28th Parliament · 1st Session
Mr SPEAKER (Hon. J. F. Cope) took the chair at 10 a.m., and read prayers.
– Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers:
To the Honourable the Speaker and members of the House of Representatives in Parliament assembled:
The humble petition of undersigned citizens of Australia respectfully showeth:
That the proposed ‘free’ national health scheme is not free atall and will cost many citizens more, particularly single people and working wives.
That the proposed scheme is in fact a plan for nationalisation of health services which will lead to impersonafised and mediocre standards of medical care, the creation of a huge new bureaucracy, and will limit the citizen’s freedom of choice.
That the present health scheme can be amended to overcome existing deficiencies, and that the proposed scheme is totally unnecessary.
Your petitioners therefore humbly pray that the Government will take no measures to interfere with the basic principles of the existing health scheme which functions efficiently and economically.
And your petitioners, as in duty bound will ever pray. by Mr Anthony, Mr Cooke, Mr Drury, Mr Kelly and Mr Ruddock.
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 showeth:
That they oppose the Australian Health Insurance program and any National Health Scheme;
That they wish to retain the right to choose their own medical care by selecting a General Practitioner, Specialist or any other medical classification of their own choice under the present conditions in private consulting rooms and also the right to choose an intermediate ward or private hospital of their own choice.
Your petitioners therefore humbly pray that the Government will take no measure to interfere with the existing health scheme.
And your petitioners, as in duty bound, will ever pray. by Mr Adermann, Mr Bonnett, Mr Donald Cameron, Mr Corbett, Mr Katter and Mr Eric Robinson.
To the Honourable the Speaker and members of the House of Representatives in Parliament assembled:
The humble petition of undersigned citizens of Australia respectfully showeth:
That the proposed ‘free’ national health scheme is not free at all and will cost four out of five Australians more than the present scheme.
That the proposed scheme is discriminatory and a further erosion of the civil liberties of Australian citizens, particularly working wives and single persons.
That the proposed scheme is in fact a plan for nationalised medicine which will lead to gross waste and inefficiencies in medical services and will ultimately remove an individual’s right to choose his/her own doctor.
Your petitioners therefore humbly pray that the Government will take no measures to interferewith the basic principles of the existing health scheme which functions efficiently and economically.
And your petitioners, as in duty bound will ever pray. by Mr Killen, Mr McLeay, Mr McVeigh and Mr Wilson.
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 showeth:
That the undersigned men and women of Australia believe in a Christian way of life; and that no democracy can thrive unless its citizens are responsible and law abiding.
Your petitioners therefore humbly pray that the members in Parliament assembled will see that the powerful communicator, television, is used to build into the nation those qualities of character which make a democracy work - integrity, teamwork and a sense of purpose by serving, and that television be used to bring faith in God to the heart of the family and national life.
And your petitioners, as in duty bound, will ever pray. by Mr Sinclair, Mr Martin, Mr Morris, Mr O’Keefe, Mr Ruddock and Mr Turner.
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 showeth:
Your petitioners therefore humbly pray that the members in Parliament assembled will move to immeditaely revoke all whaling licences issued by the Australian Government and to reimpose a total ban on the importation of all whale products.
And your petitioners, as in duty bound, will ever pray. by Mr Kerin.
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 showeth:
That there are many people in Australia who still prefer ‘God Save The Queen’ as the National Anthem in preference to the alternatives that have been suggested.
Your petitioners therefore humbly pray that the House of Representatives will urge the Government to include ‘God Save The Queen’ in any referendum or poll held for the purpose of deciding the future of a national anthem.
And your petitioners, as in duty bound, will ever pray. by Mr King.
– I address a question to the Minister for Minerals and Energy and I refer to a statement on natural gas by the honourable gentleman in this House on 16 October when he said:
We plan a major refinery at Dampier to strip the liquids from natural gas and in turn, from the liquids, to strip ethane . . .
In the same statement, the Minister also said:
I plan also for the petro-chemical plant to utilise the salt harvests of the Dampier area to convert into caustic soda . . .
I refer the Minister particularly to his statement on plans he has for a major refinery at Dampier. I ask the Minister: Is he aware of proceedings before Senate Estimates Committee F on 12 November and 20 November at which officers of his Department and Senator Willesee revealed that the Department has no plans - I repeat, no plans - for a refinery at Dampier, nor are any plans for such a refinery being formulated by the Department? Will the Minister confirm this to be the fact? Is the refinery just a fancy idea which the Minister carries around in his head?
– The proposal is no figment of my imagination. As a matter of fact, a very substantial proposal has been advanced by the Kanematsu-Gosho organisation on precisely this project. The details of it have been closely examined. It is not an acceptable project based on imported Arabian crude at everescalating world prices, but the same concept will be applied and implemented by the Australian national government at the right time, integrated with the full program for the development of the resources of the north west shelf.
– My question is addressed to the Minister for Immigration. Is it a fact that a migrant smuggling racket has been uncovered in connection with Colombian migrants? If so, is it further a fact that a number of unfortunate Colombians who have been the victims of this racket are at present liable to deportation from Australia? What steps have been taken to end the racket? What will be the fate of the victims? Will the Minister exercise compassion in considering their cases?
– In recent months a number of rackets have been uncovered by the officers of the Department of Immigration which have involved bringing people to this country in circumstances which are clear exploitation of migrants. Four locations are involved. The honourable member mentioned Columbia. It is true that something approaching twenty, from memory, Columbians, have come to Australia in circumstances which indicate that a racket was perpetrated in regard to their arrival here. The whole of that particular matter is under investigation at the present time. I have had representations from the Consul-General for Colombia who has entered a plea on behalf of the people concerned. I might add that I think that all members of the Parliament would have deep sympathy for the people who were the victims and who are here at the present time, unfortunately illegally. The racket did not involve any Australian officials. There is no Australian representation in Colombia, and matters there are handled by another Embassy on our behalf. We have taken quick steps to isolate the abuses in Colombia and to try to end the racket there. I am considering what further steps might be taken in Colombia to ensure that Australian procedures are recognised and that the people are protected. As for the migrants who have arrived, I will take into account the honourable member’s plea for compassion as far as they are concerned, and when we are in a position to make a determination I will let the honourable member know.
– My question is directed to the Minister for Defence. Is it a fact that the statement as originally prepared for the Minister and presented to this House on 20 November 1973 contained 16 pages? Is it also a fact that the report as presented to the Parliament contained only 15 pages and the information on the deleted page was not included in the report to the Parliament? Did this information list the large number of resignations of military personnel of senior commissioned rank? Will he now make this information available?
– The answer to the honourable member’s question is no. The statement that was prepared and delivered by me in the House of Representatives on 22 October was the complete statement. No alteration was made to that statement.
– 20 November.
– This week.
– This week, I am sorry. No alterations were made to that statement. It arose out of an assurance I gave to the Deputy Leader of the Opposition and one other honourable member who had asked for information concerning the decisions that were initially made in relation to some changes in the defence program. I indicated at the time that I would be happy to make available this information to the Deputy Leader of the Opposition at the first opportunity. Naturally, some decisions have still to be made, but they are not new decisions in the terms of the decision that was taken at the time of the Budget by the Government to effect some alterations in defence expenditure. As soon as the statement was available it was tabled in this House. The honourable member referred also to the question of resignations. Information on resignations was not deleted from that statement. As I said initially, the statement was presented to the House in its entirety. It did not deal with resignations. I give an assurance to the honourable member that a full statement on resignations will be compiled, as I think I indicated on a previous occasion to the Deputy Leader of the Opposition. But honourable members will appreciate that it is not an easy matter to compile figures on this matter immediately. As soon as they are compiled I shall make them available to the honourable member.
– Has the attention of the Minister for Minerals and Energy been directed to a statement by a high ranking member of the Liberal Party in Western Australia
– Order! The Minister is not responsible for what a high ranking member of the Liberal Party says in Western Australia; he is responsible for his portfolio. I ask the honourable member to re-phrase his question.
– I ask a question of you, Mr Speaker. Because alcoholic drinks have become gravely suspect at official functions in this Parliament, causing unfortunate personal repercussions and embarrassment and the interruption of normal parliamentary business, will you, Sir, suggest to the Joint House Committee that Tasmanian nonalcoholic cider and Tasmanian apple juice be added to the drinks available in the Parliament House dining rooms and at official functions in the future? I recommend these drinks as wholesome, palatable, pure and safe.
– This is a very wise suggestion and I can assure the honourable member that it will receive my sincere consideration.
– My question is addressed to the Minister for the Northern Territory and Minister for Northern Development. I refer to previous remarks and representations made by me to the Minister and the Minister for Works about the crippling power failure in Darwin caused by breakdowns at the Stokes Hill power station. In conjunction with his colleague the Minister for Works, has the Minister been able to find a solution, either temporary or permanent, to alleviate the torrid conditions and economic disadvantage being suffered at present by the citizens of Darwin?
– The Government is deeply concerned at the breakdowns of various power plants in the Northern Territory - the No. 3 and No. 5 sets and the boiler trouble with No. 4 set. Every possible move has been taken to try to alleviate the sufferings of the thousands of people in Darwin, particularly the elderly people and those with young families who are suffering most. But up to the present it has been physically impossible to find a solution to the problem in Darwin. We have combed Australia - and for that matter most parts of the world - to try to secure a plant for installation in Darwin to alleviate the problem immediately. This has proved to be an impossibility. However, we have located a plant of approximately 10 megawatts in Tasmania. Approval was immediately given by the Treasurer to spend $l.lm to purchase and move this plant from Tasmania to Darwin. That is in the process of being organised.
However, this action will not solve the immediate problem in Darwin because it will take time to move this plant from Tasmania to Darwin. The action of the Government has at least ensured that in the event of any further breakdowns this plant will be available in Darwin. I know that with regard to the immediate problem the honourable member and the people of the Northern Territory do not want sympathy; they want action. As 1 have said over the last 2 weeks, if anybody can suggest what can be done to solve the problem we will do it. However the problem has been impossible to solve, as the honourable member well knows. The latest information I have this morning is that the No. 3 set is still out of action but should be repaired by the end of next week with a spare part, dispatched from Sweden, which should arrive in Darwin tomorrow, 23 November. It will take several days, of course, to install. The No. 5 set was commissioned, I think only in February of last year at a cost of approximately $5m. 4 top level investigation is proceeding to ascertain why it has broken down. After all, these sets have been proven throughout the world. Not only is an inquiry being conducted by the Department, but also the Legislative Council of the Northern Territory has taken steps to establish the facts. I have instructed my Department that I want to know the facts, whether it is the fault of the machine or the Administration. This has to be flushed out into the open.
– What about summarising it?
– This is very important to the people of the Northern Territory, even if it is not important to the Deputy Leader of the Opposition. Apparently he does not think it is important because he has the benefit of a grid in Melbourne. The situation which has arisen has shown the vulnerability of Darwin and other cities and towns throughout Australia that are not connected with a grid system. What I will be suggesting to various Ministers of the Government is the possibility of having in Australia at least one, or more than one, stand-by power plant that can be put into action when disasters like this occur again.
– Does the Minister for Defence have any information concerning the attitude of the United States of America to his policy of providing information to the parliamentary Opposition on security matters, in particular, the sensitive issue of United States’ bases in Australia?
– I presume that the honourable member is referring to a statement made by the United States Ambassador, Mr Marshall Green, in a Press interview yesterday, I believe. As I understand it the Ambassador was asked a question concerning Australian co-operation with the United States, particularly in matters of joint installations in this country. I have not seen the full text of his statement but I saw the report in which he was asked did he consider that the United States .Government would bt closer to a Liberal government than the present Government. As I understand it his answer was that it would perhaps be closer to the Labor Government because this Government allows the Opposition to know what is happening. I think he had in mind, as I said last night, indeed as I have said before in this House, that this Government has taken the opportunity to keep fully informed the Leader of the Opposition and the shadow Minister for Defence on matters that concern Australia in terms of its security. That has been done. When members of the Opposition were in government information of this kind was denied to the Leader of the Opposition at that time and to other responsible spokesmen for the Opposition.
– Will the Prime Minister confirm or deny widespread Press reports that senior Ministers have challenged Federal Cabinet’s authority to control major economic policy decisions? Will the Prime Minister give this House an assurance that decisions on matters of major economic consequence will be made ‘by the Cabinet and not by the Caucus? Will he also give an assurance that members of the Caucus will not be privy to confidential economic information which could provide its recipients with a financial advantage? Specifically, will the Prime Minister reaffirm his statement in the House last week that Tariff Board reports will be considered solely by the Cabinet and not be canvassed in Caucus prior to any Cabinet decision being made?
