserted during the course of debate. It is in a form which constitutes it a criminal offence to engage in persistent price cutting at a loss with a certain objective in mind. For a number of reasons 1 oppose this clause being placed in this holding Bill. In the first place, it reverts to a type of legislation constituting certain acts criminal offences. This does not appear anywhere else in the frame of the legislation and it does not sit very readily in the Bill in that form. It is a form of legislation creating a criminal offence which places members of the business community in a situation where, because of the vague nature of the proposed offence, which involves a subjective element they do not know whether they have committed an offence until a jury finally has brought in a verdict and they find that perhaps for some years, although they may have been advised to the contrary, they have been committing an offence. Therefore, from the business community’s point of view, it is a type of clause which causes it considerable difficulty and confusion.
This provision also creates difficulties from the enforcement point of view because a criminal offence has to be prosed beyond reasonable doubt and, in order to do this, it is necessary to reach a much higher standard of proof than would have been necessary in, say, a case before the tribunal under the existing Act. The offence would have to be proved beyond reasonable doubt in circumstances where all the information and ali the knowledge is in the possession of the accused and he cannot be required to incriminate himself. Indeed, this was one of the reasons why the Australian Industries Preservation Act, which used the technique of making offences which looked fierce but which in fact were difficult to enforce, was not more effective than it was during its years of- operation. It would be a retrograde step to move back to that way of dealing with this particular matter.
Clause 36 deals with monopolisation and ) offer the same criticism because it uses the same device of making monopolisation a criminal offence. It defines monopolisation in a way which would make it extremely difficult to ascertain whether, if one was in business, one was committing ari offence. It even means acquiring power with the intention of preventing a person from entering or expanding a business, or using monopoly power in a manner that is unreasonable and detrimental to consumers of goods or services. There is involved an element of intention which must bc proved by a prosecutor. This again is difficult where all the information is in the hands of the accused. Yet, although it would be difficult to enforce, it would be extremely confusing to members of the business community who were seeking to know whether they were engaged in lawful conduct.
In addition, it would go into a BUI, the whole structure of the administration of which, involving the Commissioner, his power to call for agreements to be registered relating to monopolisation and his power of administering the Act in relation to monopolisation as a practice would be aimed in a different direction. This provision does not sit properly in the Bill. lt would need a substantial and complex re-arrangement of the Act to make this particular provision sit with the Act. Therefore, at this stage, the Government opposes the insertion of these 2 clauses in the Bill. However, my colleague, the Attorney-General, has indicated to me that the 2 matters are under consideration. 1 am aware of the reasons why the Opposition has been concerned with these particular areas of business operations. The area dealt with by these clauses is an area of concern in our review and while I cannot say what it is, if anything, that the Government will be doing in this area, 1 can say that it is a matter which is under consideration. Without these clauses we will have a holding Bill which will enable the trade practices legislation to operate and which will allow the Commissioner to have authority while we are not sitting until such time as we can consider amendments in perspective in a new Act.
– The Opposition opposes most vehemently any attempt by the Government to remove these clauses from the Bill. It does so for very cogent and valid reasons. The amendments were inserted in another place. They were inserted after due consideration and by a clear and decisive vote. That being so, we feel that, apart from any other consideration, as a matter of courtesy the clauses should be accepted by this chamber - the more so because, in fact, they are framed or couched in words which are almost identical with those in the original proposal put before the Parliament by Mr Freeth in 1962. We have yet- to hear any reason advanced by the Government why they should not now be included. There is no reason in logic, in commonsense or in law why they should not be included, and more particularly because of the comment that was made by Mr Commissioner Bannerman when the 8 per cent blanket impost which was placed by Broken Hill Pty Co. Ltd on its steel prices was referred to him for consideration. Mr Bannerman came to the conclusion - the valid conclusion as the Act then stood no doubt, and after due advice from competent counsel - that he could not rule that a monopoly was doing anything wrong in deciding to alter prices. That being so, and for no other reason, we oppose the Government’s proposal.
Let me put it on another basis and let me paraphrase the Minister’s words. Does he suggest that Broken Hill Pty Co. Ltd, the biggest company in Australia, does not know that it is a monopoly; that its directors or those responsible for its management, for its policyand the implementation of their policy, do not know when they are acting as a monopoly, when they are fixing prices when they know there is no opposition to them other than of the most minute kind from a handful of very small steel makers? Are we to believe that this argument, which is as the casuists say an argumentum ad ignorantiam, one based on the lack of knowledge of the listeners, is to be accepted? I think it is beneath contempt.
– You have misunderstood it. 1 am saying they know but that a prosecutor would have difficulty in proving it.
– He would have no difficulty whatever if they were under the same obligation - and they would be in respect of this amendment - to give the necessary information. It is a well known legal principle that in cases where there is difficulty in adducing proof the averment itself in an indictment is to be sufficient proof until the contrary is proved. In other words, in exceptional cases - the Minister knows as well asI do that they relate to prosecutions in such simple matters as breaches of the Liquor Act and certain breaches of the Pure Foods Act - the averment in the information is itself evidence of guilt until the contrary is proved.
To put it at its worst, the Government, if it wants to do it can do it, and where there is a will there is a way. In this matter the Government has gone even further because in relation to original section 4 (2.) it has gone to most minute pains to ensure that the Australian Industries Preservation Act has also been destroyed. There again there is the question of the definition of monopoly and in particular cases there is provision for the imposition of exemplary damages. Who better than the Minister for Foreign Affairs wouldknow what is the position in the United States of America today where the laws in this respect are punitive, and correctly so? In Australia the only commodity under universal price control is human labour, and penalties are imposed and imprisonment has been imposed on directors of major companies. Why should it not be so in appropriate cases after due proof? Let the Minister answer that if he can.
That Part IV (clauses 35and 36) be agreed to.
The Committee divided. (The Chairman - Mr P. E. Lucock)
Majority . . 7
Question so resolved in the negative.
Postponed clause 3.
This Act is divided into Parts, as follows:
Pan IV. - Predatory Pricing and Monopolisation (sections 35-36).
– I move:
This amendment is consequential upon the vote which we have just taken, the result of which had the effect of taking Part IV out of the Act.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 37 (Agreements between competitors containing certain restrictions).
Mr CONNOR (Cunningham) ©.56) - I move:
The reason ‘for moving this amendment is elementary. Here we have a remarkable dichotomy under an Act of Parliament. As I stressed earlier in the debate, the 1965 Act was an instrument of delay and frustration. This year as the result of a public outcry in respect of resale price maintenance the Government crumbled completely and accepted the principles that we had advocated some 6 years ago. These were that any examinable agreement should itself be illegal per se and that if a person thought that an agreement was a restrictive one and had then obeyed the precepts of the Act and registered it, automatically the onus would fall oh the person seeking to profit by the agreement to prove that it ought to be exempt. That being so, what answer in logic has the Government to our proposal? It has not any. We can expect that we will get nothing but insolence and complete silence on it. Mr Chairman, may we have a little quietness?
– -Order There is too much conversation in the chamber, lt is easier to hear the conversation of some honourable members who are holding private discussion than it is to hear the speech of the honourable member for Cunningham. .
– Thank you, Mr Lucock. If the matter is not of interest to them there is a proper place for them, and it is outside. If it does not come now, it will come at the next election.
– They are all on your side.
– They ought to be outside, anyhow.
– Order! Some honourable members will be outside in a moment.
– There was never a more Gilbertian situation than the present one in which the Government . has been prepared in respect of resale price maintenance to accept the principle that we advocate, yet is mulishly and obstinately stubborn in refusing to accept an amendment of this type. The Government has no answer whatever to it except to use the weight of its numbers. We do not trust this Government. We do not accept its undertakings. In the light of its delays and frustrations ;n so many areas and in its approach to the whole question of legislating against restrictive trade practices, its history renders it beyond credence and beyond trust. We want to know what its time-table is. But it has none. The amendment is a simple one. It is a valid one. It is completely viable in law. There is no reason why it could no; be and ought not to be accepted by the Government other than the Government’s stubborn determination at all costs to stick to its old principles of delay and frustration.
– The Government cannot accept this amendment. I should perhaps point out that the scheme of the Act as it stands at present in relation to examinable agreements with which this clause deals defines certain clauses of agreements which are made examinable. It requires them to be registered. It proceeds on the basis that some of these agreements may be against the public interest; others of them may not. Provision, therefore, is then made in the Act for the question whether an agreement is contrary to public interest to be determined in a proper fashion, that is, by the Commissioner. Should that not be satisfactory to the party, the party may go before the Tribunal. This amendment would make every examinable agreement unlawful. The words used are every examinable agreement shall be deemed unlawful’. It envisages that everything is against the public interest. Experience has shown that, in fact, this is not so. It is necessary to have this filtering procedure. Therefore, this amendment would cut across the principle of the present Act. It does not sit with it in its current form and it is not acceptable to the Government.
– We could not possibly accept the comments of the Minister in this matter. Does he suggest with his tongue in his cheek that with 13,276 of these agreements, of which a mere 15 have been dealt with in some form by the tribunal last year, the filtering process is one that is acceptable - that it is fair or reasonable? It is an insult to the collective intelligence of the Australian electorate to suggest that. What the devil does he mean? Does he seriously suggest that, with that rate of progress and with the Government having been openly admonished by its own Commissioner in the most cogent terms, we are to accept his explanation? I do not. What he suggests is beneath contempt.
– I think the honorable member for Cunningham (Mr Connor) has misunderstood the position completely. What I am saying is that the amendment, in the form in which he proposes it, simply will not fit into the current Act and for that reason it is totally unaceptable. As to the other matters he referred to in such tendentious terms. I will simply say his facts were not correct when he dealt with the rate of progress and the achievements of the Commissioner. Without going into the details of the position, again I state that insofar as the Act is not operating in a way that is satisfactory, it is precisely this that is under consideration by the Government.
The Attorney-General has received a report which he is considering. I do not want to cover the whole of that ground again.
That (he amendment (Mr Connor’s) be agreed to.
The Committee divided. (The Chairman - Mr P. E. Lucock)
Majority . . . . 5
Question so resolved in the negative.
Clause agreed to.
Clause 33. (1.) Practices of the following kinds are examinable practices for the purposes of this Act: -
– There have been circulated in my name 2 amendments to clause 38.I ask for leave for these to be taken together.
– Is leave granted? There being no objection, leave is granted.
In sub-clause (1.) (a) after ‘person’ insert ‘by any express or implied threat or promise’.
Omit paragraph (b).
The first of these amendments proposes to insert in sub-clause (l.)(a) of clause 38 some words which were deleted in the other place from the Bill that was introduced by my colleague the AttorneyGeneral (Senator Greenwood). The effect of deleting those words was to widen the types of conduct which might be made an examinable practice such as inducing people to deal on certain terms in the buying and selling of goods. The insertion of the words by my amendment tends to keep this clause directed to the type of conduct which it was desired to treat as being, in probability, contrary to the public interest and therefore examinable. The second amendment seeks to delete from subclause (1.) of clause 38 paragraph (b) which was inserted in the other place. It provides for discriminatory dealing by a seller to be made an examinable practice. It does so in terms which arc unacceptable to the Government.