– I have nothing to add to what I have said on previous occasions in relation to this matter. Those remarks stand. The only thing I need add is that there was some embroidery in some Press reports today - in some, the main story of the day - that there was a revival of the old Cairns-Whitlam confrontation. All I should like to say is that on economic matters there is nobody in Australia with whom I have conferred more closely, frequently and fruitfully than the Minister for Overseas Trade. I give 2 instances of most fruitful co-operation in that regard. It was he and I who sponsored the report and action on the 25 per cent tariff cut across the board. The Minister for Overseas Trade, the Treasurer, the Minister for Minerals and Energy and I were the ones who consulted so fruitfully on the resource policies which we enunciated on our joint visit to Japan. I am indebted, not for the first time, to the honourable gentleman for asking me a question which enables me to put the record straight, promptly and publicly.
– Is the Minister for Minerals and Energy aware of proposals currently advanced in Western Australia to trade off to foreign powers Western Australia’s mineral and energy resources in return for a surrender of Australia’s national sovereignty? Has the Minister any details of the proposal? Can he assure the House that he will resist any attempts to lessen Australian equity in Australian resources and also any attempts to make Australia a foreign-occupied territory?
– The subject matter to which the honourable member for Kalgoorlie has referred is contained in the text of a television interview in August last in which Sir Charles Court participated. He discussed with certain university gentlemen the desirability of secession by Western Australia. While paying lip service to the integrity of Australia as a nation, he persistently advanced the concept of a trade-off of Australia’s mineral resources in return for some hypothetical defence gains. In Western Australia there is emerging a pressure group whose spiritual home is Rhodesia. It is an authoritarian group whose loyalties are, firstly, to its own pocket and not to Australia and its national sovereignty and integrity. I know of no more disgraceful arguments than those which were advanced on that occasion.
If honourable members want to have a real look at Western Australia and the extent to which foreign investment is in control there, I refer them to the history of the former Liberal Administration. Honourable members will find that there was only a IS per cent Australian equity in the natural gas of the North West Shelf. I ask honourable members to examine the position, with the notable exception of Mount Newman, in relation to the ownership of iron ore. I ask honourable members to go right through the whole list, the whole gamut, of mineral development in Western Australia. They will find planning at the bottom of the list this same junta whose loyalties, I repeat, are to its pocket and not to Australia. Those people will be held in contempt by all good Australians. We will ensure that by implementing Labor Party policies on foreign investment in minerals, and doing it in conjunction with the Western Australian Labor Government, there will be no further incursions into Australia’s national heritage in respect of mineral development and, above all, we will ensure that in Australia which is unique in history - we are one people with a common tongue, a common culture and a common parliamentary tradition, in possession of a whole continent - we will develop our birthright for the benefit of Australians as a whole and not for this particular group.
– My question is directed to the Prime Minister. Is he aware of a statement by Dr Kissinger on 25 October which indicated that the alert of United States forces around the world which was ordered by President Nixon had been undertaken as a result of a unanimous recommendation by the National Security Council? Is the Prime Minister also aware that Dr Kissinger had also indicated that the National Security Council had reached this recommendation while the President was not even present? In view of this report of Dr Kissinger’s statement, which was widely reported, I ask the Prime Minister how he could make the statement on 8 November that the President had acted for domestic reason.
– I have nothing to add to what I said on this matter on the motion by the official spokesman for the Liberal Party last Tuesday. I would commend to the honourable gentleman the second editorial in the ‘Age’ today. Australia, as I said, was not officially informed about this alert, even as regards the North West Cape station. It was not consulted. The ANZUS Treaty and the United States Naval Communications Station Agreement would both indicate that Australia should have been consulted.
– I direct a question to the Minister for Urban and Regional Development. Has the Minister’s attention been drawn to the pending auction sale by the Family Care organisation of Emerald Hill in South Melbourne? ‘Have approaches been made to the Australian Government to assist the South Melbourne Council to acquire this site? Does the proposed sale provide the community with the opportunity to preserve and enhance a significant portion of our urban fabric similar to the action that the Australian Government has taken in Glebe, Sydney?
– This matter has been brought to my attention first by the Treasurer, in whose electorate this area is located, and also by the honourable member for Melbourne and the South Melbourne Council which has made representations to my Department. An examination of this area has been made by officers of my Department and also by the Committee of Inquiry into the National Estate. The Treasurer and I have conferred on financial arrangements with a view to supporting the South Melbourne Council’s attempt to acquire this site for the public sector. It is a townscape which the national Government seeks to retain as such. I agree with the honourable member for Melbourne that as the townscape of Glebe in Sydney should be retained so should Emerald Hill. If the Victorian Government will co-operate, we will then co-operate with the State Government and the Council in order to acquire this unique townscape for the public sector.
– I direct a question to the Minister for Health. Does he still stand by the statement that he made in this Parliament on 15 November with respect to some correspondence under his hand which was circulated in a roneoed form amongst members of the electorate of Monaro in favour of Margaret Gleeson, the Australian Labor Party candidate for that State electorate, that none of the printing costs, none of the stationery costs and none of the postage costs were met by any Government department or by him personally? If so, will he explain to the House how a letter and an envelope addressed to an addressee in Cooma East, which letter was inadvertently put in my mail, came to be in a House of Representatives envelope and on House of Representatives stationery? Is it true that some of those circular letters were in fact dispatched on House of Representatives stationery? If so, how many? I also ask the honourable gentleman how much of the rest of the statement that he made to the House on 15 November is untrue? I table the letter and the envelope.
– Order! The honourable gentleman cannot table the letter as yet.
– To my knowledge, there are no House of Representatives envelopes in my office, so I do not know the origin of that particular envelope. Within my knowledge, and authority, no official stationery, official postage or official printing facilities have been used in connection with this circular. I stand by the circular.
– Does the Minister for Immigration recall my question of 30 May last and my suggestion that Commonwealth instrumentalities such as the PostmasterGeneral’s Department and the Defence Department should set an example in teaching English to migrant employees. Has any progress been made in this direction?
– Following the suggestion that was advanced by the honourable member, I did take up with my colleagues in relevant Australian Government departments the matter of checking whether their employees who were migrants had been given adequate access to English classes. After all, I have been saying, and I believe most sincerely, that all major components of industry that are employing migrants should provide language facilities for them, at least the time. The Department of Immigration will help them with the teachers and with the material, but at least the time should be made available in the workshops. The suggestion by the honourable member that the Australian Government should set the example seemed to me to be reasonable.
I am pleased to say this morning that the Minister for the Capital Territory who was Acting Minister for Repatriation has taken very quick action in relation to this matter. He has advised me that he discovered that, in the Repatriation Department, more than 1,000 migrants from 60 different countries are employed. Approximately 120 of those employees have an inadequate knowledge of English. I understand from that Department that an instruction has gone forth to regional directors to provide facilities for those employees to catch up on the language. I also understand from my colleague, the PostmasterGeneral, that he is engaged in a similar action in the Postmaster-General’s Department. I hope to hear from my other colleagues in due course. I must compliment the honourable member for Mitchell on his suggestion which is bearing good fruit.
– I direct my question to the Minister representing the Minister for Aboriginal Affairs. Is the Minister aware that racial ill-will is becoming increasingly evident in our society and that this has been caused by financial discrimination in favour of our Aboriginal people? Does the Minister agree that we must con,tinue to discriminate in favour in many cases? Does he understand however, that some Aboriginal people who qualify for and receive special financial assistance are most definitely not in need of this ‘assistance and that this is destroying their self-dependency and is creating understandable tensions in the poorer non-Aboriginal community? Will he consider a complete review of the present practice of making grants to anyone who claims to be Aboriginal and devise a system which will ensure that money is spent only where it will be beneficial, and thus command the endorsement of the entire nation?
– It will be the day when we do something which gets the endorsement of the entire nation. However, with respect to Aboriginal people, it is true that throughout the community resentment is expressed when any group receives advantages which perhaps have been denied that group for many years. It is one of the unfortunate areas of public opinion that the public sees the Aboriginal people as receiving something to which they are not entitled when they receive something which places them on a par with the rest of the community.
I will cite one example. It is true that Aboriginal children attending secondary school receive, without means test, an allowance from this Government. But it is true also that we do this without means test for isolated children throughout Australia, regardless of the means of their parents. So, in fact, the idea that the Aboriginal people are receiving advantages of this sort which are different from those available to the rest of the community is not true. The community is inclined to look at anything we do for the Aboriginal people and ask why they are getting it, without doing some arithmetic about their own situation. In the electorate which I represent there are people living in housing commission houses worth $16,000, $17,000 and $18,000 for which they pay $6, $7, $8, $9 or $10 aged persons means tested rent. There are very few Aboriginal people in Australia receiving that kind of capital backing for their domestic affairs. I think what we have to do, and I agree with the honourable member, is produce the arithmetic behind it all to demonstrate that in fact these advantages are not to the disadvantage of the rest of the community.
It is also against our general policy to apply means tests in these areas. There are very few Aboriginal people who are not entitled to and need the assistance they are given. But the question of whether people who claim to be Aboriginal are in fact so is a very difficult question. I just do not know how one can define this question of race satisfactorily. The Government would be very reluctant to start to look into people’s antecedents when they make claims about it. But the whole situation is under constant scrutiny, and we can only take every possible step to see that the people who need assistance get it but that we do not let resentments based upon wrong presumptions in the community slow down our program.
– I ask the Acting Minister for Education: How many capital projects in Victoria have been approved in principle by the Minister under the provisions of the Child Care Act? How many applications for capital projects have been received from Victoria? How does that number compare with the number of applications received from other States? Can he confirm that funds are available for further applications from local government organisation and community groups for grants for capital projects to be considered under this Act?
-I shall deal with the last part of the question first. More funds will be available in accordance with the appropriation made under the recent Budget. I understand that 46 applications were received from Victoria. Twelve have been approved. Another fourteen are in what is deemed to be the concluding stages of assessment. I understand that four have been rejected or ruled ineligible, and others in Victoria are still receiving preliminary assessment. I think the other part of the honourable gentleman’s question related to comparisons with other States. In New South Wales 92 applications have been received, in Queensland 15, in South Australia 14, in Western Australia and Tasmania 9 each in the Northern Territory 8 and in the Australian Capital Territory one.
– Will the Minister for Social Security table in the House all the information contained in the documents and calculations on which he bases his assertion that health insurance under his proposals will be cheaper for three out of four families and seven out of ten single persons?
– Basically the information used for the purposes of that exercise comes from the Bureau of Census and Statistics pub lication ‘Family Income 1969’ which was published quite recently. It is a simple exercise to update those calculations. When I was in Opposition I received no help from the Government and did the hard work myself. I suggest that members of the Opposition ought to start doing a bit of work too.
– My question is also addressed to the Minister for Social Security. Has his attention been drawn to protests by the Commonwealth Bank Officers Association against attempts to misrepresent the attitude of the Association to the Australian health insurance program? Has his attention been drawn to other vigorous expressions of support, for the program from sources such as Anglican bishops and the leader writers of major Australian newspapers? Finally, will he arrange for these most eloquent expressions of support to be collated and circulated to honourable members, and in particular to the honourable member for Boothby?
– As honourable members would know, the Commonwealth Bank Officers Association has objected to the misrepresentation of the position of that Association for which the Australian Medical Association was responsible. It has pointed out that, contrary to the claims of the AMA, the Bank Officers Association is not opposed to and has not criticised the health insurance program. If I am correct, I believe the Association has endorsed it. The gentleman who prepared a paper which was critical of some aspects of the program and who sent it to the Association discovered after he had met officers of my Department and my personal advisers that he was wrong in his assertions. He has acknowledged his error publicly.
I have been pleased to note that ecclesiastics have supported the Government’s program. The Church of England - indeed all churches have done so - has expressed concern about the rights of needy people who are not covered by the present system of health insurance. They have expressed concern about equally important aspects of our scheme, namely, that it introduces equity in its operation; the cost is distributed according to one’s ability to pay. Some of them have indicated their support of the fact that it is a more efficient financial operation without in any way impairing the quality of medical care but in many respects enhances it. As I pointed out, the Church of England has been significantly to the fore in this broad area of concern for people’s rights in the community and it has been noticeably active, for instance, in expressing its concern about the need for an effective campaign against poverty in the community. That is about to be done, now that we have expanded the poverty inquiry. I do not want to delay longer on that point at question time.
I come to the final 2 points which were mentioned. The first concerned the leader writers of various newspapers who are now indicating the attractiveness of our proposal as against the defects of the present scheme. Of course this is a very encouraging feature. I single out the ‘Age’ leader writer. When newspaper editorials such as those of the ‘Age’ take an even-handed attitude in these matters, criticising where it is justified and encouraging where it is believed to be desirable to encourage. they play an influential role in decision making, at least insofar as I am concerned. Where an editorial writer wears his political commitment on his sleeve, as happens with some newspapers, those editorials are immediately discounted. I have appreciated some of the critical comments that have been made in the past by the ‘Age’ editorials. Those critical comments were taken into consideration and, believe me, were influential in our deciding upon some of the modifications that were set out in the White Paper which I tabled in this Parliament recently following the planning committee report which was tabled several months ago for the purpose of stimulating public debate and which achieved that purpose.
The final point was whether I would collate these matters and distribute them in the Parliament. I am sure that all members of the Parliament would welcome such a distribution. I am certain that members of the Opposition would find it extremely informative. It would save them from making embarrassing mistakes at question time with some of their fallaciously based questions. I will consider this proposal and I will let the honourable member know later.
– I ask the Prime Minister: Will his Government agree to re-examine the level of aid to northern Africa as set out by the Minister for Foreign Affairs in his Press release of 16 November? Is it a fact that the aid promised by his Government amounts to too little too late and does not measure up to the Government’s claims to special relationships and policy initiatives in Africa? Specifically, is he aware that many Australians and people overseas regard his Government’s decision to make a cash contribution of a mere $17,000, plus some milk biscuits and wheat, as being totally miserable when set against the bench mark of need, against the target of the Australian Council for Overseas Aid, which sought a public contribution of $200,000, a target which was reached a week after the campaign began; and against the priorities of his Government, which spent in excess of$1m for a painting from overseas? I do not quibble with the decision to buy that painting, but I point out that the same Government can find only $17,000 for people who are in need of assistance which can save lives. I ask - not for any party political reason - whether-
– Oh, no.
– The honourable gentleman and others can seek to make light of the question, but I ask the Prime Minister: Is he prepared to re-examine the extent of the aid which has been provided?
– The Government is constantly examining how far and how fast it can help in the emergency in Ethiopia, as it was in the emergency on the other side of the continent - at the same latitude - in the Sarhelian countries. Overnight or early this morning I was in fact reading the latest cables from our Ambassador. The unfortunate position is that communications in this area are very difficult indeed. The quickest way in which we were able to help was to allocate this amount of money. It is not a large sum, of course. It is a sum which is the merest chicken feed for this country. But it was able to be put into use immediately, and that was all that could be put into use immediately.
There have been offers of assistance from, for instance, medical students and many qualified and humanitarian people in Australia. The difficulty is to get them to the areas affected. Aircraft and land vehicles are not available to transport goods or people. For instance, particular arrangements have had to be made to deliver the protein biscuits. The Ethiopian Minister concerned has been involved himself in getting them to that area.
Our Ambassador to Ethiopia has so reported. I will give honourable members an instance of the difficulties that exist in this area. Three Australian journalists have arrived in Ethiopia. It is of the greatest embarrassment to the authorities that they cannot get them to the affected area and that they could not accommodate them if they did get there. That is part of the trouble with the medical students whose case was brought to our notice a couple of weeks ago by the honourable member for Adelaide and which I was able to discuss in Adelaide last Friday.
Questions of transport, accommodation and language make it extraordinarily difficult for individuals to help on the spot. Even where we have provided something which Australia produces and which is very relevant, such as these protein biscuits, there is real difficulty in getting them delivered to the areas affected. The particular cable that I was reading in the early hours of this morning - I suppose it was not really long before dawn - indicated that the best thing we could do now would be to purchase 4-wheel drive vehicles for the purpose. I can assure the honourable gentleman that my Foreign Minister, Senator Willesee, is reviewing this matter constantly and that I am in constant touch with him about it. We want to see people there who can help. We want to get the goods there that are needed. We have done all that can be done at this stage, but we are looking for the opportunity to do more when there is any chance of success.
– I wish to make a personal explanation, Mr Speaker. I was misrepresented this morning in at least the ‘Australian’, Sydney Morning Herald’ and ‘Daily Telegraph’ newspapers. The ‘Australian’ had a headline ‘Cairns challenges PM on economic decisions’. The ‘Daily Telegraph’ had a headline ‘Cairns leads shock attack on PM’. The ‘Sydney Morning Herald’ had a headline ‘Cairns, Whitlam in Caucus conflict’. Those reports are false. No journalist spoke to me. There is no evidence that any of them or their staff ever tried to do so. Yet they are willing to spread across the front of a national newspaper headlines of that kind which are very damaging to the person concerned. There is no challenge, attack or conflict coming from me to the Prime Minister, nor will there be.
If such was involved, I immediately would give up any concern I have with Australian Labor Party parliamentary procedures. But action to see that all elected members of the Australian Parliament are fully informed about significant economic matters is a proper thing to do, and something which I and the Prime Minister are equally concerned to bring about. I say no more than express my personal disgust with journalists who work in the way they have in this matter.
- Mr Speaker, I wish to make a personal explanation.
-Order! Does the honourable member claim to have been misrepresented?
– Yes, Mr Speaker, by the Minister for Social Security (Mr Hayden). I paid him the courtesy yesterday of telling him that I was going to raise this matter. I have a copy of a letter that has been sent under the signature of the Minister to a lady in Queensland, the last paragraph of which reads as follows:
Finally, I remind you that Mr Don Chipp, M.P., the Liberal Party’s health spokesman in the Federal Parliament, has not only criticised doctors for their misrepresentation of what we are proposing but has said quite firmly, without any reservation at all, that our scheme is not nationalisation. I should hope that Mr Chipp’s outspoken support of our scheme ends the foolish misrepresentation for which so many medical practitioners have been responsible in recent times.
The letter has the Minister’s signature on it, and 1 ask for leave to table it.
– Yes. You can have it incorporated in Hansard, if you like.
-Order! Is the honourable gentleman seeking leave to have the letter incorporated in Hansard?
– No, I just wish to table it.
Government supporters - Oh!
– Well, I will ask for leave to have it incorporated in Hansard if honourable members opposite give me leave to incorporate in Hansard the speech which makes everything that the Minister states in the letter a dishonest statement, as I am about to say.
– 1 have no objection to its being incorporated in Hansard.
– I pause for honourable members opposite to contemplate that prospect.
– There are 1 0 pages.
-Order! There will be no private arguments across the table. The honourable gentleman seeks leave to have the letter tabled. Is leave granted?
– Leave is granted.
– I have the speech to which the minister referred in his letter and I will be asking leave in a moment to have it tabled with the Minister’s letter. At no stage in that speech did I criticise doctors. I criticised some organisations representing doctors and, in particular, I criticised the one organisation which depicted the Minister dressed as a Nazi stormtrooper. At no stage have I criticised doctors.
However the other 2 misrepresentations are even more serious. The Minister said that I said ‘quite firmly without any reservation at all that our scheme is not nationalisation.’ I have said that this scheme is basically nationalisation of health insurance funds. The Prime Minister (Mr Whitlam) has stated that the first act of nationalisation the Australian Labor Party would commit when it came to office would be to nationalise health insurance funds. I have gone on to say that the Labor Party’s health scheme will also lead to nationalisation of doctors. What I have said is that the scheme at present is not nationalisation of doctors but that it will lead to it. But the last misrepresentation is the most serious of all.
– Did you say ‘could’ lead to nationalisation not ‘would’?
– Yes, I did. The last misrepresentation is the worst of all. I refuse to believe from my experience as a Minister that the Minister’s Department wrote this letter. It was written by the Minister.
– Mr Speaker, I rise to order. I question again whether during personal explanations, former Ministers on the Opposition side, who are under certain privilege, can make a comment. The words that the honourable member was then saying were comment, and frankly, after every question time Opposition spokesmen are making speeches in personal explanations. I believe it is against Standing Orders and it is not a fair go.
-Order! The Minister will resume his seat. A point of order has been taken. I do not think any member of the House has ever made a personal explanation without getting beyond a personal explanation, irrespective of what side he has come from. That has been the position since I have been a member of this House. I have been trying to follow as closely as I could what the honourable member for Hotham has been saying. He has made about 3 points where he alleges that he has been misrepresented, but as yet I do not think he has been out of order in putting his case. I call the honourable member for Hotham.
– Thank you, Mr Speaker. I conclude with the third misrepresentation where the Minister says: ‘I should hope that Mr Chipp’s outspoken support of our scheme ends the foolish misrepresentation’, etc. I would defy the Minister either in this Parliament or outside it, on any media, to point to one sentence in my speech where I have given any kind of support to the Labor health scheme. In fact, in a speech which ran for 45 minutes, I spent 40 minutes saying that the scheme was a disaster. The Minister’s letter disappoints me in him as a man, and I would ask him not to do it in the future.
-Order! The honourable member is now debating-
– I seek the leave of the House to table the speech to which the honourable member was referring as well as the letter.
-Is leave granted? There being no objection, leave is granted.
Mr HAYDEN (Oxley - Minister for Social Security) - I wish to make a personal explanation.
-Does the Minister claim to have been misrepresented?
– Did you sign the letter?
– I not only signed the letter but I was responsible for the creative prose that went into it. It was based on the honourable member’s speech to the Australian Dental Association in Melbourne. I quote from that speech:
There have been many cliches spoken, in the hope that people are idiots, and based on the false premise that just because someone drops a cliche, everyone is going to believe it and therefore hate the Government, hate the Labor Party, and despise the health scheme. This line of reasoning is stupid. Cliches such as ‘Nationalisation of doctors, of medicine, lowering of standards of medical care’ and so on, without trying to prove such statements, are meaningless.
Now if it means instant nationalisation of doctors - and it doesn’t in its present form - let us look at it more closely. Maybe it will lead to nationalisation. Maybe it will lead to lowering of medical care, but in its present ‘innocent’ form it doesn’t mean that. I believe that no longer can one delude the people of this country on the basis that they are halfwits or idiots, because people do think and work things out for themselves.
On page 1 1 of his speech, he made an interesting comment. On that page he said:
There are up to 1 million people in our community who are uncovered for health insurance.
That seems to deflate somewhat the argument he was trying to resurrect the other day. But I like the comment that appears on page 10 of this paper which his office supplied to me. I quote from that page and I should like honourable members to listen to this because it is a gem and it bolsters our case. He said:
I chair a committee of parliamentarians of the Liberal Party now looking at an alternative schemenot an alternative scheme - but at ways in which to make our scheme, which I still say is philosophically sound, work.
He confesses that it does not work, it never has worked, he is trying to make it work and that he is trying to prepare a plan. Finally, I refer to this quote on page 11 of this document:
What are your views on the suggestions of my Party concerning an independent tribunal to determine annually medical fees? We differ from the Government here because we insist on an independent chairman.
I find that objectionable. Mr Justice Ludeke’s impartiality is beyond question. He has done an excellent job and I believe to the satisfaction of the medical profession and the Australian community. He formerly represented many groups in the community as a barrister before the courts. He was competent and impartial in presenting a case on behalf of his clients then, just as he is competent, impartial and extremely industrious in handling his responsibilities as a justice of the court now. I believe that a comment such as that, which carries an inference - a very heavy inference - that he is impartial, should be unacceptable to all members of this Parliament and members of the Opposition ought to dissociate themselves from such a scurrilous attack upon a justice.
-Order! Now the honourable gentleman is debating the question.
Mr CHIPP (Hotham)- I claim to have been further misrepresented by the Minister.
-I call the honourable member for Hotham.
– He has abused a courtesy I gave him yesterday of giving him notice. In the future I will not do so. He has quoted one sentence out of that speech. May I just quote one more? I said:
In talking about a national health scheme, my basic premise is that the national health scheme as introduced and practised by the Liberal-Country Party government was not only a good scheme, but one of the best in the world.
Having said that, let me add that I concede it had 2 basic defects. I rest my case on that, Mr Speaker.
– Pursuant to the provisions of the Services Trust Funds Act 1947-1950 I present the annual reports of the Australian Military Forces Relief Trust Fund, the Royal Australian Navy Relief Trust Fund and the Royal Australian Air Force Welfare Trust Fund for the year ended 30 June 1973, together with the reports of the Auditor-General on the books and accounts of the funds.
– For the information of honourable members, I present the annual report of the Australian Fire Board for the year ended 30 June 1973.
– For the information of honourable members, I present the first annual report of the Department of Urban and Regional Development for the year ended 30 June 1973.
– I wish to make a personal explanation.
– Does the honourable member claim to have been misrepresented?
– Yes. The Minister for Defence (Mr Barnard) on at least 3 occasions lately - the last occasion being during question time today - persists in saying-
– Mr Speaker, did I hear the honourable gentleman ask for leave to make a statement?
– No. He is making a personal explanation. He claims to have been misrepresented.
– The Minister persists in saying that the secrets of the Department of Defence have been made available to me as Opposition spokesman on defence matters. Indeed, in an answer to a question today, he implied that this has enabled so eminent a person as the United States Ambassador to believe that that is correct. The Minister quite clearly has implied that I have only to ask and I will receive. I have explored this Pandora’s Box which the Minister has said he has opened up to me and I have discovered, as a result of inquiry and these explorations, that, in fact, I have been specifically denied any information which would enable me to make any judgment at all about the credibility of the Government’s defence policy. In particular, I have specifically been denied access to the strategic basis of defence policy from which the Minister has been quoting large chunks to public audiences all around Australia.
– I wish to make a personal explanation.
-Does the honourable member claim to have been misrepresented?