If these amendments are accepted the Bill will retain as an examinable practice supply on discriminatory terms procured by a buyer who is exercising undue threats or promises in the nature of inducement but it will not deal with the case of a seller. It may be said that the paragraph (b) which has been inserted is a close cousin to the provision of the Robinson Patman Act in America which was inserted in 1936, and it is one which was considered fairly carefully at the time of the preparation of the original Bill. It will be considered again in this review. ButI should point out that in its present form, as it was inserted in the other place, it aims in the opposite direction to the Act. It prevents competition from taking place. It prevents bargaining over a very wide range. It prevents anyone from getting different terms from anyone else in a wide range of circumstances. One of the criticisms of the Robinson Patman Act has been that instead of facilitating competition it deadens competition. 1 think we should give very careful consideration to whether we should introduce such a paragraph as paragraph (b). At this stage, in relation to the holding Bill, the Government is opposed to it.
Amendments agreed to.
Clause, as amended, agreed to.
Clauses 39 to 41 - by leave - taken together, and agreed to.
– Is it the wish of the Committee to consider postponed clause 34 and clause 42 together? There being no objection, that course will be followed.
– I seek the leave of the Committee to move together the 2 amendments circulated in my name.
– Is leave granted? There being no objection, leave is granted.
– I move:
At the end of clause 34 add the following subclause: (6.) The references in this section to the Register shall be read as references to the special section of the Register established in accordance with section 40 of this Act, and nothing in this section applies in relation to information contained in the portion of the Register other than the special section of the Register.’.
At the end of clause 42 add the following subclauses: (3.) The regulation shall provide for the maintenance of a special section of the Register, and for the filing in that section of such particulars as the Commissioner may direct, being:
The purpose of the amendments is that for the first time the register of restrictive agreements will be open to the public for general examination, with the justifiable exception of secret processes of manufacture or other matters which could be detrimental to the parties associated with the agreement. It is a fair and reasonable provision. This Government is a secretive Government which deals in hole-in-corner methods. It is a Government which at all costs wants to push things through quietly in the dead of night if it can and while there is no broadcasting of the proceedings of the House. The Government is adopting precisely the same tactics as it adopted this afternoon in relation to the censure motion, because the Government has reason to be ashamed of and embarrassed by its attitude in relation to this Act and to the amendments which have been proposed. The amendments are completely logical and in line with the resale price maintenance part of the Act.
How is it possible for any person adversely affected or believing himself - or in the case of a company, itself - to be adversely affected by the operation of any restrictive agreement if he cannot have, on reasonable terms and after proper security measures have been taken, access to it to examine its contents? This Government is using shyster methods -I use the word advisedly - to conceal absolutely, to frustrate and to delay not merely unreasonably but for a length of time which can be projected into the far distant future. In every other country access is given, on proper terms, to registers of this type. Let the Minister for Foreign Affairs (Mr N. H. Bowen) give the House a single valid reason why access should not be given in these cases. Morethan that - it is rash to prophesy - I will be most agreeably surprised and so will a lot of people in Australia if before the next election the Government has produced any amending legislation to replace what it is ramming through the Committee here tonight.It will dive for cover. It will dive into its funk hole, and that suits it nicely. I repeat, to the embarrassment of the Minister and to the embarrassment of the Government, that the Act in its present form, excepting in the case of resale price maintenance, is a phoney.
– The Government is not prepared to accept these amendments. The honourable member for Cunningham (Mr Connor) should appreciate, perhaps if not all then some of the reasons for having secrecy in a register in which the scheme is to require registration of all agreements of certain types before deciding whether or not they are against the public interest and where their registration is required upon the assumption that some will and some will not be against the public interest. In the case of those agreements required to be registered by private organisations and which are not against the public interest there seems at least a substantial argument against permitting strangers to consider their material and having ready access to it. It follows that if the Commissioner, who has complete access to it, with a competent staff comes’ to the conclusion that it requires inquiry and forms an opinion that it is against the. public interest thenthese documents will be made public.
The proceedings before the Tribunal are public. Those agreements which the Commissioner has looked at and which he concludes are contrary to the public interest will not longer maintain their secrecy. The others will. It is true that there has been a clogging up. The fact that the register has not been public probably accounts for the success of it in comparison with the success of registers, say, in the early period of the English legislation. People have been prepared under the protection of this Act to come forward and freely register their agreements knowing that a responsible officer will be the one to scrutinise them. It is only if they are against the public interest that they will come under public scrutiny. The whole Act is something which we have undertaken to review. We did this when we introduced the original Act and this provision, along with the others, will be considered and notice will be taken of such of the remarks of the honourable member as were relevant and not just directed to political abuse.
– The Minister for Foreign Affairs (Mr N. H. Bowen) is again being evasive andI would like these remarks of mine to be noted. In the case of resale price maintenance it is competent for 3 distinct parties to institute proceedings for damages or for other penalties, namely, the Attorney-General, the Commissioner for Trade Practices or the person affected. What the Minister does not tell the House is that the person affected has no chance whatever until in the dim and distant future, if and when and as the Commissioner for Trade Practices finally gets around to the point of ultimately examining the legislation, there is no power of action for damages inherent in the person who suffers from the consequences of that registered contract. He is entitled to that right. It is a denial of natural justice, and I repeat that the Government should be ashamed for its obtuseness and its obmutescence.
That the amendments (Mr Connor’s) be agreed to.
The Committee divided. (The Chairman - Mr P. E. Lucock)
Majority .. .. 6
Remainder of Bill - by leave - taken as a whole.
to inform the. House of a single country where a commissioner or a man exercising similar jurisdiction has the right to call parties in, to literally cajole them, to reason with them for what appears on the face of it to be a breach of an Act of Parliament, to remonstrate with them and, if possible, to get them to see the error of their ways and, without the slightest penalty and without the slightest admonition, to allow them to continue wilh their restrictive practices by agreeing to abandon the agreement as between parties and doing it as individuals, again in secret collusion.
Mr N. H. BOWEN (Parramatta- Minister for Foreign Affairs) - The honourable member for Cunningham (Mr Connor) doubted whether a consultation procedure exists in similar legislation in other countries. The provision in the original legislation was copied from the American legislation. It has in fact proved successful in the sense that very often where there has been consultation there has been an amendment of the practice or of the agreement reached by the parties to bring it within the concept of public interest and it has therefore not been necessary to take the matter to the Trade Practices Tribunal. In some instances after this consultation procedure, which is less formal than an open court or tribunal type of procedure, the practice or the agreement has in fact been abandoned. It is only where the consultation procedure fails that the matter will go before the tribunal, with all the length of argument and evidence which is required in that respect. The Government will, however, in its review take note of what the honourable member has said.
– I wish to reply to the comments of the Minister. A process called jawboning, which has become established in the United States of America, which stems from the ideas of the late President John Kennedy, and which has been the customary practice for a considerable time, was used very effectively to deal with proposed increases in the cost of steel. As the Bill is drafted, this provision boils down to nothing more than an old boys’ club where old college chums can get together and where the Commissioner of Trade Practices can be put in the rather invidious position of having to remonstrate and expostulate with people and say: ‘Look here, old boy, if you really will not listen to reason I will have to prosecute you, which is the last thing I would want to do to an old college chum, but 1 have my riding instructions on the matter from the Government’. That is the provision as it stands and the Government is welcome to it because it smells.
I turn now to Part XIII of the Bill, which relates to overseas cargo shipping. Although it involves a matter of vital concern to members of the Australian Country Party they are rather conspicuous by their absence from the chamber at this stage of the proceedings. I should have thought that we would have heard something from them about this matter in view of the plight of the wool industry. It should be remembered that the operations of the shipping conferences affect the freight rates charged in respect of wool. Wool is the prestige cargo of shipping conferences. Anyone who doubts my word in that regard should examine the report of the commission of inquiry WhIch was held some 12 years ago in relation to this matter. Wool is the prestige and most valuable cargo. Consequently it has levied on it the highest freight rate. That freight rate is determined on the basis of awarding a premium to inefficiency because in the operations of a cartel, which is what a shipping conference is, the ultimate freight arrived at is designed to allow the most inefficient and uneconomic of the participant lines in that cartel to operate at a profit. A worse situation could not exist.
An over-supply of freighters exists throughout the world today. If this Government really had the interests of primary producers at heart it would be calling for and getting surprisingly competitive tenders from the major shipping proprietors of the world. In the port of Piraievs alone 250 ships were tied up some 3 months ago. Any one of them would have been capable of carrying our cargoes at a much lesser freight rate than is being imposed at present. If one adds to that the enormities of containerisation and the consequences of it in terms of a further inflation of shipping rates one has a situation which could not be worse insofar as its detriment to the rural industries, particularly the wool producers, is concerned. Again 1 ask: What has the Government done to curb the activities of the shipping conferences? Already agreements have been registered and there is a clerk and a registry, but the shippers have only given lip service to the legislation. They have complied with its bare minimum requirements. The effectiveness of the legislation is another matter. The provisions of the old Australian Industries Preservation Act would have been far more effective. But the Government has effectively killed it too as a part of the process of assassination which has been included within the ambit of this legislation and the Government’s activities.
Remainder of the Bill agreed to.
Bill reported with amendments; report - by leave - adopted.
Bill (on motion by Mr N. H. Bowen) - by leave - read a third time.
The following Bills were returned from the Senate without amendment:
Suites Grants (Universities) Bill (No. 2) 1971.
Australian Universities Commission Bill 1971.
States Grants (Advanced Education) Bill 1971.
Australian Commission on Advanced Education Bill 1971.
States Grants (Secondary Schools Libraries) Bill 1971.
Debate resumed from 25 November (vice page 3698), on motion by Mr Snedden:
That the Bill be now read a second time.
– The objective of the Appropriation Bill (No. 3) 1971-72 is to make provision for a loan of $30m to the Australian Wool Commission to allow it to continue to carry out its functions under the Australian Wool Commission Act. The principal objective of the Bill is to reduce the variation in auction prices which has been so pronounced in recent years in the hope that some stability will be reached in the wool industry and, at the same time, to stop wool being sold at disastrously low prices. The Commission bought a significant number of bales of wool during the 1970-71 season. In that period the Commission also resold some 73,000 bales of its stocks. At the commencement of the 1971-72 season stock in hand amounted to approximately 430,000 bales.
As we know, events have taken place this year which have had a drastic effect on the wool industry and. of course, on other sections of the economy. The most significant effect this year without doubt has been the decision of the United States Government with respect to economic conditions within the United States.I refer to the decision of the United States to impose a surcharge of 10 per cent on imports and the consequential effects on international currency.It is true that these events could not have been predicted. That decision has had a substantial effect on the quantity of wool that has been purchased and the enthusiasm of wool buyers. As a result the Wool Commission, operating within the provisions of the Australian Wool Commission Act, increased significantly its purchases of the wool offered for sale.