– Yes, in a report in the Canberra Times’ this morning of a question I asked of the Minister for Social Security (Mr Hayden) in this House yesterday. The report states:
The increase in pharmacy charges for making up prescriptions was granted to the pharmaceutical profession without any demur at all, the Minister for Social Security, Mr Hayden, told Mr Staley . . . . who asked in the House of Representatives yesterday if the Labor Government had been over-generous in granting the recent 8 per cent increase. Mr Hayden said the increase restored proper and amicable relations between the profession and the Government.
In fact, I asked the Minister whether he had claimed in a recent article that the Government had made a generous increase in pharmaceutical benefits; whether it was a fact that he said that this increase had been constantly rejected by the previous Government and whether this was not totally misleading in view of the fact that all the Minister was doing was putting into practice agreements reached between the pharmacists and the Liberal-Country Party Government early last year. I asked him, therefore, whether he was not distorting the situation and using mislead ing propaganda in precisely the way that he so often accuses others of doing.
Motion (by Mr Lynch) agreed to:
That leave of absence for one month be granted to the honourable member for Curtin on the ground of public business overseas.
– (Australian Capital Territory - Minister for Secondary Industry and Minister for Supply) - I present the report, together with the minutes of proceedings, of the Committee of Privileges in connection with the matter referred to the Committee by the House on 15 October 1973.
Ordered that the report be printed.
– In accordance with the provisions of the Public Works Committee Act 1969-1973, I present the reports relating to the following proposed works:
Dripstone High School, Darwin, Northern Territory; and Stage 6 Extension of the Stokes Hill Power Station, Darwin.
Ordered that the reports be printed.
– In accordance with the terms of standing order 159 I inform the House that I fix general business, Thursday No. 12 as the day on which I shall move the motion.
– I move:
That a Select Committee of this House be appointed to inquire into:
I think it was on 25 October last that the survivors from the ‘Blythe Star’ were located and rescued even though the ship had sunk some 12 days previously. As soon as the news of that came, I gave notice in the House that I would move a motion in the above terms. I think it is almost a month since I moved that motion. Obviously 2 questions which exercise the minds of the public should exercise the minds of honourable members of this House in regard to this incident. The first is: Why did the ‘Blythe Star’ sink? The second is: Why were the survivors not found and what can be done to help in such other cases in the future?
The first of those questions is not included in the terms of my motion. I am not offering any opinion as to why the ‘Blythe Star’ sank. That is a matter on which I have no views except that it is inexplicable on our present knowledge. It was a tragic event and it is important that that question should be resolved. But my mind is not directed to that aspect in the slightest. I am asking why the raft was not found and what can be done to facilitate the search for such rafts in the future. Although we all hope that such sinkings will not occur in the future we know that in the nature of things they may.
I briefly recall to the minds of honourable members - although they might not require such recalling - that the men on board the Blythe Star’ launched from the vessel one of the survival rafts which I think was 12 foot in diameter with a fluorescent orange canopy. It was safely launched and it drifted from the position where the vessel should have been at the time it sank, past a lighthouse on Moat.suyker Island, across the mouth of the Derwent River, .past fishing boats, within a stone’s throw of a lighthouse on the south of the Tamanian peninsula and, finally, after passing within the sight of a tourist hotel, was beached in an inhospitable cove where there was further loss and tragedy because of the difficulty of making contact with civilisation even after the raft had come ashore. This is an incredible story because there was mounted a large and expensive search with all the technical facilities at our command. Yet this raft, starting from the most probable point where the vessel would have sunk, passing by lighthouses and coast watchers, through fishing vessels, near other vessels, across the mouth of the Derwent River that runs into Hobart, past another lighthouse within a few hundred yards, and within sighting distance of a tourist hotel, still was not located and was given up for lost. I think the House will agree with me that this is a most extraordinary chain of events.
– The honourable member says ‘incredible’. I find it almost impossible to believe what has occurred, yet it did occur. The questions we have to ask ourselves are, first, why there was no better information as to the location of the vessel at the time it sank. There is some unsatisfactory evidence - I do not regard it as conclusive - that a ‘May Day’ distress signal was sent out from the vessel before it sank. I do not know whether that is true or not. It has been reported and it should be investigated. Why was the raft not seen by the lighthouses? Why were the vessels through which it drifted not alerted? Why did they not give it assistance? Apparently some of them were Japanese fishing vessels. Apparently one of them was the ‘Mary Holyman’, an Australian vessel that passed between the raft and a lighthouse. Although apparently some kind of a flare was sent up, nothing was seen. Most incredible of all, why was the raft not found when the defence forces mounted this very large operation? It was a large operation with 14 planes involved at one time. It cost, I am told, over $250,000 and the equipment involved must have cost very many tens of millions of dollars. As the honourable member for Hunter has said, it is almost incredible.
When questions of that kind are asked surely we should be taking some kind of special measures to find the answers. The questions occur in this order: First, why was there not more notice given and more vigilance from the lighthouses, the vessels and the people in the area? I know that it is hard to spot an object at sea. The raft was 12 feet in diameter and had an orange fluorescent canopy over it - not altogether an inconspicuous object, though the sea is a big .place. Then, how many vessels were round about? There has been talk of fishing vessels. They were not the only vessels. Why, why, why were the defence authorities incapable of finding it? That last question is one that should concern the House because the whole of our defence appreciation is based upon our ability to find objects at sea. If one cancels from the defence appreciation the possibility of finding objects at sea, then the defence plans for Australia might have to be quite significantly revised. This is a question of almost transcending importance. We have been told that a submarine cannot stick up a periscope within 300 miles of Australia without somebody being able to spot it, that radar will find everything. Well, radar did not find this, and we have been told that it could not find it because it was not composed of metal. If this House were to pass a law that every one of our enemies should always use metal in everything it puts up from a submarine I am afraid we could not enforce that law.
If there is that kind of unreality at the base of our defence appreciation, this complete unreality which has been shown up by our enemies or potential enemies, it should be taken notice of by our authorities. The exercise - if one can call it an exercise - is an exercise in reality. When it comes to reality the exercise falls down. This is of tremendous importance and significance. I am not trying to make a case against the Government. I am not even trying to defend what the Opposition may have done when it was in Government. What I am doing is saying that this House has to take some notice of defence realities, irrespective of Party. This aspect does seem to me of tremendous importance.
Leaving that, a side issue perhaps as far as the motion is concerned but perhaps the most important aspect of the whole thing, let me come to practical things. What can we do to prevent a repetition of this incredible series of events? It seems to me that there are 3 things we can consider. The first is better reporting and better vigilance. This concerns the network of radio stations, the possibility of using local fishing boats, even local pleasure boats, as some kind of coast guard. All those kind of things can be considered. Was there sufficient vigilance? Was there slackness and a breakdown on the part of watchers on the ships and of watchers at the lighthouses? We should like to know the answers to those questions.
The second matter is obviously a simple one: A survival raft should have a radar reflector on it. From the accounts we have been told that the crew on this raft used food containers, their tins, and tried to make radar reflectors from them. Obviously if they did that - and I believe they did - those efforts were ineffectual. I have seen statements from responsible officers to the effect that a little bit of tin foil that could have been put over the orange canopy on the raft would have made the raft a radar reflector. That would be a very simple thing. I do not suppose we would be thinking in terms of more than a couple of dollars a raft in regard to that aspect. If there is to be a radar search why not make rafts amenable to radar location? That could be done practically costlessly. It may be that we should be having on rafts heat sensors and infra-red sensors which are available, and perhaps this is some kind of reflection on the technical ability of the defence forces that were doing the search. This was not the kind of thing for which they were searching. The enemy is not incapable of looking for ways and means of outwitting your defence.
Finally, let me say something about a very simple little device called a survival beacon which, I believe, it is obligatory to fit to most aircraft and which, when it is activated, will send out a sound known as a bleep which can be located quite accurately by the radar in a commercial plane from a distance of perhaps more than 100 miles. That bleeper will operate even in bad weather; cloud will not affect it. If a raft were equipped with a survival beacon or bleeper - call it what you like - there would be no difficulty whatsoever in finding a raft. I happen to know something about this device because when I was in Central Australia I was considering carrying a survival beacon myself in case I became lost in the desert. It is quite a simple device and there is no reason at all why every life raft should not, as a matter of course, be equipped with a proper survival beacon. There is no difficulty about it; it is not terribly expensive.
– One hundred bucks a pop.
– I was thinking of, perhaps, a couple of thousand of them. The honourable member for Hunter suggests $100 a pop and he might not be far wrong. They would be cheaper if they were bought in bulk and, for the $250,000 which was spent on the fruitless search, the Government could have made certain that no such search in the future would be fruitless. I gave notice of this motion immediately I heard of the incredible series of events. I gave notice of it before the Government appointed its own committee of inquiry. I believe it is a good committee of inquiry headed by Mr Taylor. I have no complaint to make about what the Government has done in that regard. At the time I think there was a good case for the Parliament to hold an inquiry while the evidence was still hot, while all the information could be obtained.
The Press has made that inquiry. It has published the results of the inquiry, and I congratulate it on the work it has done. But its work will be backed up, I am sure, by the inquiry which the Government has instituted, and I do not cavil either at the nature of the inquiry or the personnel appointed to conduct it. I thought that the time when this notice of motion expired was 30 November. Obviously, the motion is out of court now, and I do not intend to press it. What I want to do is to draw the attention of the House to some of the salient points I have raised. I hope that my friend, the honourable member for Moreton (Mr Killen), who is to second this motion, will agree that the motion should not be pressed.
Mr DEPUTY SPEAKER (Mr Scholes)Order! Is the motion seconded?
– I second the motion and I make but a few brief observations. I think this motion is a tribute to the industry and compassion of the honourable member for Mackellar (Mr Wentworth). Whether one always agrees with the end result, his industry is a matter of constant astonishment to all of us who sit in this House. His compassion is very deep, very genuine and very widespread. This is another manifestation of it. I understand that my friend, .the Minister for Transport (Mr Charles Jones), wishes to announce to the House some further action that he has taken. The Minister has already acted, if I may say with respect, with great promptness, and that is acknowledged by all honourable members on this side of the House.
The only other thing I should like to say is to commend the practical suggestion made by the honourable member for Mackellar. He suggested the installation of wireless survival bleep apparatus in all boats. This is done with respect to light aircraft and, as the honourable gentleman has pointed out, the cost is not daunting in any sense at all. The editorial in the Melbourne ‘Age’ of 20 October this year commented on the need for wireless bleepers to be fitted into ships. In its observations it drew attention to the fact that in August 4 years ago it had, in a feature article, suggested the standard issue of radio rescue beacons on all ships. I suppose the fact that nothing was done is a further illustration of the fact that the mills of God do indeed grind slowly. I am sure the Minister will be responsive to the suggestion made by the honourable member for Mackellar. I hope that he will introduce a measure of swiftness to ensure that something is done.
– I am pleased to note that the honourable member for Mackellar (Mr Wentworth) does not intend to press his motion, so I assume that it will lapse after I resume my seat. The honourable member referred to the life raft and to the fact that it had an orange canopy which was about 12 feet in diameter. I should like him to understand that the orange canopy was put on the life raft deliberately because orange is the colour that is accepted internationally as being the colour most easily seen at sea. So, for that reason orange is the colour which is used in these circumstances.
The honourable member for Mackellar asked what the defence authorities were doing. I do not want to canvass the matters which the marine court of inquiry will be investigating, but as far as I am concerned this will be one of the subjects into which the inquiry will be entitled to inquire. Although I do not have the Press cuttings with me at the moment, I know from my own interest in the sinking of the ‘Noongah’ that in his findings on that occasion Mr Justice Spicer was most critical of the Royal Australian Air Force for the manner in which it went about searching for survivors from the ‘Noongah’. I do not think that we will escape any criticism if this inquiry into the sinking of the ‘Blythe Star’ finds that criticism is necessary. Mr Justice Dunphy who is conducting the inquiry will level criticism at any person, organisation or department which he considers should be criticised in relation to the search for the survivors of the Blythe Star’. The honourable member for Mackellar referred to this matter, and as far as I am concerned, if we were at fault, let the marine court of inquiry bring out the facts.
I should like to draw attention to one other factor. The Tasmanian Transport Commission sent up a plane before the RAAF was called in, and that plane did not find the survivors. Even after the Department of Transport had called off the search by service aircraft after almost a week’s operation, we still had a helicopter searching the coast. I believe that the Tasmanian Transport Commission likewise had a light aircraft searching the coast, but still no one picked up the survivors. The fact that the survivors got literally within hailing distance of a tourist hotel without being detected is one of the questions to which the court of inquiry will have to find the answers. I certainly have not got the answer to it. This is one of the answers which I hope will come out of the inquiry.
I appreciate the fact that the honourable member for Moreton (Mr Killen) said that we acted promptly, and I do not think that in any circumstances anyone can level any criticism at what we have done. The survivors of the Blythe Star’ were found on 24 October. I immediately, even before the honourable member for Mackellar gave notice of his notice of motion, appointed Captain Taylor to conduct a preliminary inquiry. He reported to me confidentially yesterday. If I may, I will draw to the attention of honourable members the difference between the way in which I have acted in this matter and what took place in respect of previous tragedies like this. On 2 November, some 7 days after the survivors were found, I invited the Chief Justice to appoint a judge to conduct the Court of Marine Inquiry which I had directed should take place.
– Will the report to you be made public?
– Captain Taylor’s report to me will be made available to the counsel assisting the judge. As far as I am concerned, it is a confidential report to me. Captain Taylor will make the full report available to the counsel.
– But not here?
– No, not at this stage. This is a procedure which the courts follow and I will not interfere in any way whatsoever with the procedures that this court wants to follow.
– When will the judge start his inquiry?
– The inquiry will commence, I believe, on 3 December. .Mr Justice Spicer was originally to conduct the inquiry but he has informed me that due to ill health he will not be available until February. I was informed of this last Friday. My reply was that whoever was to conduct the inquiry was a decision for him, not for me. I was asked whether I wanted to make a recommendation. I said: ‘No, as far as I am concerned Mr Justice Spicer, the Chief Justice, will make the selection of who would conduct the inquiry’. That is the position at the moment in regard to the inquiry.
As I have said, I am appreciative of what the Opposition has said about my actions. I inform honourable members that on 3 December voluntary position reporting and voyage plan procedures will be brought into operation. The Marine Operations Centre will be conducting this. Shipping companies will be invited - we cannot at this stage direct them to do so - to lodge their voyage plan and we will invite them to have their vessels report their positions regularly so that we will know where a ship is at a particular time. In the case of the ‘Blythe Star’, if the captain had reported his position at 5 a.m. or 6 a.m., the times at which I believe he was expected to report, then we would have known within 12 hours of the last known position of the vessel that it was somewhere between a little east of the position where it sank and the next position at which the captain was to have reported. I draw the attention of honourable members to the fact that as late as Sunday afternoon the owners of the vessel were not concerned about its non-arrival, but they were annoyed that it had not arrived on time and that the captain had not altered his estimated time of arrival. In my opinion this is one of the major contributing factors to the reason the survivors were not found at an earlier hour.
In relation to voyage plan and position reporting, these procedures will apply to Australian ships and also to foreign trading ships. The legislation is in the process of being drafted so that we will be able to impose on shipping companies a legal requirement that before a ship leaves a port it shall report to the Marine Operations Centre setting out the route that it will follow. Vessels will also be required to report their positions periodically. To show that this is under way, I inform honourable members that additional staff will be required. We have already approached the Public Service Board seeking approval for the appointment of 3 professional assistant co-ordinators and 7 clerical assistants. Advertisements will appear in next Saturday’s newspapers for the 3 assistant co-ordinators. Advertisements for the positions of clerical assistants appeared in last Saturday’s newspapers. So on this matter the Government has acted promptly, as the Opposition has said. I believe that we have done everything possible to make sure that another ‘Blythe Star’ incident does not occur.
We can all refer to what has happened in the past, but the fact is that the Navigation Act should have been reviewed long ago. These new procedures should have been written into it. I believe that there was opposition from the industry to the introduction of voyage plans and position reporting, probably because one company did not want another company to know where its vessels were, what they were doing and how they were progressing. But we are not concerned with that for the future. Our attention has been drawn to a serious state of affairs and we will rectify it as early as we can. As the honourable member for Mackellar intends to withdraw his motion, I do not propose to deal with it any further. I appreciate his bringing it forward. It has enabled him to put his point of view. It has also enabled other people to put their points of view.
The honourable member referred to radar reflectors. This is a matter which does concern the international maritime world. Maritime bodies are working on it. They are trying to devise a system even to the extent that on life rafts reflectors will be woven into the canopy to create the necessary reflection for radar detection. It would appear that internationally everything that can be done is being done to ensure that incidents such as the sinking of the ‘Blythe Star’ do not occur in the future, and also to ensure that life rafts do reflect radar. I know that one newspaper ran an article on a piece of equipment which Hawker de Havilland Aust. Pty Ltd has.
– An instrument which uses infra-red rays.
– That is right. That company suddenly discovered it had this equipment a month after the ‘Blythe Star’ incident. I was not aware of its existence. If we had been known of it we could have used it. If we had that sort of equipment we certainly would have used it.
– In view of what the Minister for Transport (Mr Charles Jones) has said, I will ask for leave to withdraw the motion. There are 2 important points. Firstly, everything should be done to prevent a repetition of this kind of incident, and secondly, we should look at the possible defence deficiencies to which the Minister has referred. Here is equipment that the defence people should have but did not have. I ask for leave to withdraw my motion.
Motion - by leave - withdrawn.
- Mr Deputy Speaker-
– This will not be quite so friendly.
– I am afraid that the honourable member for Moreton has taken the words out of my mouth. This will not be quite so friendly. I move:
This is a serious matter because the veracity of a Minister is the cornerstone of the credibility of the Government. If the Minister for Labour (Mr Clyde Cameron) is misleading the House then the Government’s credibility is, to that extent, reduced. I want to be definite about this. The most despicable thing that a Minister can do is to give a misleading account of the advice that the officers of his Department tender to him. I cannot say at the moment that the Minister has been guilty of that offence because he may be able to plead that he was ignorant of what went on in his Department. If his explanation is his own ignorance, then this House must accept it. If the Minister did not know what his departmental officers were saying in the advice that they were tendering to him and if he misquoted them, not through malice but through inadvertence, he owes the House an explanation and an apology. The House should, and I am sure will, accept that explanation and apology. If, on the other hand, he did know what was happening in his Department, the matter becomes much more serious. It becomes, as it were, a political hanging offence because a Minister who lies in the House as to what his Department has told him is not fitted to retain his portfolio or, indeed, his seat in the House.
I am quite happy if the Minister is able to convince the House that he did not know what the facts were. I would be quite happy about that. He can offer his explanation and apology, and that will be the end of the matter. If he does not and if he says ‘I knew about it’, he has misled the House and, in point of fact, not putting too fine a point on it, he has lied to the House. I am not accusing the Minister of that. He will perhaps have an opportunity to offer some explanation of his conduct. But let me place the facts before the House.
I think that I mentioned them in the House on 15 November. I will not reiterate entirely what I said then, but I will have to recall the sequence of events because they relate to something which is politically very important, namely, the foundation for the Government’s case in the forthcoming referendum on 8 December. The House will recall that the Prime Minister (Mr Whitlam) said in the House and also outside it that it would be unfair to think of his control measures as relating to wages because over the last 15 or 20 years, I think he said, the share of wages in the gross national product had consistently declined. This was crucial to his case. But it was a false statement. I pointed out to the House the falsity of that statement. I quoted the authentic figures prepared by the Legislative Research Service of the Parliamentary Library from the figures which the Treasurer (Mr Crean) presented in his Budget statement and which were available in official publications.
I quoted those figures. I was most emphatic in this matter. Because of the emphasis that I placed on it, I found myself suspended for 24 hours from the service of this House. It was necessary that the public should know the figures. Those figures had been quoted in this House and were in Hansard. But they had not been widely published. So, within the limits of my resources, I arranged for an advertisement to be placed in the Sydney Press setting out simply the figures as compiled by the Parliamentary Library, which gave the lie to the Prime Minister’s assertions. That happened.
On 16 October, that is, the next meeting of the House immediately after my suspension, a question was asked - I imagine that it was a pre-arranged question, but I could not prove that of course - by the honourable member for Bonython (Mr Nicholls) of the Minister for Labour. It is the reply by the Minister to that question of which I complain as the Minister gave the House a false impression of the real view of one of the officers of his Department. It was a Mr Tilling who was named by the Minister. It is rather important that this should be stated because Mr Tilling, among other things, is submitting a thesis for a master’s degree. One would not want his academic prospects to be distorted or prejudiced by any misdescription of them by the Minister for Labour.
The facts stand out like a sore thumb, if I may use an expurgated expression. They stand out as reported at pages 2134 and 2135 of Hansard of 16 October 1973. I invite the House to look at those pages which record the Minister’s answer. The Minister commenced:
I did see the advertisement this morning. I thought that it was a despicable twisting of statistics to try to cast aspersions on a man whose integrity in this place is without parallel.
I do not think that the Minister was right in using these ironic and sarcastic expressions about the Prime Minister. But let that pass. The Minister, who is at the table, can barely stop laughing even now as he thinks of how he twisted the Prime Minister’s tail with that expression:
Really! I let that pass. I do not wish to tread on these little infidelities inside the Labor Party. Let me not be distracted from the more important aspect of my case. The Minister goes on to show why he alleges my figures are twisted. He states:
My Department informs me that a Mr John Tilling of the Department has been working on these statistics for some time now for a master’s thesis. This work has now reached the point where we are able to make some observations. I would like the House to bear with me while I make them. Mr Tilling worked through a wide range of possible methods. . .
The Minister goes on to show that Mr Tilling found on a 95 per cent probability, according to the Minister, that my figures were a distortion and my statement that the Prime Minister was wrong when he, the Prime Minister stated that the wage share was falling was, and I quote the Minister again: ‘a despicable twisting of statistics’. The Minister has represented Mr Tilling as having worked on these statistics, being still working on them, and having come to a conclusion that the Prime Minister was right. Thas is what he said in the House. I invite honourable members to look at pages 2134 and 2135 of Hansard where the Minister stands on record as saying that.
He went further. Asked by the Opposition, he tabled the paper from which he was reading containing Mr Tilling’s continuing work in the
Department up to date. It has now reached the point where we can say something about it. He tabled the paper. What he tabled was a very curious document because it was not Mr Tilling’s document at all. It was an account by some layman of a lecture given by Mr Tilling in June 1972 in the Australian National University. Mr Tilling has been working on the figures since then, has he not? As he has been working on them, we are entitled to get his up-to-date views. Well, his up-to-date views are contained in a departmental thesis written by Mr Tilling and a Mr Lampe which was circulated for criticism in the Australian National University on 13 April 1973. That I have verified from direct contact with the authorities in the University who were asked to circulate it. The date is important. It is the up to date version.
Mr Tilling has been working continuously, as the Minister for Labour said. Mr Tilling’s work has now reached the point where something can be said about his conclusions. What were his conclusions? They are quoted by Mr Denis James, a Master of Economics on the staff of the Australian National University, who recently published a paper and quoted from the Tilling and Lampe report. I shall read the passage of the report which he quoted, and I am sure he quoted it correctly. He said:
In Federal Parliament, Mr Cameron, the Minister for Labour, claimed that their evidence stemmed from work on the wage share by Mr Tilling. This would appear to be a very loose interpretation of Mr Tilling’s carefully calculated figures.
He went on to quote the departmental report, and I now quote from the Minister’s own departmental report circulated in the Australian National University on 13 April last. It stated:
The evidence appears generally to support the hypothesis of long run stability in distributive share. The gross functional distribution of the national product has not changed significantly in favour of either labour or capital since 19S3-S4. This conclusion is not without importance from an industrial relations viewpoint. Recently many trade union leaders have expressed the view that labour’s share has fallen over the past quarter’ of a century. This attitude may have had a not insignificant effect on the level of industrial disputation in recent years. It is hoped that the evidence submitted in this study will enable a better appreciation of the facts on this question.
The report goes on to give the lie to the figures which Mr Hawke has been quoting up and down the country and which the Minister for Secondary Industry (Mr Enderby) tabled on behalf of the Australian Council of Trade
Unions in this Parliament and which the Prime Minister has apparently adopted.
Those figures are disowned by the technical officers of the Minister’s own Department. That is important, but it is much more important that the Minister gives to this House a quite fallacious version of what his Department has said. As I have said, the Minister may be ignorant of what is happening in his own Department. He may have erred through mistake and ignorance. If so, let him apologise and explain. Let him explain ‘his statement that they have been working on these figures and that they have now reached the point where you can make some observations upon them. They are ‘his words. Let him explain them now. I will say no more. It is up to the Minister now to say that he did not know what was happening in his Department, that what he said was wrong and that the opinion of his Department is different from what he represented it to be because he did not know what was happening in his Department. Let him explain that away or else let him be convicted by this House as a downright and damnable liar.
Mr DEPUTY SPEAKER (Mr Scholes)Is the motion seconded?
– I second the motion and reserve my right to speak later.
– The rather dramatic motion that has been appearing on the notice paper for a few days reads:
That this House requires an explanation and apology from the Minister for Labour for his conduct in misleading it on 16 October as recorded in Hansard at pages 2134-2135. in that he falsely reported the advice tendered by an officer of of his Department.
I first learnt of this notice from my private secretary, Mr Milton Cockburn, who came rushing into my office to say: ‘Have you just heard what has come over the blower?’ The blower’ is what we call the loudspeaker system that transmits into the offices what is said in the Parliament. I said: ‘No. What has happened?’ He said: ‘Mr Wentworth has given notice that he will move a motion’. I have just read the terms of the motion. I went on writing. He said: ‘Excuse me, Minister. Did you hear what has just come over the blower?’ I said: ‘Yes, I have heard you*. He said: ‘But it is requiring you to apologise and explain’. I said: ‘Yes, I know; but you said it was Mr Wentworth, didn’t you?’ He said: ‘Yes, that is right’. I said: ‘In that case, don’t bother me.