At the time when the Treasurer (Mr Snedden) made his second reading speech in introducing the Appropriation Bill (No. 3) the Commission’s stocks were in excess of 700,000 bales of wool, which is a very significant amount. Up to the present time the Commission has had a total working capital of$86m of which$22m is provided under parliamentary appropriation. An amount of$12m was provided in the last financial year and$10m has been provided in this financial year. Approximately$64m has been made available by the banking sector. We have been told that $30m will have to be repaid by April next year. This money is not an interest free loan; it is interest bearing loan. The Commission was faced with the problem that if it continued to purchase wool it would run out of money. It is obvious to most honourable members who have studied this legislation and who have studied the conditions of wool selling over the last 2 seasons that if the Commission failed to buy more wool because of a lack of money there would be a significant collapse in wool prices. In fact there would be a disaster because the buyers themselves would make certain that the price would drop further. Chaos would have been created in the industry if the Wool Commission had suddenly stopped buying wool.
The Government, I assume, had very little alternative. It had to accept the fact that the Wool Commission must continue to buy wool in the short term until more drastic marketing operations are introduced in terms of reform or simply not support the Commission any longer. As I have already said this would have been disastrous for the wool industry and it would have been a retrograde step in the Australian economy because although the wool growers are protected by the Wool (Deficiency Payments) Act the failure of the Commission to buy wool would have cost the taxpayers of Australia a lot more than the proposed $30m loan.It is quite certain that if the Commission had stopped buying the fall in the price of wool would have been significantly greater than $30m in total value. It would probably have been double that amount. The fall would have been accelerated by buyer resistance and other measures. Certainly one can say with some degree of certainty that the $30m is really an investment because it has saved the taxpayers’ money. Without this loan possibly $60m would be needed for deficiency payments which are grants and not loans. I think that the economic logic is there. Thatis certainly my analysis of it, anyhow.
The Treasurer’s warning is very interesting. As one who had a lot to do with Cabinet submissions, decisions and interpretations some years ago I would think from reading between the lines of the second reading speech of the Treasurer that this warning was in fact a Cabinet decision because it is not often that one sees in a second reading speech this type of wording which is pretty blunt both to the industry and to everybody else concerned. The Treasurer said:
Looking further ahead, to 1972-73 and subsequent years, it is clear that the level of support provided to the wool industry this year, through deficiency payments and the Commission’s reserve price operations, cannot be continued.
This is the Government speaking. I would think that that is probably what Cabinet decided, almost in that language. Certainly the Treasury takes the view that no industry can expect an open-ended commitment on the part of the Government and the taxpayer. The Australian Labor Party, too, takes that view. Our policy is quite clear on this matter. We would not agree to any stabilisation scheme which had an openended commitment. The Government has been able to get away with it. I say quite bluntly here that no Labor government would agree to an open-ended proposition whereby the sky was the limit: There hasto be a potential liability in terms of a restriction on the total amount of money available to the industry. Every (stabilisation scheme and every deficiency payments scheme up until the time of the (introduction of this one has had a total money liability or a liability which could be tied to a particular amount, whether it be determined by production as is the case with a quota system in some industries or whether it be a total monetary figure. For example, in regard to the wheat industry or the cotton industry you say to the grower: If you produce above this figure you do so at your own risk and the amount received per pound or whatever it is will be reduced’. It is clear that the Government is convinced that this is not a solution to the Wool Commission’s problems. The Labor Party was convinced in April last year. We were ridiculed in this House because we put forward schemes for the acquisition of wool and a statutory marketing authority but it is becoming very clear now that this is in fact what the industry wants.
This motion repeats what we have been saying since April last year. Time and again in this Parliament when we have put this matter to a vote the members of the Australian Country Party in particular have voted against it. I have little doubt that the Country Party will again follow that course of action and vote against this amendment despite the fact that this is what the wool industry wants. This is what the industry has told the Government that it wants. 1 have no doubt that some of the members of the Country Party who will get up to speak on this Bill will do exactly as they did in regard to the Bill which imposed the excise duty on wine; they will argue one way and vote the other. But we will wait to see what happens:
I want to say a few words in support of the amendment. I think it is fair to say. judging from experience in recent years, that the only way to explain the present organisation of the wool industry in Australia is to say that it is inefficient. There can be no double meaning to that word. Too many people in the wool industry today have lived on the old sayings and the old formulations of tradition, resisting the dynamic changes in economic policy both in Australia and overseas. For that reason. I say that the present system of producing wool after it is shorn, selling it and shipping it is archaic and that it has to be changed as quickly as possible. I want to explain why I believe that the Australian Wool Board and the Australian Wool Commission should be brought under the one head. First of all. the function of the International Wool Secretariat is to promote wool throughout the world. It has little powers other than that. Tie function of the Australian Wool Board is to promote wool in Australia and also throughout the world, lt has some powers with respect lo research and to investigations. We know that the Australian Wool Commission has powers with respect to the purchase and sate of the Australian clip. So I think it is important today that we should stop the present fragmentation of the wool industry. We have to bring it together under one strong, commercially viable, managerial head.
The first thing we have to do is to establish a statutory marketing authority for the wool industry along the lines which I have suggested and which the industry now wants. One might say that means that we should abolish the Wool Board and the Wool Commission. It does not mean it in that sense. It simply means that we have to encompass the functional responsibilities of those 2 bodies within a statutory marketing authority. I believe that this is a constructive policy and one which is needed. What is the opposition to a statutory marketing authority for the wool industry? It is that such a move is a socialistic measure, in the same way as all stabilisation schemes in Australia are socialistic measures. I suppose that the most socialistic enterprise in Australia today is the sugar industry. Probably not one decision can be taken in that industry unless it is supported, recommended or agreed to by either a State or a Federal government.
The principal opposition to a statutory marketing authority for the wool industry would come from Government supporters. I would presume that a large section of the Liberal Party would be opposed .to the orderly marketing of wool because, after all. it would mean the end of the broker. lt would mean also the end, to a large degree, of the selling functions of the large pastoral houses, lt would reduce, to a significant degree, the operations of the private banking sector in relation to the wool growers. I also know that the most powerful opposition would come from the vested interests - the wool brokers - and this. I believe, is a tragedy for Australia. 1 think that throughout Australia this is the section which must really be blamed for stopping the implementation of the reserve price scheme approximately 7 years ago. If that scheme had been introduced 7 years ago, at the present time we would have objective measurement to a far greater degree than wc have. We would have selling by sample, by core testing and so on. But unfortunately, because of the tremendous lobbying that occurred in the wool industry the weol grower, who, after all. is an ordinary person, was confused and hevoted against the proposal. That was :i tragedy for the wool industry. Rut, of course, it is do good looking backwards: one has to look forwards.
The other major opponent to the setting up of a statutory marketing authority in the wool industry would be the international wool buyers. We know from experience that Japan does not like this type of authority. Wc know the part that Japan played in the negotiations concerning the
International Sugar Agreement. Japan would like to see completely world free flowing commodities because it is a strong, almost unilateral single buyer and it can exert tremendous influence on the price of a commodity in a particular country. We have seen the way in which the Japanese operated in the early days with respect to the policy relating to the export of iron ore deposits from Western Australia. So we have opposition to the setting up of a statutory marketing authority for the wool industry. What I would like to hear tonight is what the members of the Country Party think of the proposal, because- this is important. If the members of the Country Party realise, as I am sure a lot of them do, the urgency for completely reorganising the marketing system for wool, then they have to put pressure on the rest of the Liberal-Country Party regime to get the scheme introduced into the Parliament and passed as soon as possible. As I have said previously, and I repeat it, one of the most depressing aspects of politics is to sec people going around the country stating what they believe and then refusing to back up those statements in the Parliament.
I am not one of those people who believe that a statutory marketing authority will significantly increase prices in the wool industry unless, of course, collusion can be proved. I make that qualification. If there is, in fact, significant collusion in wool buying today, that is to say, if the Japanese are significantly entering into gentlemen’s agreements, for example, then a statutory authority would have a chance to increase prices significantly. But just because there is a strong single buyer it does not necessarily mean that there will be a significant increase in the price of wool in the short term. The great benefits of a statutory marketing authority and of a strong single buyer are, first of all, significant cost savings, and I do not think that anybody will argue about that. There will be significant cost savings because one only has to look, for example, at the difference in the selling charges between the private sale of wool and the sale of wool through the auction system. There is a significant difference, and there will be a significant saving in costs with a single buyer simply because the operations of a large number of middle mcn will be eliminated.
I do not want to be optimistic and say that a statutory marketing authority for the wool industry will increase significantly the price of wool immediately because 1 do not think it will. I think it will do so in the long term, because in the long term I believe that a strong single marketing authority will bc able to negotiate bilateral agreements with the European Economic Community countries, with Japan, wilh China and with Russia- with the Communist bloc. 1 think that perhaps the future of wool lies in the export of textiles from Japan to the United States of America and the export of greasy wool from Australia to the United States of America. If we can sell wool in the same way as we sell other major commodities, particularly if the quality of wool can be improved and if we can sell by sample or by some other objective measurement, we will have a chance to increase significantly the price of wool and the return to wool growers.
Another important factor is that I believe there will be considerable savings in that a strong single buyer under an authority will be able to exercise a powerful voice with respect to shipping and also in the calling of lenders, as has been done in other industries with the same type of management. A better price may be obtained for items such as pesticides, materials and wool bales, to name but a few. We must recognise that there are dangers. We ail know that tremendous debts are owed to the private banks, the pastoral houses and the finance companies. What will these institutions do if a statutory marketing authority is implemented? They would be within their legal rights in applying greater pressure than they arc now doing and in foreclosing. This would cause panic selling of properties. This happened once in the depression years and the government of the day stepped in with special moratorium legislation in the Federal Parliament and with mirror legislation in the States, and immediately, through this specific legislation, it stopped these panic moves. This could also be done at this time, if it were thought that, say. a trustee company or somebody else was putting pressure on and demanding its pound of flesh immediately because such action could cause a race throughout the economy or a panic in selling properties. Machinery is available to stop any panic moves in the event of a statutory marketing authority being implemented.