Let me go on with my work’. He said: ‘Aren’t you concerned?’ I said: ‘Not the slightest, firstly, because it is Mr Wentworth, and secondly, because the content of the motion is so palpably silly and so easily answered that I would just like to be allowed to continue undisturbed with my reading and my writing, if you don’t mind*.
He retired and excused himself, looking rather embarrassed as, I suppose, on reflection he now realises he had every cause to be for disturbing me when I was engaged in some casual reading just to tell me that the honourable member for Mackellar (Mr Wentworth) required me to offer an explanation to the Parliament and to apologise for saying something that was perfectly true.
– You thought it was so frivolous?
-It was frivolous, but it is not the first time that frivolous motions have been moved by the honourable gentleman in this Parliament. The last motion, which he moved this morning, was very good. I admired him, and I thought that he might maintain in speaking to his second motion the high standard he displayed in moving the first motion. But I was too disappointed really. I did not expect that he would be able to maintain that kind of standard in the second one, because he is not so good. It is just not possible to do it.
Will I offer an explanation to the House? Of course I will. I will always give an explanation to the House of anything I do. In this case, will I make an apology? No. By all means I will make an apology when I am wrong but certainly never when I am right, and this happens to be one of the numerous occasions when I am right in what I say. I am sorry that the honourable gentleman wasted his money in putting silly little advertisements in the daily Press.
– He might have got them for nothing. You never know.
– He could have got them for nothing. That is a possibility. It may be that he was being used as a fall guy for somebody else and that it did not cost him anything. But let us assume, ‘as I am always prepared to do - let us be charitable about these things - that the honourable gentleman did pay and paid the full rates. I can only say that on that assumption it was a waste of money. He did not get his money’s worth. He did not convince anyone, because un fortunately for him the advertisement itself prompted one of my more alert followers on this side of the House to ask a question the very next day. The honourable member for Bonython (Mr Nicholls), who is always alert to the misrepresentations that are so frequent in the daily Press, asked me whether I knew about the advertisement. I anticipated a question coming from the other side of the House, and so I had armed myself before I came into the Parliament with the relevant reply and information that devastated the advertisements and made the honourable member for Mackellar behave in such a way that the House very properly expelled him from this chamber for a period of 24 hours - a punishment which he justly deserved and which, except for the fact that the standing orders limited his suspension to 24 hours, should have been for a much longer period for the disgraceful performance he put on on that occasion.
The honourable gentleman was very good in one way about the case this morning, because he tried to give me an out by saying: ^Perhaps he did not know what was going on inside his Department. Perhaps he did it in ignorance. Knowing the honourable gentleman as I do, I am pretty certain that he would not do what he did deliberately; so if he will just say that he was ignorant of the whole facts and that this is the reason why he misled the House I think the House will accept his apology and explanation’. First of all, of course I do not know of everything that is going on in my Department. I wish I did. There are 4,000 officers employed there. No Minister can be au fait with everything that is happening in his Department, no matter how good he is. I do not know everything that happened in relation to the document referred to but I know more about it than the honourable gentleman, and particularly the Deputy Leader of the Opposition (Mr Lynch) would like me to know. I will say something about this in a moment. The Deputy Leader of the Opposition may leave his pencil alone until I get to him, because it does not suit me to do so now.
Of course, the honourable member for Mackellar is right when he says that a Minister who lies is not fit to hold his portfolio. That is quite right. We thought that ourselves in the last Parliament and in the one before that. We often said it but nobody took any notice of it then. We often caught Ministers from the Liberal-Country Party Government of the day lying and we proved they were lying. We asserted that they were lying. But the rules were different then. The honourable gentleman opposite who now says that a Minister who lies is not fit to hold his portfolio then thought it was perfectly in order for a liar to hold his portfolio. Well, I have not changed my mind. I still believe that a person who lies is not entitled to hold his portfolio. A lie is knowingly to tell an untruth. A person can tell an untruth without knowing that it is an untruth, but if he knows that it is an untruth he is lying and he has no right to hold his position as a Minister.
The honourable gentleman then complained that the figures which the Prime Minister (Mr Whitlam) quoted in this House to show that there had been a decline in labour’s share of the gross national product since 1948-49 were being used by him as a foundation for the Prime Minister’s referendum case. He stumbled upon something which, by coincidence, happens to be a very important fact - that the whole argument in which we are now engaged is really whether we should take 1948-49 as the base year for calculations, taking it up to 1968-69, or whether our 20-year calculations should commence from 1953-54 and end at 1973-74- or from 1952-53 and end at 1972-73. It is a notorious fact that if the 1948-49 figures are taken one gets a different result from that achieved by taking the 1953-54 figures.
The economists explain that this is due to the fact that in 1948-49 we were still benefiting from price control, that therefore it is unfair to take as a starting point a year which fell within the beneficial results of price control, and that we ought to move on to 1953-54 when the evil effects of having no price control began to manifest themselves. The economists say that, by doing so, the comparison becomes economically more accurate. I am concerned not only with the economics but also with the political facts of life. The Prime Minister unwittingly - intelligent though he is - was making a much more powerful point for price control than even he realised, in drawing attention to the fact - again by accident - that the result obtained for a 20-year comparison starting at 1948-49 when price control effects were still manifest is different from that obtained by drawing a comparison with later years when the benefits of price control had passed away.
I was amused to hear the honourable gentleman talk about his poverty and say that he had to draw on his own limited financial resources to carry out his own inquiries and to put this series of advertisements in the newspaper. No one in this Parliament is as wealthy as the honourable gentleman. If his great-grandfather went down to the South Coast and pinched all the good land, good luck to him. I know that the honourable gentleman - this poor man - has such a fabulous property in Sydney and the grounds are so large that he must be the only person with grounds large to run his own kookaburras. How do I know that he has kookaburras in his extensive gardens? I read it in the newspaper. The Leader of the Opposition (Mr Snedden) was addressing some ladies at a strawberry fete there not so long ago. He had said that the Opposition is now picking up ground politically. At that point the kookaburra burst out laughing. Is it any wonder? Of course it had to burst out laughing. The point I am making is not that the kookaburra woke up to the Leader of the Opposition, as most other people have already done, but that the honourable gentleman’s elaborate and expansive private grounds are such that they are able to provide shelter for kookaburras. The honourable gentleman talks about twisting the Prime Minister’s tail. It was the most amusing part of the whole speech. I thought it was excellent. I congratulate him on it. He ought to be on the stage. He would make a first class comedian. I think he is to be complimented on it.
Let me move on to the gravamen of the complaint - Mr James of the Australian National University. It is very significant to me that the study of Mr James made was published in the journal of the Australian Industry Development Association, which is an employers’ organisation. So can anyone suggest that this is not in some way biased? Of course it is. Research into labour’s share of the gross national product was commenced initially in early 1970. The draft report on this initial work was subsequently expanded in the June quarter of 1971. The matter then lapsed until February 1972 when a decision was taken to update and expand research and to hasten its conclusion, with a view to publication later in the year in the Department’s Labour Market Study series. However, it was subsequently decided, on the instructions of the present Deputy Leader of the Opposition who was then the Minister for Labour and National Service - now he may start making notes - that the publication would be deferred. Why did the then Minister decide to defer it?
The reason is that the results were not giving the answer that he wanted.
– That is a lie. I will deal with you in a moment.
– All right. I am telling the honourable gentleman that he asked for this report to be expedited. It was expedited. I am saying that he asked for it not to bc published. I am further asserting that he did that because he did not like the conclusions. In March of this year a slightly amended version of the draft prepared in 1972 was forwarded to the Minister’s office. In April copies were forwarded to a number of academic economists for comments. A copy was forwarded to Dr Hall of the Australian National University and this copy was apparently passed to Mr James. Since then the draft has been revised to take into account the comments received from the academics, to incorporate the latest national earnings data including minor revisions in concept and methodology, and to include the results of further research into labour’s share movements in the early post-war period.
One of the officers involved in the research has been a Mr Tilling. As a result of some early work, Mr Tilling, with the approval of my Department, commenced in 1972 a minor masters thesis at Monash University in the area of functional income distribution. (Extension of time granted). As part of the candidature, Mr Tilling gave a seminar in July 1972. The report of Mr Till ing’s seminar was tabled recently in the Parliament. The results of Mr Tilling’s seminar and the Department’s various draft reports indicate that since 1948-49 the more appropriate measures of labour’s share show a clear and unmistakable downward trend but this decline is concentrated in the 1948-49 to 1953-54 period when the benefits of price control were starting to taper off. As a consequence the various measures show that labour’s share has remained reasonably constant since 1953-54, but the fact remains that there has been a fall - I repeat the words ‘a fall’; I wish the honourable member for Wentworth would stop interrupting my attack and listen to what I am saying - from 1948-49 to the 1970-71 period as a whole.
As I said earlier, the starting point is the contentious issue. The present thinking by officers of my Department is that 1948-49 is the more appropriate starting point. It is also, by coincidence, the starting point which the honourable member for Mackellar used in his calculations. I might further add that my Department is presently finalising a comprehensive and detailed report of the share of labour in Australia in the post-war period which will be published in the Department’s Labour Market Studies’ series. I suggest that further discussion on this matter might therefore be postponed until the Department’s paper is available in the final form for every interested person to read. In deference to the Leader of the House (Mr Daly), I will not read the rest of the other documents I have here in support of my earlier contention of 16 October when I said, quite properly and quite rightly, that labour’s share of the gross national product since 1948-49 has fallen and that the Prime Minister was perfectly correct in putting the figures that he did to the Parliament.
– I am very concerned about the Minister for Labour (Mr Clyde Cameron). What he has said this morning is confirmation of a fear that I have held for some time. The honourable gentleman and I have contrived over a long time now - more than 18 years - despite some occasional political differences to form and to maintain a very close, and very warm friendship. Indeed, some years ago the Minister was so moved by the quality of the friendship as to write a poem about me. It was a poem that touched me very deeply. In recent times the Minister seems to be wilting under the strain. I know that the strain of office is a very heavy one and that people react differently to it. This morning the Minister spoke about his constant attention to his work. He even spoke about being troubled by one of his staff coming into his office and interrupting him in his reading and his writing. That is not the usual behaviour pattern of the Minister.
As an illustration of the Minister’s deterioration and the basis of my concern, may I remind the House of some of the recent observations made by the Minister. He depicted himself, just a short while ago, as being one of the great statesmen of this day. You will be aware, Mr Deputy Speaker, that fantasy manifests itself in a great variety of forms. It can take the form of acute Walter Mittyism - the individual who lives in a world of sheer fantasy. That, of course, can plunge on further to what is described as Bonapartism. Instead of dealing with the very serious matter raised this morning by the honourable member for
Mackellar (Mr Wentworth), the Minister went into a world of fantasy. I will come back to that.
I am trying to help the Minister diagnose what is really wrong and find out what we can possibly do - all of us - to help him to stand up to the great strain of office. Such is the measure of our affection that we would not like to see the honourable gentleman wilt under the strain. Mr Deputy Speaker, you will have noticed - it was, I regret to say, again shown here this morning - that the Minister has such a desperately well cultivated regard for himself. That had never been the case with the honourable gentleman in the past. He has always had such a massive urbanity - almost a disregard - of his own importance and his own contribution to the national Parliament. Why has he suddenly become, as it were, the prisoner of his own elevated assessments? This does concern me. I speak now as one of close friendship and of intimate standing with him. The honourable gentleman - referring to the matter raised by my friend the honourable member for Mackellar - has not dealt with the subject of the debate. That is unusual and quite unlike the honourable gentleman. Of all the relevant minds I have ever encountered in the past, it has always been the mind of the honourable member for Hindmarsh, who is now a Minister of State in Her Majesty’s Australian Government, the Minister for Labour, which has most impressed me. Why has this great relevance of mind suddenly deserted him? Alas, the honourable gentleman was not able to grapple with the problem before him this morning. I say to the honourable gentleman that he should try and relax. If he can relax occasionally he will find that the tensions will not be so great and the aggravation of hypertension will probably slough away. I think he needs a rest, but I will come back to that later.
The honourable member for Mackellar, with characteristic academic detachment, said on 16 October that labour’s share of gross domestic product has increased since .1948 and 1949. The honourable member for Mackellar expressed himself in such robust language on that occasion that it was found that he had to leave the services of the House for a day - a matter that distressed him no end and, speaking for myself, upset me somewhat. What happened the next day? The Minister came into the House - here, Mr Deputy Speaker, is a further illustration of the deteri oration which has taken place with my honourable friend - and used language which was quite unlike him. He does not normally use any sharp, harsh, pejorative language. He is the gentlest of souls. But what did he say of the honourable member for Mackellar? Referring to an advertisement the honourable member for Mackellar had had published in a newspaper, the Minister said that it was a despicable twisting of statistics. I had never in all of my life heard the honourable gentleman use language like that. I wonder why he did so on that occasion? He went on then to speak of an officer of his Department, Mr Tilling. This is the language that my honourable friend the Minister used:
In 21 of 24 regression equations Mr Tilling found that the share of national product going to labour had declined in the 20 years from 1948-49 to 1969-70.