I think it is also necessary for me to say a few words about synthetics, lt is no good our running away from the future. The great question is: What is the future of wool? Has it a future? Will it degenerate into an exclusive and high priced commodity in the same category and classification as the fillet steak from a beef carcass, for which there is only a limited demand, or will it again become viable in the future? Who knows? I believe that we must examine - the International Wool Secretariat in particular must give more attention to this - the marriage of wool with synthetics. If years ago we had recognised the efficiency of and the great threat presented by synthetics and had worked in with the chemical companies, instead of some people in the wool industry standing on their great high horse and continually preaching that there was nothing to surpass wool in the same manner as did the dairying industry in respect of its products, the wool industry would not be in anything like the mess it is in today. In other words, there must be a marriage of wool with synthetics; there must be an active liaison between the 2. Today, there is continuous active competition between them. I believe we should try to achieve an active liaison between and an active mixing of synthetics and wool. If this is not done it is certain that in real terms, the polyesters, the nylons and the acrylics will reduce more and more in price and this in turn, will reduce further the price of wool. In other words, the ceiling price for wool will be fixed by the price of synthetics.
– What do you mean by real terms?
– In money terms.
– Well, explain it.
– By real terms, I mean that the increases in costs of production and changes in money values must be taken into account. For example, in the real relationship between the price of acrylics and price of wool, the gap will get smaller and smaller and this will force down the price of wool further and further in relation to the price of acrylics. In other words, the price of acrylics could go up but that industry will become more and more efficient. When 1 look at the capital investment of the chemical companies in the world, their efficiency in management and their technology, it seems to me quite clear that they will become more and more efficient than the wool industry unless the wool industry changes its entire marketing pattern. That is only a supposition which I put forward; nobody knows what will happen. I put forward my belief that we have to marry wool with synthetics. 1 know this will be resisted by a large section of the wool industry which will still claim that we must keep wool away from synthetics.
– 1 do not think the grower would mind if he got a good return.
– Yes but there would still be the diehards who would stick to the old school of thought that wool must be kept away from synthetics and must compete with them. I think to do this would be a mistake. The last point I want to make concerns the location of wool. One of the great problems of the wool industry today is attracting new users of wool. Can honourable members imagine the International Wool Secretariat, for example, going to Boston, in the United States of America, and saying to a manufacturer: What about giving wool a try?’ The merchant who owns this business says: ‘All right, I will give it a try. Where do I get the wool?’ The IWS says: ‘Get hold of a wool buyer, go to Australia and pick up some wool.’ What does the merchant say? He says: ‘Like hell 1 will. 1 can ring Dupont down the road and get exactly what I want in synthetics. It will be delivered the next day’. The time it would lake to come to Australia, get the wool and finally produce a cloth would be at least 9 months. The merchant wants to have woo! on hand in a certain quantity in the warehouses so that he can ring up and order it. Thai is the way marketing is done today, not the archaic way we do it in Australia. The whole objective of the amendment again is to change drastically our method of marketing, to bring the wool to the buyer, the user or the manufacturer so that he will have it close to him. All these things have to be considered and I am sure they are being considered because the wool industry is certainly not sleeping on this matter. Something positive has to be done about this operation. I have moved the amendment and I hope that the Government will support it.
– Is the amendment seconded?
Grassby - I second the amendment and reserve my right to speak.
– I find myself substantially in agreement with what the honourable member for Dawson (Dr Patterson) has had to say. I will indicate to the House my position with respect to this amendment in a few minutes. There is a town called Charleville in the electorate of the honourable member for Maranoa (Mr Corbett) and outside Charleville there is a little river called the Langlo River. Many years ago there used to be a hotel at the crossing known as the Langlo Crossing Hotel. 1 once ran out of petrol about 60 miles from the Langlo crossing, but nothing very much attaches to that. It is not the first occasion on which I have run out of petrol. I mention the experience simply because I believe that it illustrates the position of the wool industry. When I ran out of petrol it was very easy to identify the problem and what had gone wrong. However, to solve the problem was another matter. This is precisely the case with the wool industry. It is very easy to identify the problem with the wool industry. What should be done is another issue.
For myself may I say that I believe that this Parliament for 20 years and this country for 20 years or more have been incredibly susceptible to 2 arguments. The first is that if anything goes wrong with the wool industry it will respond to what I describe as palliative treatment. The second susceptibility to which I believe we have fallen prey is that if a person suggest that there should be any measure of control or regulation of the wool industry people raise their hands in horror and say: ‘Oh, this is a dreadful infringement of the principle of free enterprise and nothing should be done*.
There is a very famous man who lived worked, wrote and spoke 2 centuries ago. I must confess to my sins; I still read him. He was Edmund Burke. Scores and scores of aphorisms can be picked out from Burke’ and most of them have a position in our society today. One of them of which 1 am very fond of reminding myself is this form of words of his: That which is not practicable is spurious. In other words, if you have a proposal and you cannot do anything with it, forget about it. That has been the great strength of the British people. They try something and if it does not work they dump it. There is a sense of folly in persisting with something that simply does not work. I hope I can speak wilh usual frankness tonight. I believe that the wool industry can no longer endure in its present state, and to persist with trying to run this great industry on the present basis is in my opinion false, spurious and quite without any practical application. 1 think that the country has to shed its cultivated sense of timidity with respect to the wool industry. It has to be prepared to be radical. I do not care whether what I am going to say will be called socialism or calathumpianism, but I am in favour of it. I believe that the wool industry has to embark on a quite radical approach to its problems. I believe , that the WOOl industry must be placed on a comparable basis with the sugar industry in Australia.
– And wheat.
– Hear my argument. By the time I sit down I may have persuaded my honourable friend to agree with me.
– There is hope yet.
– I have not given up hope even with you. It now brings me to explain my position with respect to the amendment. I would decline from supporting the amendment; I would decline from opposing the amendment. I do so on 2 grounds. I hope they are clear. I will strive to make them intelligible. Strange as it may seem, the first ground upon which I do not support the amendment moved by the honourable member for Dawson is that in my view it does not go far enough. That may shock the honourable member for Dawson.
– Be careful. I might move another one.
– I might be able to persuade you. The amendment does not go far enough and I will explain that further to the honourable member. The second ground on which I decline to support it is the announcement by the Government that Sir Richard Randall has been appointed to look at the problem having regard to the recent gathering or crescendo of events which have fallen upon the wool industry. They are the two grounds. As I expose my arguments I hope that the House will see the basis upon which they are founded. I agree completely with the honourable member for Dawson that there should be a statutory authority to acquire, appraise and dispose of the Australian wool clip. I go further - and this may jar some of my Country Party friends. I believe that there must also be woven into this form of con.trol of the wool industry a form of control of production.
– That was a good choice of words.
– Please do not hasten to condemn me until you have heard my argument on this count because I believe that there is a case to be made out.
– There is dead silence.
– I am glad to hear you say that. I go further than my friend, the honourable member for Dawson.I illustrate the grounds upon which I say this. I refer to the 1970 report of the Bureau of Agricultural Economics entitled ‘The Economics of Wool Classing’.
– You and I know about that.
– The Minister for the Interior and myself have subjected ourselves to the discipline of acquiring a knowledge.
– We are the only 2 qualified to speak on the subject.
– Are you not flattering? Fancy your saying that at 20 past 1 1 at night.
– Sir Richard Randall is qualified, too.
– Indeed, yes. I am delighted that Sir Richard was appointed because he brings to the job not only an immense experience of Treasury and government matters but also a knowledge of the shed, a knowledge of the industry and a knowledge of the people who work in the industry. I draw the attention of the H ouse to page 3 of the 1970 report, which states:
This reportpresents the results of a number of experiments designed to test the proposition that prices paid for sale lots of wool sold at auction are related to the standards of classing; that is for wools which are otherwise similar, the better the classing and higher the price.
That is the first proposition. If any person wants to make any woollen article - a blazer, suit material - he has a specification in mind. He places his order. The textile manufacturer sends the order to the mill. From the mill the order goes to the top maker. From the top maker the order goes to the wool buyer, and the wool buyer goes to the auction room, wherever it may be. The order may be for, shall we say, a 60s class of wool. The buyer has been instructed what to buy. Wool is remarkably susceptible to processing. Today one of the difficulties in the wool industry is to find in the first place that quality which the wool buyer wants and in the second place to find the necessary sweep of uniformity. I have seen sheep which give literally, 3, 4 or even 5 different classes or quality of wool in the one fleece. This is not good enough, and that is the reason why the wool industry will not survive on its present basis. This brings me back to the matter of quality. One does not get quality unless one is prepared to insist upon getting it. One cannot insist on quality unless one is prepared to cull and to cull severely. I have told some of my colleagues
– We are all away out of date.
– That is one of the views of the honourable gentleman. That may be so. This, in my submission, is quite true: One cannot get quality unless one insists upon getting it. Quality will not be achieved without insistence upon the right breeding stock. If people turning in a mixture of wool from sheep of any sort are tolerated quality will not be attained. That, in my view, is the argument with respect to control. It is of no avail for the honourable member for Hume (Mr Pettitt) or any other honourable member to say that quality does not count.
– I did not say that.
– Well, I do not know. The honourable gentleman murmered what I thought was some measure of disagreement with the proposition I was putting.
– No, he did not.
– He did not? I apologise. I hope that the honourable gentleman with bis sense of charity will forgive me. We will have a chat about it later over a cup of tea.
– I will bring the honourable member up to date.
– Well, anachronism is not always one sided. I take leave to remind the honourable gentleman that the last speech that I made in this House on wool was delivered on 21st May 1957 - before the honourable gentleman arrived here. I do not know whether there was any sense of prophecy in my words in those days, but I bad this to say:
The development of wool has not yet been brought to the stage where it commands all the various characteristics of synthetics. I am the first to agree that wool possesses many characteristics that synthetics, do not as yet command, but. that b no argument for saying that synthetics will never, at any time in the future, command the characteristics of wool. I refer again to the smugness and self-satisfaction that prevail in the minds of many people who are directly associated with the wool industry of this country, in that smugness and self-satisfaction there lies a very real degree of danger.
It is not that I think 1 have been vindicated, but I am concerned.
I hasten on to a few other issues in this great matter. I am concerned about the effect on the industry. If the wool industry goes to the wall, forget about decentralisation in this country because the most decentralised industry in Australia today is the wool industry. If one travelled through the whole of western Queensland and western New South Wales one would find centre after centre after centre which today are debilitated because the wool industry has been stricken. Until such time as the wool industry is put back on a viable basis and is given strength, character and encouragement, that will be the case.
On 15th November, the ‘Sydney Morning Herald’ by way of editorial observation - and I hope that nobody will accuse me of rebuking that great paper - spoke of the urban sprawl. In effect, the editorial said: ‘It is about rime that something was done about the urban sprawl’. A week later, on 22nd November, the same paper spoke about ‘lightening the burden’ on the taxpayer with respect to the wool industry. This goes to the nub of the problem. The taxpayers - those who live in the electorate of the honourable member for Mackellar (Mr Wentworth), who is taking such a passionate interest in what is going on-
Mir Wentworth - I am.
– These people, the honourable gentleman’s electors, will not be content to tolerate this state of affairs. They cannot be blamed. The 2 propositions taken together surely do argue the case for the need for a more, rational and more realistic approach to the wool industry.