The honourable gentleman always has been a realist. I wonder why a measure of unrealism now seems to be capturing him. He would not for one moment deny that that was the language he used. It is in Hansard. The honourable gentleman always has been an immaculately truthful person and he would not depart from that stand willingly, consciously or with any measure of intent. That is a further expression of my concern. If Mr Tilling had said that, I imagine it would have been able to be confirmed by reference to Mr Tilling’s paper. But Mr Tilling’s paper, with very great respect to my dear friend, does not support the Minister. This is what Mr Tilling had to say in his paper:
Recently many trade union leaders have expressed the view-
I punctuate this to observe that the Minister for Labour has occupied significant trade union leadership positions in the past; we all freely acknowledge that, and we join with the honourable gentleman in at least equating our assessment of his own opinion in that field - that labour’s share has fallen over the past quarter of a century. They have claimed that despite the increasing organisation and development of the trade union movement and despite the increasing proportion of wage and salary earners in the labour force workers have been receiving a diminishing- proportion of the national cake. This attitude may have had a not insignificant effect on the level of the industrial disputation in recent years. It is hoped that the evidence submitted in this study will enable a better appreciation of the facts on this question.
– Who said that?
– That was said by Mr Tilling. It does not merely puzzle me, it worries me desperately - because my honourable friend the Minister for Labour has always had great command of the language and a love for it. He has always observed, with great scruple, anything any other person has written. Why the change? Why the alteration in the pattern of behaviour? The honourable gentleman must realise that Mr Tilling’s paper does not support in any shape or form what my friend has had to say. The last thing I would like to draw to the attention of the House, and of the Minister for Labour, is what his dear colleague the Prime Minister (Mr Whitlam) had to say on 10 October this year and to the remarks made by the honourable gentleman again .this morning. On 10 October this year the Prime Minister said:
The honourable gentleman has offered no evidence to support that contention. The honourable member for Mackellar went to the statistical service of the Parliamentary Library and was given a table which showed quite conclusively that in the last 20 years the contrary is the case. To take the year 1972-73, the proportion of the gross domestic product at factor cost was 61.5 per cent; for the year 1953-54, it was 56 per cent. Since when has delusion ever had anything to do with the Minister for Labour? Why the incapacity to be able to deal with the facts in his customary scrupulous fashion? What has happened? I think that this is a further indication of the tremendous strain that the Minister is under. I would hesitate to seek to describe in any clinical fashion what is wrong because I am not capable or equipped to do so, but I do suggest to the honourable gentleman that at the earliest opportunity he should seek a break from the great cares and strains of office and reflect upon what has been said here this morning by the honourable member for Mackellar. I am sure that if the Minister for Labour could return to his old form, he would say to the honourable member for Mackellar: I am sorry for the mistakes I have made. It distresses me no end, but now that I am hale and hearty again I am ready to take up the reins of office.’
– I think that what the honourable member for Moreton (Mr Killen) has been saying in this House today in regard to the Minister for Labour (Mr Clyde Cameron) is that, really. the Minister is suffering a tremendous strain. This fact will be apparent to all honourable gentlemen on both sides of the House who have listened to this debate and who obviously understand that the Minister for Labour came into the House with a very brief prepared script of about 2 or 3 pages when he knew full well that this debate had been foreshadowed over a long period. For him to come in here protesting vainly that he had not had any notice that the matter was to come before the House really does not stand easily with the facts. The Minister knows full well that the use of statistics in the selective manner in which he has used them simply distorts the whole purpose, point and reason why he sought to make comment on this matter in the first place. I can well understand why the Minister is suffering and labouring under so great a strain. After all, he is a Minister who has presided over a major period of increase in industrial dislocation and turmoil. This is well understood by honourable members from, I hope, both sides of this House. He has been labouring greatly in terms of his own legislation.
In regard to the overall question of the trends in labour’s share of the national product in post-war Australia, I do not seek this opportunity today to address myself to that question in depth. In fact, an adequate canvass of the real issues concerned in what is a very basic question of economics in this country does not enable a proper judgment to be drawn . because the facts cannot be drawn out in the period which is available for the matter to be debated in this House. But this much can be said: On 16 October, the Minister for Labour came before this House and alleged that labour’s share of the national product had declined in the post-war period. In the course of his argument he sought to put the matter beyond debate by stating:
The choice of different bases to the statistical series does not affect the nature of the results of the study.
This is a statement by a Minister whose reputation for statistical analysis was made on the basis of an employment crisis as predicted by him at the beginning of 1973. The record shows this extrapolition of employment statistics led him to conclude that unemployment levels in January of this year would reach 200,000. 1 believe that he stands indicted on the total absurdity of the claim.
– He should apologise.
– Of course he should apologise. He stands indicted on the total absurdity of the statistical judgments- and forecasts he made at. that time and the absurdity- of the propositions which he has sought to argue in this House.
The Minister’s assertion that the choices of different bases to the statistical series does not affect the conclusion which can be drawn from an analysis is, of course, simply untrue. The choice of the base year is vital. An examination of the empirical evidence reveals a significant decline in labour’s share of the net national product during the period 1948-49-
– What does empirical mean?
– I will be happy to lend to the honourable gentleman a book on economics so that he can study the base terms. He might find that reading more profitable than the reading to which he referred this morning. An examination of the empirical evidence reveals a significant decline in labour’s share of the net national product during the period 1948- 49 to 1953-54 and particularly during the period 1951-52 to 1953-54. This in fact points to the reason why the Australian Labor Party, including the Minister for Labour and Mr Hawke, choose to begin any analysis in the year 1948-49 rather than in 1953-54, which is the year chosen in most responsible economic analyses. Mr Hawke is well known to the Minister for Labour as a past master of his and a continuing master at present of many of his policies. I was amused by the recollection that the Minister allowed Mr Hawke to leave the country before he released to this country news of the inquiry into industrial relations, a fact which is not without significance but on which I will not bore the House because the Minister knows it to be a fact of life.
It is clear that a responsible economic analysis will confirm that it is preferable to select 1953-54 as the starting point. I hope that the Minister for Labour will not cavill at this point. During his exposition to the House he relied very heavily on Mr John Tilling’s work. I think it is appropriate to quote from Labour Market Studies No. 4’ produced by the Department of Labour, a document which I have in the House. I am not even sure whether the Minister has seen the total document. Perhaps his Department has not drawn his attention to it, or perhaps he is prepared to ignore the totality of what is in the document because, certainly, the whole tenor of this document does “not accurately reflect what the Minister has been saying in this House. The Minister no doubt would be aware that Mr Tilling is a co-author of the document. Chapter 1 contains- the following conclusion:
Thus, the early post-war period can be viewed as an economically unstable and abnormal period in which labour’s share was abnormally inflated and only returned to more normal leyels in 19S3-S4. Because of these abnormalities in’ the early post-war period, which held labour’s share at an inflated level, it was decided to commence the analysis at 1933-54.
This is the same Mr John Tilling upon whom this Minister has relied so heavily in drawing selectively from the information which is available to him. The Minister would be aware of the factors which led the researchers in his Department to select a statistical period quite contrary to that chosen by his colleague Mr Hawke, which no doubt commends itself to the Minister who shares the same sense of bias about these matters.
What are the factors which really come into this issue? They are, firstly, the dismantling of wartime price and wage controls during the period on which the Minister hangs his hat; secondly, the low level of productivity growth due to low levels of private fixed capital investment during the war; and, thirdly, the repressed demand for consumer and capital goods arising from wartime restrictions which resulted in considerable demand pressures combined with a tightening labour market. The general effect of these factors resulted in increases in earnings far ahead of gains in productivity and prices. After 1948-49 the labour share remained at an inflated level. Once again, there were a number of basic reasons for this. Firstly, this was a period of unprecedented wage inflation. Competition for scarce labour forced wages up to very high levels. Secondly, competition from imports from 1948 to 1952 restrained profit margins and maintained labour’s share. Imports increased by over 50 per cent during this period.
In short, economic conditions conducive to the restoration of traditional profit margins emerged only in 1953-54. It should also be observed - and this should not be lost on the Minister - that the abolition of automatic cost of living adjustments to wage rates by the Conciliation and Arbitration Commission in 1953 also eased the inflated share held by labour. I seek leave of the House to incorporate in Hansard Table 2.1 contained in the document ‘Labour Market Studies No. 4’.
– Is leave granted? -
– Leave is granted. (The document read as follows) -
– This is the table and the document to which I have referred previously. I reiterate that the author of that document is Mr John Tilling, so admired by the Minister for Labour. The table is entitled ‘Trends in the Labour’s share - By Industry Groups: Net National Product Measure.’ This table shows firstly that Labour’s share calculated for all industries has increased in the period 1953-54 to 1969-70 from 72.4 to 76.2 on an unweighted and adjusted basis and from 71.8 to 74.5 on a weighted and adjusted basis. A point which must be emphasised is that the Minister for Labour avoided drawing the attention of the House to a particular paragraph in the report which he tabled on 16 October. That paragraph states:
Mr Tilling on the other hand did not seek to justify his starting point at 1948-49 apart from the fact that it coincided with the introduction of more comprehensive national accounting data by Census and Statistics.
This is clearly unsatisfactory. This lack of justification cannot be compensated for by the use of the technique advanced by Professor Phelps Brown to adjust statistical data for structural changes in the Australian economy.
The simple fact is that if you look, at the evidence available, it is apparent that wage earners as a group have been obtaining in recent years relatively higher increases in their incomes than have the other major groups in the Australian community. This can readily be shown by reference to the proportion of the gross national product going to wages and salaries.
I shall seek the leave of the Minister for Labour to enable the incorporation in Hansard, together with the other document, of Table D of the exhibit in the national wage case of March 1972. The exhibit is headed Wages, Salaries and Supplements as a Percentage or Gross National Product at Factor Cost’. This, of course, is a public exhibit. I should be happy to show it to the Minister. I ask that leave be given to incorporate the document in Hansard.
-Is leave granted?
– I am just looking at the document. This is a document prepared by the McMahon Government. Yes, I will let it be incorporated so that I can criticise it later.
– Leave is granted. (The document read as follows) -
– I would be grateful if the Minister were to direct his critical faculties to this document. Clearly he cannot read the documents which are available to him. If he looks at the document he will find that it was not a product of a particular government. The source is the Commonwealth Bureau of Census and Statistics. Maybe the Minister wants to cast aspersions on the objectivity of that group. I hope he would not be prepared in this House to go so far. I should also like to take the opportunity to quoting from Mr Tilling’s work ‘Labour’s Share of National Income’. The conclusion to which he adverts is this:
Firstly, the evidence appears generally to support the hypothesis of long term stability in distributive shares. This conclusion depends to a critical extent, however, on the particular measure employed and on the period chosen. Unfortunately, the number of possible measures is very large and the merits and demerits of each measure are to some degree a matter for judgment and depend in part on the uses intended. No single measure is perfect in itself and the best measure for one use may not necessarily be the best for another use. If the main reasons for studying the trend in labour’s- share are to assess the degree of long term stability in profit margins and to assist judgment on the equity in distribution, it is considered the most appropriate measures are those set out in section 1 of the document in chapter 2; it is in terms of these 3 measures that the conclusion reached was that labour’s share had shown a broad tendency towards long term stability in the postwar period.
The point made by Mr Tilling is clearly contradictory to that with which the Minister is seeking .to weary the House.
– Can I have a look at that document you are quoting from?
– I know that the Minister is desperate to have a look at the document because he is reading from a large telex message which he is finding very difficult to understand. I suggest that if the Minister wants to see the document he might ask his Department to provide it to him. I would also commend to the Minister’s attention a re-reading of the paper produced by Mr Dennis W. James, Master of Economics at the Australian National University. Of course, it is issued by the Australian Industries Development Association, but that should not generate an undue sense of hostility and suspicion such as that which the Minister has reflected this morning. If there is one thing that is worrying the people in this country, it is the extent of the anti-business bias that this Government has been reflecting all too often.
I commend that document to the attention of the House. It again indicates the total economic absurdity of the proposition which this Minister has recently endeavoured to argue in this House in recent days. I hope that if the Minister is serious in his claims he will be prepared to have a general debate on this subject at another time convenient to the Leader of the House, and the matter can then be comprehensively examined. I support the motion which has been moved by my very distinguished colleague, the honourable member for Mackellar. Clearly, there is an explanation and apology owing to him and I hope that the Minister, in order that we should not take up the time of the House by voting on a division, will be prepared to extend the courtesy to the honourable member for Mackellar and avoid the necessity for that type of circumstance.