The next point I refer to - of course I must do so very swiftly - is the matter of rural reconstruction. In my own State of Queensland - I remind the honourable member for Dawson of this - there has been something of an obsession for the last 20 or 30 years, particularly on the Labor side of politics, about slicing up every large sheep property.
– And turning each one into a desert.
– Turning them into desert and into small living areas -
– Do not knock closer settlement.
– Closer settlement, if I may say so, is one of the fetishes of the Labor Party. It is desperately ill suited to this country. Let me say what I have seen with respect to large properties. Take, for example-
– Please, hear me out. What does one see if one moves from Ilfracombe to Isisford, a distance of 60 miles or 70 miles? Years ago there were 3 properties that spanned that area. They were Wellshot Portland Downs and Isis Downs. They were great properties and they insisted on quality. Portland Downs shore over 100.000 sheep. Today it is cut up ito small living areas. When these small areas strike drought they cannot stand it but the large properties could because they moved stock around. 1 think that the Federal Government should use to the maximum the power that is in section 96 of the Constitution, that is the power dealing with grants, to say that there is to be rural reconstruction there must be a completely revolutionary approach to the problems of restoring some of these large properties so that there is the prospect of maintaining pastoral activity in difficult times. I regret to say that these difficult times have continued in Queensland for many years. The view is that the large properties can be cut up into small areas, and if there is a good season it is all very fine, but when a bad season comes it is a different matter. There have been 13 consecutive droughts in the centra] west of Queensland year after year after year. People cannot take it. The country cannot take it. The industry cannot take it. As a consequence thousands of people have left the area.
Finally, I want to refer to the point made, by the honourable member for Dawson, f think towards the end of his speech, in relation to blending wool with synthetics. For many years, regrettably, there has been what I would describe as a false sense of aristocracy by many of those associated with the wool industry about blending with synthetics. This year’s report of the Australian Wool Board is couched - I say this not offensively - in terms of extreme condescension in dealing with the volume of the Woolblend market. This refers to the mixing of wool with synthetics. It is to take place in autumn of 1972. Tt is big news, is it not? This should have been done some 20 years ago. I have said what T wanted to say. I have indicated, I hope to the satisfaction of my friends on the other side and on this side of the House, that I appreciate the significance of the amendment moved by the honourable member for Dawson. I excuse myself from supporting it on 2 grounds. Firstly I accept the good faith of the Government regarding [he committee appointed under the chairmanship of Sir Richard Randall and, secondly, in my view, until that report is made available by Sir Richard I do not think the amendment goes far enough. But as one who has given I suppose the best years of his life to supporting the doctrine of free enterprise, I may say that there does come a time when, in the words of Burke, that which is not practicable is spurious. As far as 1 am concerned the wool industry today can no longer survive and will no longer survive if it persists in believing that it can be anchored to views and attitudes which may have had some relevance 30 or 40 years ago but which today are no longer valid.
– I rise to support the amendment that I have seconded. It is designed to bring in a single statutory authority to acquire, appraise and market the entire wool clip as a matter of urgency. I have listened with tremendous interest to the speech of the honourable member for Moreton (Mr Killen). If I summarise incorrectly the points he made I hope he will correct me. I did understand him to say that the wool industry can no longer endure in its present state and that the time for palliatives is over. In fact, he made a call for radical solutions from his own background and knowledge of the industry. I appreciate his honesty and I appreciate his statement that in his conscience he could not support our amendment because it is not quite radical enough. That may well be, but I noted also that be would not oppose it, and I think that at least is a step forward. I was very interested to see the sort of reception that that speech of some courage and perception received from the honourable members in the corner. The only reception it got was from a distinguished backwoodsman who queried what the honourable member was saying.
There is no doubt at all in my mind that the wool handling and marketing situation in Australia has indeed assumed the proportions of a national scandal. We he?rd perhaps a prophecy - and I think a valid one - from the honourable member for Moreton, made in 1957. Just 3 years after that, another distinguished member of government, the present Minister-in-Charge of Rural Reconstruction in New South Wales, Mr Thomas Lewis, also assumed the role of prophet. He said so in a burst of modesty. In November 1960 in tha New South Wales Parliament, when referring to the Government of that time, he said this:
If it persists in bringing the rental up to 5 per cent -
He was talking about closed settlement; I address that interpolation to the Minister for the Interior - - I prophesy, provided there is no great increase in wool values, and it will have to be of the order of 25 per cent in the price of wool over the next S to 10 years, that this closer settlement scheme will be a failure. I have no doubt about that.
In November 1960 his solution was to reduce the rentals by half. He has been asked many times since he assumed ministerial office in 1965 to do just that, and he has done exactly nothing. I instance that prophet in contrast to my friend, the honourable member for Moreton,’ who at least has had some thoughts since 1957 and maintained some consistency. The Minister-in-Charge of Rural Reconstruction in New South Wales has apparently repudiated everything he said’ II years ago. I repeat what I said: The wool handling and marketing situation in our country has assumed the proportions of a national scandal. We are the largest single wool producing nation in the world and we are the most primitive in our approach to handling and marketing. We have a rural depression which began when wool was compounded by the Government’s panic and stupidity in determining that wheat rationing should be introduced in the middle of a season. -
At least the Government’s approach to the wool industry has been consistent. Over the years it has set out to preserve the auction system against all attempts at its reform. Over the years it has insisted that all who are associated with the present archaic system of handling should be protected. When it introduced the Bill to establish the Australian Wool Commission there were only 2 guarantees: One was to protect the brokers and the other was to protect the private banking system. There was no suggestion that even minimum protection should be given to producers. The first priorities of the Government were, firstly, to the auction system and to all who derive their living and commissions from it; secondly, to the brokers: and thirdly to the banking sector! If there was any doubt about the Government’s priorities it should have been resolved when the wool subsidy proposal subsequently came before the House. The Government was happy to enter into an open ended commitment of $100m and more. It specifically laid down that this money should go not to the growers, not to the producers but to the brokers and the holders of the stock mortgages and to anyone who had a first mortgage on the stock and the- wool. In fact, the Act, provides that such a person shall have the money. This is spelt out in the Bill. The Government has acted time and again in regard to wool to protect not the producer or consumer but the moneylenders and the commission merchants. We know .that the rural debt exceeds $2,000m and that 90 per cent of the rural debt is held by banks, pastoral finance companies and insurance companies. In fact, 90 per cent of the. wool subsidy will go to those great financial institutions and the residue will go to the growers. It will be nothing more than a. political sop.
What is the attitude of the Opposition to this further commitment to the Australian Wool Commission? Let us not forget that this Commission is the Government’s answer to the wool crisis. This was the answer to demand across the countryside for a single national authority. It was a stage-managed answer by government to that demand, lt was designed to purchase rural electoral peace. But it could never have been honestly designed to bring rural prosperity and stability of wool prices. The Government should remember that it told the Opposition, the Parliament and the country that this was its answer, based on its experience and knowledge. So we cooperated. I remind members of the Government that we co-operated. We said: All right, if based on your knowledge, assessment and background in government this is your answer, we will give it a chance”.
We gave a speedy passage through the House to the. legislation to establish the Australian Wool Commission. But we also warned what would happen. Instead of reforming the charade of the’ auction system the Government entered into it and became one of the actors in it. Let us be clear that that is exactly what has happened. Instead of reforming the present outdated and primitive system the Government has joined it, using the taxpayers’ money. I might add that the Government has allowed it to fall through the gaps in the national floor boards while the grower and the consumer are exploited with fine, high impartiality. Despite our warning the Government did its duty to its supporters, not to the rural producers or the rural population but to the vested interests which hold 90 per cent of the rural debt.
Again we were not dogmatic. The Government is always claiming divine right after 20 years of power, so we said: ‘Your commitment is complete. We doubt you but we will give you a chance.’ The result is that the Government was either mistaken or has’ engaged in a deliberate exercise to service the debts of its friends and to sacrifice the industry. But whatever the motive, the Commission was the answer. What has happened? I remind the House that the facts are provided in an answer to a question I asked recently. In question No. 3843 I asked:
The Minister for Primary Industry, Mr Sinclair, who is not now with us. replied as follows:
The average greasy price for wool sold at auction from 16th November 1970 until the end of the 1970-71 wool selling season was 29.24 cents per lb.
That price is not up; it is down. So we can see that the Government’s wool pill has failed and this Bill provides more of the same medicine. This moneyis just as likely to go down between the cracks in the floor of the most primitive and outdated system Of commodity marketing in the world. I ask honourable members opposite to listen to this: I doubt that the grower will get 50c in $100 of this money. Everyone else will do well. Everyone who has a finger in the wool till will benefit. The brokers are guaranteed by the Government, as are the banks. The transport agencies, those who handle the wool so many times, will all be assured of their money. The way in which the Government has operated gives everyone associated with the industry an opportunity to participate in the benefits of the industry except the grower and the producer.
– Tell us your scheme.
– I appreciate that interjection very much. I seem to remember that the last time there was such an interjection it came in the early hours of the morning when the Bill to set up the Australian Wool Commission was introduced. We took the trouble to reply in detail. It took about 15 minutes to spell out chapter and verse of the scheme which is enshrined in the amendment we have now moved.I commend the honourable member who interjected to Hansard. A study of the way in which the Commission operates in the auction room and the restrictions placed upon it by the Government through legislation, shows that in fact the operations with those restrictions not only put a minimum price but a maximum price as well. Once the Commission’s ceiling is known, the whole trade accepts that as the ceiling. Because of the. limitation imposed by the Government, the Commission is putting a ceiling on wool. It is setting a minimum price, but it is also setting amaximum price. Not only is it doing that but it and the people who are involved in it are well known for the impatience they have displayed about the Government’s dictating to them what the price in negotiatedsales will be. They resent it. I am surprised that some of my friends who are interested in wool have not stood in their places and shown a little interest in that aspect.
It should be said that the only 2 categories of people not catered for in the Government’s approach to these matters are the producers and the consumers. An incredible situation has been reached in which the price paid to the producer does not really matter in the total cost ofthe product. If the grower gave his product for nothing it would make virtually no difference to the price of woollen goods. The price of a $90 suit would vary by only a couple of dollars if the grower gave his wool for nothing. In other words, what the grower receives could be doubled and the price of the finished article would hardly be affected. But what is the position with wool processing in our country? We are distinguished by the fact that we process only 6 per cent of the national clip. We are distinguished by the fact that we have fewer woollen goods available today than we have had for many years past. We are distinguished by the fact that we have spent $300m on wool promotion and we are still in difficulties and still buying the basic goods. We have not caught up with the basic facts of life . in regard to wool selling and promotion– -
Order! 1 think that the loud noises behind the honourable member are distracting him.
– They are not distracting. The honourable members are hurt, wounded and upset, and so they should be. I only hope that they find their consciences before too long. I have discussed this matter with my good friend, the honourable member for Robertson (Mr Cohen), who is engaged in the retail trade. As he has indicated to the House on previous occasions and as I know, these days fashions change. I say to the distinguished backwoodsmen on my left: Believe it or not, fashions change. These honourable members have not woken up to it. I am delighted to be part of a change in fashion,’ in scene and in politics in our country The honourable members on my left have not caught up with it.
In times past the honourable member who interjects so frequently would buy his dark green suit, his dark blue suit or his black suit in one year and again 5 years later. He would vary from dark blue to dark green to dark blue. It did not matter to the retailer, who kept such suits for him for 20 years. But these days amongst the younger generation - of which honourable members on my left know extremely little - there is a desire for a little bit of colour, life and vitality and a little bit of change. The retailer has to be prepared to meet that change. In many cases he increases his mark-up from 50 per cent to 100 per cent because he may have to dispose of the garments pretty quickly at the end of the season to stack up for the new season.
– At greatly reduced rates.
– At greatly reduced rates. The honourable member is quite right. The point I am making is that all these changes are taking place, but no fundamental change at all has taken place in the Government’s backwoods approach to wool, its processing and its marketing. We are still processing only 6 per cent of the national wool clip. We are still bound to the charade of an auction system to which we have been bound hand and foot for 20 years. The great alibi of the Government whenever we discuss wool is that nobody really wants to buy it. lt should be placed on record that in the 2 years when we had a price drop of 33 per cent the global utilisation of wool went up by 2.4 per cent and the global production by less than 0.5 per cent. So what are we talking about? Obviously we are talking about price.
The honourable member for Dawson (Dr Patterson) has issued warnings about price. He also has said, and the Opposition unanimously says, that there have to be savings so that the net return to the grower is worth while. What are these net returns likely to be? It has been estimated that within the system handling accounts for 10c per lb that there is 6c in external freights. How would these savings be brought about? The only way they can be brought about is through an integrated marketing system under a single statutory authority, and that is accepted by us. It has been for more than 1 year and every major industry organisation has supported our policy. They do not always say. ‘This is the ALP policy that we are now supporting”. But, never mind, the important thing is-
– You took it from them.
– The honourable member is awake again. I hope he stays with us. More than one year ago we adopted a policy which is now attracting support throughout Australia from every major organisation. It does not really matter to the minor voices on my left, some of whom will never survive, but this is being done. As a matter of fact, let us be quite blunt about this. As my friend, the honourable member for Robertson, reminds me, even a distinguished Tasmanian, Mr von Bibra, a member of the Australian Wool Board, says that wool production is no longer a way of life. He told growers that acquisition hud to be accepted. Where do honourable members opposite stand on this question? They should not hide behind their desks and their microphones for another 12 months.
– They will accept it eventually.
– Yes, they will. But what form of acquisition wili they accept? Will it be a form of acquisition which is in fact a monumental alibi so that everyone else will be serviced - so that the money lenders and the commission agents will all be serviced and the grower will be left exactly where he is today? This is the question. 1 want to say in summation of what I. am putting forward tonight that we have before the House at the present time an amendment which reflects our policy. It is an amendment which, in itself, is a summation of what we intend for the wool industry. It may well be that Government supporters will come to some sort of realisation and acceptance of what is needed.
– It is not the full moon yet.
– Perhaps, but I am convinced that (here are many Government supporters who know full well what is needed, l am just interested to know what applies the brakes to them because there are honourable members opposite of . perception and conscience and I wonder what prevents them from acting. A year ago we were not prevented from adopting a policy and pushing for it. We are putting it forward tonight clearly and distinctly. But I wonder what secret influence is exerted on the Government and its supporters individually and collectively which prevents them from supporting in this Parliament something which they say privately and in their electorates is eminently desirable.
– The Bill before the House will make an additional $30m available to the Australian Wool Commission which was set up by the Commonwealth Government some 12 months ago. Since that time, as the House well knows, a considerable sum of money has been made available to the Commission for the purpose of buying wool where this has been found necessary by the Commission. Other measures have been taken by the Government to assist the wool industry over its difficult period during the last 12 months when many things have happened-. To this Bill before the House the honourable member for Dawson (Dr Patterson), on behalf of the Australian Labor Party, has moved an amendment. Before moving on to that amendment I would say that the Act which was introduced into this House last year to enable the setting up of the Commission was introduced under the constitutional powers of the Commonwealth of Australia. The Commission was set up for the purpose of putting a buyer into the market, which is the only power in relation to this type of exercise which the Commonwealth had under the Constitution.
The Australian Labor Party tonight introduced an amendment to this Bill which would, if carried, have the effect of setting aside the $30m and therefore not making it available to the Australian Wool Commission. It also seeks to establish a marketing authority. It would be entirely unconstitutional for this Parliament to set up such an authority without complementary legislation being passed by the 6 Australian States. Under the Australian Constitution the States have powers relating to commodities produced within the States, and they have the sole power. The Commonwealth does not have power. in that regard. That is why, when legislating for schemes such as the Australian wool or wheat stabilisation plan, it has been necessary to have complementary legislataion passed by the States. Otherwise the Commonwealth legislation would be declared null and void by the High Court. This is the Australian Labor Party’s entire rural plan. It is an amendment which, in a nutshell, proposes to set up an appraisement scheme to market the entire wool clip. Those words alone would make it unconstitutional, if there were solely Commonwealth legislation.
In proposing this amendment the honourable member for Dawson, whom I cannot see in the chamber at the moment, but whom i do not think I am misquoting, said that this amendment was exactly what the wool industry was asking for at this time. The Australian Wool Industry Conference at its meeting on 25th and 26th November 1971 - only a few days ago - passed certain resolutions. I shall read out for the purposes of this debate exactly what was resolved unanimously by that body which represents the 2 major wool growing organisations in Australia. On the subject of a wool marketing authority the AWIC resolved:
That this Conference recommend to Govern ment:
That the functions of the AWC and AWB be now co-ordinated by amalgamation under one directorate to form an Australian Wool Marketing Authority to which is appointed a full-time chairman of proven ability. The directorate should be smaller in number than the 2 boards combined.
That the Authority be given the widest possible powers 1o co-ordinate and control at total marketing of the Australian clip.
That sale by objective measurement and sample combined with maximum transport, handling and marketing economy facilitated by such selling method be phased in from the opening of the 1972-73 wool selling season and that the various bodies working on transport., handling and marketing on the basis of objective measurement immediately be brought together to co-ordinate lnc logistics of the operation.
That this Conference agrees thai wmc form of acquisition may b« necesary to achieve the-e economies.
Th:u international co-ordination of wool marketing be sough!.
Thai it is implicit in all there proposals thai adequate consulation take place wilh industry organisations. 1 can well imagine the wool industry pulling forward those proposals as a broad outline on which to base the future of the Austraiian wool industry. But, of course, it is nesessary to write into many of these proposals the terms and conditions of any scheme; the price at which the product, if acquired, will be acquired; who will finance the scheme if the product is going to be acquired: and who will back it if it is going to bc acquired. The States would have to agree to any such scheme - otherwise it would be thrown out by the High Court. The Commonwealth Government would not introduce such legislation knowing full well that this would happen. I am pleased to note that the honourable member for Moreton (Mr Killen), who I understand has had legal training, is indicating to me by way of nodding his head that what I am saying is perfectly correct.
A lot of work has to be done prior to the bringing forward of legislation to acquire the total Australian wool clip if that is what the industry wants, and I believe it is. The assistance of the Government also has to be obtained. I am sure that the Government will assist the wool industry in every way possible to draw up the terms and conditions of such a scheme and that when that has been done it will endeavour to obtain the agreement of the States to the proposal at an Australian Agricultural Council meeting. But it is quite wrong to say that we will not support the amendment which has been proposed. We cannot support it because it is quite unconstitutional. lt was mentioned in an earlier debate this evening that the members of the Australian Country Party were not very concerned about freight rates. Wool which is sold under the present system of marketing wool - the auction system - does not belong to the wool grower at the point of shipping; it belongs to the person who has purchased it somewhere along the line. So the wool growers of Australia have no control whatsoever over this situation; it is completely out of the hands of the wool growers themselves. But it may be taken into consideration if certain things are done in relation to a total marketing scheme.
A matter which is not referred to tonight but which I have mentioned in this House previously and which is one of the most important issues to be considered is the future of the wool stores in this country. These stores, which have been owned by the wool growers themselves for 20 or 30 years, are free of debt. In my book they should have been turned over to the Australian Wool Commission immediately it was set up. Some honourable members have spoken about what happened 20 years ago. At that time tremendous pressure was brought to bear on certain authorities in the wool glowing areas of Australia to get rid of the stores, but these efforts were unsuccessful. We won that battle. But it was laid down at that time that immediately there was any change in the method of handling the Australian wool clip these wool stores should revert to the authority in charge of that method of handling. In my book that authority today is the Australian Wool Commission, if there is any change they should ‘bc passed on to the new authority which is handling the Australian wool clip. There would be no reason to use any other stores once these stores were made available to the Commission, which should be immediately the leases which are now held do terminate. That is one area which must be looked at because the storage of wool is an expensive operation, although it should not be. At present 286 stores of about an acre apiece belong to the wool growers of Australia and they are free of debt. An examination of the report of. the Australian Wool Board will show that the stores throughout Australia brought in between $2m and $3m in rental during the last 12 months, which indicates what these properties are worth.
As I have said, any marketing plan in the future, as in the past, needs finance of some sort. I should have thought that the right financing authority in this case would be the Reserve Bank of Australia, which is used by other authorities for this purpose. There is a section of the Reserve Bank from which money can be borrowed for this particular purpose. Several hundreds of millions of dollars are borrowed each year by wheat authorities and other authorities. If that source of finance is not available there could be some problems in obtaining finance, but J do not think that there will be any. With the confidence which I have in woolI have no doubt that there is money available around the world which will finance the Commission today. The wool industry is looking to the Commission to take control of the situation. I have no doubt that this money can be obtained from overseas.
I believe that the future prospects for wool are, in fact, quite good. The industry is in trouble at the moment. Looking at the real core of the trouble 1 see no danger in the future. 1 could be wrong. I ask honourable members to look at all other raw materials -I think this is the basic test of most things in this world today - which are being fed into factories in one form or another. I am referring not only to textiles but also to all other commodities. Honourable members will find that the wool which is being fed into the factories today is about the cheapest raw material in the world. The situation is rather fantastic.
As I think I have mentioned in this place before, 35 per cent of the cost of a finished steel product is represented by the raw material, steel. When one looks at the wool being fed into the factories today, one sees that it is very cheap. In 1961 the raw material in a man’s woollen suit represented 8 per cent of the cost of the finished product. Similarly in a lady’s frock the raw woo! represented 6 per cent of the total cost. In 1968 - this is a Japanese assessment - the raw material in a man’s woollen suit represented 5.7 per cent of the finished product. Today one can make one’s own calculation as to what the percentage is. It would be about 3 per cent or 4 per cent. No other commodity can come anywhere near that percentage today.
It is also interesting to note -I should have mentioned this matter before - what is happening in relation to the utilisation of the funds made available to the Commission today. We know that at the beginning of this wool buying season the Wool Commission was buying quite heavily. This was a pretty normal reaction from what we know about the wool industry, about trading around the world and about what the buyers, the blokes in the middle, wanted to do. But this buying has dropped substantially. There is very little wool in the pipeline. There is a little wool in Australia. At the wool sales held on 23rd November 1971 at both Melbourne and Newcastle some 32,752 bales were offered. It is interesting to note that the Commission bought in about 11.8 per cent. The quantity passed in was 3.2 per cent and the trade took 85 per cent. That is a much improved situation which indicates that the buyers from around the world are coming to the market place to buy the wool and the position is improving. Obviously if one takes out of the pipeline wool which would be speculators’ wool today at a cheap rate, that improves the situation.
Whatever happens, it is important that we do not give an inch. If we do the whole situation will collapse. The position must be kept going until such time as other marketing arrangements are established. It has been mentioned that the Commission has some 700.000 bales of wool. People mention that figure as if it were a tremendous amount of wool. Goodness gracious me, how much is that on the world scene or even in Australian figures? After the last war 3 producing countries held stocks amounting to 10 million bales. Everybody said: ‘You will never sell it’.
But of course we did. The price did not slop going up until the last bale was sold. The then authority was dismissed and the industry gol back on to this so-called free enterprise basis which has been mentioned tonight. The industry has been in trouble ever since. 1 shall refer to one other matter which the honourable member for Moreton (Mr Killen) mentioned. He likes private enterprise and free enterprise. We are trying to maintain free enterprise, the free enterprise of 100,000 wool growers and not of a few blokes elsewhere in the wool industry. But how can 100,000 wool growers sell fo a handful of buyers overseas? That is just not real life. A matter which has been of some concern to me is the Press statements made in regard to assistance for the wool industry. Let me refer to some of the comments in the Press after it was announced that a loan of $30m would be made available to the Wool Commission. A headline, appearing in the ‘Age’ reads: S30m loan props up wool’. I have a fair idea of what that paper has it) mind in regard to the words ‘props up’. A headline in the ‘Sydney Morning Herald’ reads: Government lends $30m more to prop wool’. A headline in the ‘Daily Telegraph’ reads: ‘Fresh $30m hand-out to buy in wool’, lt is not a hand-out. If the Government chooses to use this form of assistance then it is a Government decision to make available money on loan, on which interest is to be paid, as I understand the situation. .It is a good business proposition under the present circumstances to lend money to the Commission to buy in wool for resale at a later date. Wool is one of the best collaterals in the world and it always has been. The cost of storing wool is. very minute compared with other commodities of which there has been a surplus.
I would like to have had more time to refer to many other matters. 1 would like to refer to what many industries have been through in recent years. We should take note of this. For example, let me deal with the sugar industry. I have with me some articles in regard to this industry but I have not sufficient time in this debate to read them. A few years ago the sugar industry was lent Si 9m and the Press followed up with headlines On the problems of the sugar industry. An international agreement was reached and I believe that since that agreement the position of the sugar industry has improved considerably. That industry had its problems. The dairy industry went through a phase in which there was a surplus of butter throughout the world, mainly in the European Economic Community. I recall all the things that were written about what would happen to the dairy industry and what should be done. What is the position in this industry today? Butter, surpluses have disappeared. I think I am correct in saying that Australia is not able to fulfil its own commitments.
– About half of its export orders’.
– There we are. In the wheat industry a few years ago there was a terrific surplus of wheat and everybody was screaming out at the top of his voice about what would happen to the wheat industry, lt was a calamity. We took charge of the situation and the industry itself came forward with a plan. At various times the Government had made loans to that industry amounting to $400m, $600m and al one stage, I think, $700m. What is the position today in respect of this industry? The last reference which I saw in the Press was that one of the leading representatives in Australia was concerned that we would not have enough wheat. The wool industry today is in the same position as those industries were in many years ago. Let us stand up to the world situation and the home situation and do the right thing. This is the intention of this Bill.
Thursday, 2 December 1971
– in reply - The first thing I want to do is to thank those honourable members who I know are very keen to take part in this debate but who because of the lateness of the hour have decided to leave their remarks for a later day. One thing that is obvious from this debate is the fact that on both sides of this House there is a realisation of the importance of this industry. I am pleased to see that there is a recognition that this industry is vitally important to the economy of this country. It is important not only to many hundreds of wool growers but also to many large towns and cities located throughout the country. The Australian Labor Party has chosen to move an amendment to the motion for the second reading of the Bill. I shall deal first with that amendment. The amendment reads:
Whilst not declining to give the Bill a second reading the House is of the opinion that complementary legislation should be introduced without delay to establish a single statutory marketing authority to acquire, appraise and market the entire wool clip . . .
It goes on to say: . . and that this authority should encompass the functional responsibilities of the Australian Wool Board and the Australian Wool Commission’.
The first point that needs to be made is that the honourable member for Dawson (Dr Patterson) said that the Opposition has had this proposal in its policy since April last year. Is that so?
– April last year.
– This has been the policy of the Labor Party since April last year. I think we ought to be quite accurate about this becauseas I understand it the Labor Party’s policy on wool was made at the Federal Conference of 1971.
– That is what was agreed in Caucus.
– What the Labor Party agreed on in Caucus and what it agreed on at the Federal Conference apparently are 2 different things. For my money 1 would have to back what was said at the Federal Conference. I would like to read what was said at the Federal Conference of the Australian Labor Party in 1971. I do this so that we may be accurate about the Labor Party policy in respect of wool. One thing We do not want is for those who are engaged in the wool industry to be under a misunderstanding about the situation in relation to either Government policy or Australian Labor Party policy. 1 think that is a fair proposition and that everybody would agree with it. The 1971 Federal Conference stated:
Labor will legislate for a statutory wool mar keting authority’ to acquire and/ or market the Australian clip in the most efficient way.
There is no argument about that. This -statement is also part of the amendment moved on behalf of the Labor Party tonight. The Conference continued:
Reserve bank funds will be made available to finance the authority. Labor will reconstitute the AWIC and the Australian Wool Board–
The AWIC happens to be the Australian Wool Industry Conference which is completely and totally unrelated to the Australian Wool Commission. It is an entirely different body. So the second part of the amendment has not been accepted by the Federal Conference of the Labor Party. I repeat that the Conference stated:
Labor will reconstitute the AWIC and the Australian Wool Board on a democratically elected basis and have an investigation and evaluation of wool promotion and research.
That statement has nothing to do with the second part of the amendment. I just make that plain so that the wool growers of Australia will understand that what the Opposition is putting forward in the amendment does not have the support of the Federal Conference of the Labor Party..
We all know that the Federal Conference determines Labor Party policy. The honourable member for Dawson (Dr Patterson) told us on a television programme that whatever the Federal Conference says is the rule and the order of the day. There is nothing whatever that the honourable member or anyone else in the Labor Party Caucus can do about it. I want to make it perfectly clear that the amendment is not tied directly to Labor Party policy. This is important to the first part of my argument. The honourable member for Dawson said that this is what the wool industry wants. He said that this view has been demonstrated in the last couple of days. Again, to be accurate - and the honourable member for Canning (Mr Hallett) has already pointed this out - what is contained in the Opposition’s amendment is not related to what the Australian Wool Industry Conference carried in the last couple of days.I think that the wool growers of Australia deserve to know that this is not related.
If we look at what the AWIC agreed to we find that it stated that the wool industry has not said it wants an acquisition scheme at this stage. The resolution passed by the AWIC is that Conference agrees that some form of acquisition may be necessary. The Conference set up a committee to study what desirable changes ought to be made to the marketing system. So the two propositions are different. What the honourable member for Dawson claims to be an amendment which is suited to the wool industry is not what the wool industry wants at all. The honourable member for Moreton (Mr Killen) made an excellent contribution and he expressed some thoughts which I hold myself.
– He supported the amendment. .
– No, he did not support the amendment. Let us be accurate about this. He did not support the amendment because the Opposition did not go far enough. I want to make the comment that the International Wool Secretariat has moved into the Woolblend mark as was acknowledged by the honourable member for Moreton. The honourable member for Dawson also mentioned this matter. It is easy for us in this place to be critical of what the IWS has done or is doing. It is one of the easiest things in the world to be hypocritical. But I have had the benefit of having a look at some of the work that the IWS is doing in Germany and in the United States of America. Whatever may be said - whether about a lack of budget or anything else - I believe that the work of the Australian Wool Industry Conference over the years has made a marked impression on the sale of wool. We can argue as to whether it should have done something regarding blends years ago - and we all have our own opinions about that.
I want to deal with the speech made by the honourable member for Riverina (Mr Grassby). I waited for a long rime for him to say something, but after listening to him for 20 minutes I came to the conclusion that he said nothing. He comes into this chamber with synthetic socks, a synthetic suit, a synthetic shirt, a synthetic tie and even a synthetic smile on his face and he makes a speech in which he says absolutely nothing. But he did give a complete misrepresentation and a completely dishonest description of the paying out of the wool deficiency payment. He said that the money is going to the brokers and to the banks. Certainly the money is going through the brokers and through the banks. The arrangements that are made between every wool grower and his banker or his broker are private arrangements. Some of these arrangements in the industry have stood for 40 or 50 years. For the honourable member for Riverina to come into this chamber and totally misrepresent what is happening regarding the 6c a lb wool deficiency payment, and to imply that what is happening regarding that payment is different from what is happening regarding the payment of the 30c a lb for which a grower sells his wool, is a totally dishonest presentation of the facts.
– That is humbug.
– Order! The honourable member for Riverina will cease interjecting.
– He is saying thatI am dishonest.
– Order! The honourable member for Riverina will cease interjecting.
– Is it in order for the Minister to say that the honourable member for Riverina is dishonest? Then I. rise to a point of order. I do. not know whether you, Mr Deputy Speaker, will allow me to do so. Will you?
– If the honourable member for Sturt has a point of order to raise the Chair will allow him to raise it.
– Right. My point of order is that the Minister is. being very provocative.
– Order! There is no point of order..
– Why is that not a point of order?
– Order! The honourable member for Sturt will resume his seat immediately.
– I apologise if it was thought that I was being provocative. It was far from my wish to be seen to be provocative in any way. If I have said something to upset the honourable member for Sturt or any other honourable member, then I apologise. But I am concerned that the wool growers should understand exactly how the wool deficiency payment operates. The simple administrative arrangement that has been made is for the payment to go through the brokers or through the bankers - whoever the agents are. This payment is treated in absolutely the same way as the butter bounty which goes through the factory. The private arrangements that a dairy farmer makes with the factory about his account are arrangements that he has been making year after year. The same thing applies in the wool industry. In some cases the private arrangements, the very close arrangements, which wool growers have with their brokers have stood for generations and there is no misunderstanding in the minds of growers. They know full well that they are competent to make their own private arrangements with brokers, as they have been doing in some cases for decades. So I did not like the presentationof the honourable member for Riverina on this question. He also said in his speech, which lasted 20 minutes–
– You said that he said nothing.
– He said nothing of value. Nevertheless, he pointed out again what the Australian Labor Party will do, and I have made the point about what the Federal Conference of the Labor Party did on this issue. There is one weakness in the Labor Party’s policy which has never been mentioned either to the Parliament or to the wool growers, and I know it is an issue for which the honourable member for Dawson is very sympathetic, because his proposal on this issue was rejected by the Federal Conference. The wool growers do not know whether the Opposition will support the wool industry financially. They do not know the terms under which they will be supported or by what method they will be supported. At some future time I think it would be well for the industry to be told these thingsin definitive terms.
– What will the Government do?
– The Government has appointed a high level committee to study the problems of the industry. Industry representatives are working very closely with the Government on presenting the answers that they think are desirable and suitable for the industry, not only for next year but in the long term as well. For these reasons I think it would be presumptuous of us to accept the amendment. Therefore the Government rejects it.
That the words proposed to be omitted (Dr Patterson’s amendment) stand part of the question.
The House divided. (Mr Deputy Speaker - Mr P. E. Lucock)
Majority . . . . 3
Question so resolved in the affirmative.
Original question resolved in the affirmative.
Bill read a second time.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Nixon) read a third time.
House adjourned at 12.28 a.m. (Thursday)
The following answersto questions upon notice were circulated:
Education Needs: Independent Schools (Question No. 3654)
– The answer to the honourable member’s question is as follows:
The State Ministers for Education asked the Catholic and other non-government school authorities for details of their needs. As these details were returned to State Education Departments I am unable to say when they were received. Copies of these returns were later forwarded to my Department and as the information they contained was incomplete my Department wrote to all independent schools and Catholic education authorities on 16th December 1970 requesting more information. Replies from Catholic authorities in each state were received in my Department this yearon the following dates - from New South Wales on 1 3th April, Victoria on 7th May, Queensland on 19th April, South Australia on 23rd February, Western Australia on 16th March, Tasmania on 4th March, Australian Capital Territory, on 3rd March, Northern Territory on 21st June. As the other non-government schools were contacted individually and each school sent in its own return, the dates on which these returns were received ranged across a considerable period from January onwards.
By mid May, when returns were collated for analysis, 196 returns had been received covering 65 per cent of all non-government school enrolments. .
asked the Prime Minister, upon notice:
– The answer to the honourable member’s question is as follows:
Postal Services: Swan Electorate (Question No. 4442)
asked the Postmaster-
General, upon notice:
How many street receiver boxes for postal articles have been:
In what suburbs were they
– The answer to the honourable member’s question is as follows:
(a)Cannington, Como, Manning, Redcliffe, South Perth, Queenspark, Maniana, Bentley, Cloverdale,Rivervale, South Guildford
The 3letter receivers were removed from points at which little use was being made of them.
asked the Minister for Education and Science, upon notice:
– The answer to the honourable members question is as follows:
asked the Minister representing the Minister for Health, upon notice:
What arc the advantages and disadvantages to pensioners who are entitled to the benefits of the pensioner medical services and who continue to pay into hospital and medical benefits funds at
– The Minister for Health has provided the following answer to the honourable member’s question:
In relation to medical treatment under the Pensioner Medical Service, eligible pensioners and their dependants receive general practitioner surgery consultation andhome visits without charge. Most general practitioners participate in these arrangements. It is also customary for pensioners and their dependants to receive medical services without charge during any period of treatment in public hospitals, and specialists’ services are usually, available to them without charge through public hospitals. It should therefore be unnecessary for an eligible pensioner to obtain medical benefits insurance unless, as a matter of personal choice, he elects to seek treatment from one of the few general practitioners who do not participate in the Pensioner Medical Service or from a private specialist.
As regards hospital treatment, public hospitals in all States provide public ward treatment free of charge for eligible pensioners and their dependants. The Commonwealth pays a benefit of $5 per day to the hospital towards the cost of this treatment. It should therefore be unnecessary for an eligible pensioner to have hospital benefits insurance unless he desires to seek accommodation in a private hospital or in an intermediate or private ward of a public hospital. However, if by his own choice, a pensioner is accommodated in a private hospital or in the intermediate or private ward of a public hospital, the attending doctor will generally charge fees for any medical treatment, consequently, if a pensioner elects to obtain one of these levels of hospital accommodation, it is advisable that he also take out medical benefits insurance. In this case, the pensioner would be on the same basis of benefit entitlements as any other citizen.
Television: Cigarette Advertising (Question No. 4545)
asked the Postmaster-
General, upon notice:
– The answer to the honourable member’s question is as follows:
Education: Student Enrolment (Question No. 4573)
asked the Minister for
Education and Science, upon notice:
How does the ratio between student enrolment in private schools and public schools in the Australian Capital Territory compare with the ratio in each of the States and in the Northern Territory.
– The answer to the honourable member’s question is as follows:
I draw the honourable member’s attention to the publication of the Commonwealth Bureau of Census and Statistics entitled ‘Schools 1970’. Table 16 of this bulletin gives details of pupils by category of schools by States and Commonwealth Territories for the years 1966 to 1970.
Armed Forces: Pay Increases (Question No. 4627)
asked the Minister for
Defence, upon notice:
Will the salary increases recommended by the Kerr Committee for other ranks be paid in November 1971.
– The answer to the honourable member’s question is as follows:
Royal Australian Air Force: Hawker Siddeley 1182 (Question No. 4628)
Mi* Barnard asked the Minister representing the Minister for Air, upon notice:
Can’ he say whether the Royal Air Force has chosen the Hawker Siddeley 11-82 to replace its present jet trainer
Has the Royal Australian Air Force agreed to purchase as its replacement trainer the same aircraft as chosen by RAF.
Has Hawker Siddeley agreed that Australia can have share in the overall design and production of this aircraft if it places a firm order at an early stage
If so, will the Minister take immediate steps to ensure Australian participation in the production of the Hawker Siddeley 1182
– The Minister for Air has provided the following answer to the honourable member’s question:
asked the Postmaster-General, upon notice:
Were comprehensive surveys carried out by his Department of the facilities, growth potential, educational institutions and relative advantages of Kadina and Whyalla before the decision was taken to transfer certain post office activities from Whyalla to Kadina.
– The answer to the honourable member’s question is as follows:
Yes. In addition, however, the survey necessarily took into account the technical advantages lo be gained from the fact thai a main telecommunications switching centre is located at Kadina. The relative merits of the initially nominated and possible alternative centres for Area Headquarters are to be personally studied by the New Area Managers immediately after they have taken up duty, probably by about mid- 1972. lt is then expected thai a final selection of the centres to become Area Headquarters will be mads either late in 1972 or early in 1973
I would also refer the honourable member to the statement I made in the House of Representatives on 26th October 1971 regarding an important change lo the original scheme outlined in my previous statement in the House on 16th September last. This change will very substantially reduce the possibility that a centre not chosen as the Area Management Headquarters would be adversely affected to any great extent
asked the Minister-in-Charge of Tourist Activities, upon notice:
– The answer to the honourable member’s question is as follows:
Official statistics do not show the information in the form requested. Details of cruise passengers are. included in the tables below which have been compiled from statistics published by the Commonwealth Statistician.
The numbers of direct ‘transit passengers visiting Australia by sea, including those on regular ships’ voyages as well as passengers on cruise from overseas were as follows -
asked the Minister for Education and Science, upon notice:
Since he was able to table the section of the Nationwide Survey of Educational Needs relating to the Australian Capital Territory on 5th October 1971, why has he not yet tabled the section relating to the Northern Territory (Hansard, 2nd November 1971. page 2879)
– The answer to the honourable member’s question is as follows:
The document which I tabled on 5th October 1971 contained sections relating to the Survey conducted by the Department of Education and Science of theEducational Needs of both the Australian Capital Territory and the Northern Territory. The main section relating to the Northern Territory commences at page 10 of that document.
asked the Minister for the Navy, upon notice:
– The following information is provided to the honourable member’s question:
The Indian Ocean is under surveillance by Allied services and the significance of the amount of traffic in this area is kept under constant review by the appropriate Australian Authorities. It would not be in the national interest to discuss further the size and nature of these operations.
asked the Minister representing the Attorney-General, upon notice:
– The AttorneyGeneral has supplied the following answer to the honourable member’s question:
asked the Minister for Immigration, upon notice:
What methods does his Department usetokeep under surveillance the health of immigrants after their arrival in Australia.
– The answer to the honourable member’s question is as follows:
The relevant legislation (Migration Act Section 16 (1) (c) and Regulation 26 under that Act) provides for the control of entry to Australia of people who suffer from specific medical disabilities. Refusal of entry is not mandatory, however, and discretion is exercised on the basis of a number of factors including risks to public health, the probability of the person’ concerned becoming a charge on public funds and the capacity of the person concerned to integrate into the community. Medical disqualifications are weighed against family reunion and other humanitation considerations. Applicants for assisted passages are requiredto meet even more exacting criteria, including higher physical and medical standards, but generally the consequences are that migrants on arrival are free of disabilities which would make them unemployable or lead to such deterioration of health as would require prolonged institutional care or medical attention.
Normally therefore there are no special medical checks required or imposed on migrants after arrival in Australia. Any minor conditions from which they suffer, or disabilities which are contracted after arrival, would be treated through the ordinary medical facilities available to Australian citizens.
Migrants who have tuberculosis which is healed or has been effectively treated are an exception to the statement above. Tuberculosis is a ubiquitous disease with a tendancy to relapse after successful recovery from the initial infection. The Commonwealth. Department of Health refers details of such cases to State Directors of Tuberculosis for action. This affords opportunity to reinforce immunity by appropriate methods in members of a sponsoring family, where this is considered necessary. The State Directors also are sent the relevant medical reports and X-rays’ of such migrants who are kept under surveillance for a period determined by the Directors.
In addition to these measures, under State legislation all migrants are required to undergo chest X-ray within one month of arrival in Australia unless this condition is waived by the State Director of Tuberculosis.
Migrant Emergency Fund (Question No. 4604)
asked the Minister for
Immigration, upon notice:
– The answer to the honourable member’s question is as follows:
asked the PostmasterGeneral, upon notice:
– The answer to the honourable member’s question is as follows:
The ABC determines fees paid having regard to its assessment of the value of the particular contribution and the expertise of the person interviewed. It regards this information as confidential and believes its publication could prove embarrassing to the ABC and the people concerned.
Cite as: Australia, House of Representatives, Debates, 1 December 1971, viewed 22 October 2017, <http://historichansard.net/hofreps/1971/19711201_reps_27_hor75/>.