Mr CLYDE CAMERON (HindmarshMinister for Labour) - Mr Deputy Speaker, I wish to make a statement by way of personal explanation.
-Does the Minister claim to have ‘been misrepresented?
– Yes. I have been misrepresented in 2 ways. First of all, the Deputy Leader of the Opposition said that I made an assertion that there would be 200,000 people unemployed by January of this year. He is quoting me right out of context, as he very well knows. I made the statement before the election and I said then: ‘If the McMahon Government was returned there will be an increase in the number of people out of work, up to a total of 200,000’. Of course, I was right in my assessment. The only thing that proved me to be otherwise wrong was that the electors had the good commonsense to reject the McMahon Government and to see that it could not get back again.
The other thing is that the Deputy Leader of the Opposition said that I cannot even read this telex. That is not true. I have been misrepresented. What the telex says is that it is also true that the April 1973 draft, from which the honourable member was quoting, said that in one context the most appropriate series to look at is series 4. But then the telex, which the honourable gentleman said I could not read, goes on to state:
In the light of their further detailed research since April 1973, and in the light of the comments they have received in response to the circulation of that report, they now no longer believe that the phrase quoted above is correct, even in the single context previously referred to. The final report, which should be available towards the end’ of this year, has been extensively updated and revised, and I hope will prove of great interest to Mr Wentworth and to other people.
I can read the telex, but it is too long to read out in full. The honourable gentleman may be assured that I can read every word of it.
Mr WENTWORTH (Mackellar)- Perhaps I could make a personal explanation following on what the Minister has said. I have ascertained from direct inquiries in academic sources that the authors of this document had not desired to change their view. They are departmental officers. It looks as though the Minister has brought improper pressure to bear on his departmental officers and has compounded his own offence.
Question resolved in the negative.
Bill returned from the Senate with amendments.
Bill presented by Mr Lionel Bowen, and read a first time.
That the Bill be now read a second time.
The main purpose of the Bill before the House is to amend the States Grants (Advanced Education) Act 1972-73 to enable the Australian Government to assume full financial responsibility for advanced education from 1 January 1974. This is part of the Government’s intention to assume financial responsibility for all tertiary education. The States Grants (Universities) Bill (No. 3) 1973 was introduced into the House recently to implement this policy with regard to university education. The assumption of full financial responsibility for tertiary education includes the abolition of tuition fees at all tertiary institutions including colleges of advanced education. Already this year, grants have been made for financial assistance to students in need at colleges of advanced education and universities, and this legislation will enable the Government to step closer to its goal of promoting equality of educational opportunity for students intending to undergo tertiary education.
The Premiers of all the States have agreed to the major policy change which is incorporated in this Bill. In addition, the Bill provides for a number of other matters which are being implemented as a result of Government decisions. There is provision for supplementary grants to colleges to meet the increased costs of academic salaries resulting from the acceptance by the Government of the recommendations of the report by Mr Justice Campbell, and to meet the cost of increased salaries and wages to college staff following the national wage case decision of May 1973. The Bill enables payment of grants in respect of fulltime university students who are resident in a hall of residence at a college of advanced education. In accordance with the Government’s plans the Bill provides for grants for special courses in dental therapy, social work and physical education at various colleges of advanced education.
The main amendments to the Act have been to sections 5 and 6, dealing with recurrent and capital expenditure. It is no longer necessary to include provision for State contributions for 1974 and 1975 in section 5. Under section 6 of the principal Act capital projects in colleges are funded in equal proportions by the States and the Australian Government over the whole triennium. Under the new matching arrangements the States have agreed to provide one third of their share of capital expenditure for the 1973-75 triennium. Under section 8 of the principal Act colleges are provided with per capita grants for college students living in collegiate accommodation. This amendment provides for the allowance to be paid in respect of university students living in college of advanced education residences; an amendment has been included in the recently introduced States Grants (Universities) Bill to provide for advanced education students in university residences.
With the acceptance by the Australian Government of the full responsibility for funding tertiary education from 1 January 1974 the entire cost of construction of a student residence in a country area may be borne by this Government, and in the case of affiliated colleges this Government will now meet 75 per cent of the cost of construction leaving as before only 25 per cent to be found by the college authority. In addition, where the building of student residences may be funded in part by a repayable loan, this Government is prepared to contribute $2,500 in respect of each place provided so that students may have the benefit of a good standard of accommodation at a reasonable weekly rental.
In accordance with the Government’s decisions other grants have been provided. Honourable members will recall that early in the life of this Government substantial assistance was provided for the extension of training facilities for dental therapists. In some States, the new training schemes are being conducted by the Department of Health. In Western Australia, however, the Western Australian Institute of Technology accepted additional students into its dental therapy course from the beginning of 1973 and provision has been made for $248,000 to be paid for their training. The Government has also agreed to provide $800,000 for courses in social work and physical education at the institute of technology at Preston and Footscray in Victoria.
Apart from providing for Government initiatives in the fields of social work, physical education and dental therapy the basic programs recommended by the Australian Commission of Advanced Education in its third report and the teacher education report remain unchanged. The additional cost to the Australian Government for the 1973-75 triennium resulting from salary increases in the colleges and the assumption of full financial responsibility for the colleges, including the abolition of tuition fees, will be approximately $328m. I commend the Bill to the House.
Debate (on motion by (Mr Sinclair) adjourned.
Debate resumed from 10 October (vide page 1829), on motion by Mr Grassby:
That the Bill be now read a second time.
– Mr Deputy Speaker, may I have the indulgence of the House to raise a point of procedure on this legislation. Before the debate is resumed on this Bill I should like to suggest that it may suit the convenience of the House to have a general debate covering this Bill and the Wheat Export Charge Bill, as they are associated measures. Separate questions may, of course, be put on each of the Bills at the conclusion of the debate. I suggest, there fore, Mr Deputy Speaker, that you permit the subject matter of the 2 Bills to be discussed in this debate.
– Is it the wish of the House to have a general debate covering the 2 measures? There being no objection, I shall allow that course to be followed.
– The Wheat Industry Stabilisation Bill comes before this Parliament at a time when throughout Australia many farmers unfortunately are not harvesting the crops for which they had hoped. However, they are harvesting quite significantly large crops which are proposed to be covered by this legislation. Of all Australian rural industries the wheat industry is one of the first to be subject to the short-term ad hoc approach which regrettably this Labor Government introduced after it came into office. At the time of the change in government the Australian Wheat Federation had already initiated discussions with the preceding Government to devise ways and means by which the 5-year stabilisation scheme could be renewed. Sir Allan Callaghan, the former chairman of the Australian Wheat Board, had been commissioned by me to look at the general nature of assistance available to the wheat industry. As a result he produced a report to the Department of Primary Industry. In addition, the Bureau of Agricultural Economics had provided statistical analyses of the relevant state of the wheat industry. I think that we all accepted that it would be necessary to make some changes to wheat stabilisation.
I recognise the difficulties the new Government had in coming into office. But my first comment about the wheat industry is to note the deficiencies of appointing as Minister for Primary Industry a man who had not previously been a spokesman on primary industry. Irrespective of his personal qualities, he was, from the beginning, virtually well and truly behind taws. The difficulty he found was that he just was not able to introduce any sort of positive legislation in the short-term. The legislation now before the House in fact reflects the unfortunate consequence of appointing as Minister for Primary Industry a man who had not been a spokesman on primary industry and who apparently had had little interest in wheat matters when previously they came before the Parliament. From our point of view, and this has been expressed on earlier occasions, we regard it as equally unfortunate that he should have been a representative in another place rather than in this chamber. He is in a place where we are not able to ascertain from him the implications of statements that he makes or of policies that he introduces.
The wheat industry was one of the first of the primary industries to be subjected to the sheer lack of knowledge and the problems that he had in trying to pick up the reins of a department without having any fundamental ideas about the ground rules. Unfortunately, the problems were aggravated by successive statements he then made around the world giving his attitude towards the rural industries and people in the wheat industry, as in many other sectors of the primary industries, were beset because they were not too sure just what his intentions were. Honourable members will recall that when he attended the meeting of the Organisation for Economic Co-operation and Development in Paris early in the year he made a pronouncement which indicated that there would be quite radical changes in any future wheat stabilisation scheme. He was not telling us what they were but was saying generally that the wheat industry would have to stand on its own feet in the future. The trouble was that he had not realised that the wheat industry has been standing on its own feet for a long time. Indeed the very product of the stabilisation scheme that he is now extending is to place on the wheat industry quite significant responsibilities, but I want to come to them later. Initially I point out that this statement by the Minister for Primary Industry indicated that he did not really know what wheat stabilisation was all about.
The second criticism I make relates to the statements that were made by the Minister for Primary Industry in Australia questioning the value of Government assistance to rural industry generally, particularly to the wheat industry. All this seems quite anomalous when one considers that early this year the industry itself will be subsidising the Government quite significantly, both in terms of the differential between the price of home consumption and export wheat and also in terms of payments to the stabilisation fund. A third area was in his direct interference and tampering with marketing arrangements of the industry. This was not peculiar to the Minister for Primary Industry, and again I want to say something later about the Minister for Overseas Trade (Dr J. F. Cairns). There are 2 particular problems that concern honourable members on this side of the House - firstly, the intervention in sales to China and secondly, the intervention in sales to Egypt. The fourth area is the incredible bungling that the Labor Government committed itself to, and the Minister in particular committed himself to, over the provision of funds to control weevils in Australian storage around the various ports and inland.
Honourable members will recall the occasion when the Minister went along to a meeting with State Ministers. That meeting was predominantly called to consider wheat stabilisation. The State Ministers for Agriculture and the Minister for Primary Industry in Queensland had come to the meeting expecting the principal subject to be the detail of what the impending wheat stabilisation arrangement would be. The Minister came in and said that he was very concerned - I understand his concern - about the problems of weevils in grain stored around the country. He said he felt that there needed to be some type of accelerated campaign of eradication. That was a very commendable thought. The problem was that he said that his Government was so concerned about it that it would provide $500,000 towards a fund provided that the States and the wheat producers were prepared to contribute $250,000 each. The tragedy was that he had not bothered to discuss the proposal with the Treasurer or with his own Government. The proposal that came out at the meeting with the State Ministers was of prime importance. It was more important apparently at that time than the details about wheat stabilisation. But it finished with him not being able to get the approval of his colleagues in the Federal Government to the appropriation of that $500,000.
The Minister has been around the country saying that he is very sympathetic to the interests of primary producers but of all the statements he has made this, to me, is the most alarming. There is no use any member of the Labor Government coming out and saying: ‘Look, I am terribly sorry but the Government has decided to do this. I know I am a member of Cabinet. But do not worry about it. I really spoke up very strongly for you’. That is utter ballyhoo. Every one of the Ministers in the Labor Party is a member of Cabinet - how it works I still do not know; frankly it does not work too well - and every one of them has an opportunity to speak around the Cabinet table. If any one of them gets up in a public place and says that he is very sympathetic, be it to the wheat industry, to the wool industry, or to any other sector of any other industry, and Government policy does not accord with what he says, if he is true to his convictions he should resign. The only basis under a Cabinet system of government existing in this country on which any man, as a member of Cabinet, can accept a decision by the Government is that he is in agreement with that decision.
– Why did you not resign?
– I am glad that the honourable member intervened in that way. I have never stood up in a public place as a Minister and said that I disagreed with a decision of a Cabinet of which I had been a member, nor should any member of any Labor Cabinet do so. For this Minister for Primary Industry to say: ‘Oh, I came out and spoke strongly in favour of $500,000 for weevil control’, or I spoke very strongly for something else in relation to primary industry but I was rolled in Cabinet’ is utter nonsense.
– Who said that?
– Your Minister for Primary Industry put forward to the State Ministers for Agriculture a proposal that, if they provided $250,000 and the industry provided $250,000, he and the Commonwealth - the Cabinet of which you are a member - would provide $500,000 to supplement it and there would be $lm advanced for weevil control in the Australian wheat industry and all would be well. He put his head on the block when he said that he would provide it. He went to Cabinet and was rolled. It is of no use him saying, be it in that area or in any other area, that he is sympathetic to rural industries. The product of the Budget, the product of this wheat stabilisation scheme, which is an ad hoc oneyearextention, a and the product of any other of his rural policies, demonstrates either that he is not interested in rural policy and he really just accords with Labor Government policy, or that he is either not competent or not able in Cabinet to have his point of view accepted, or that he really is not prepared, as a member of the Labor Cabinet, to accept responsibility for its collective decisions. Any one of those 3 positions can be taken by the Australian people but as far as I am concerned a man who is a Minister, if he is unsuccessful in Cabinet, cannot say that he presented some alternative point of view and really is sympathetic to the rural industries, because it just is not a fact under our Cabinet system. Any member of Cabinet must be bound by collective decisions. I do not regard it as possible for any member of Cabinet to assert a point of view that is at variance with that which is held by his Cabinet colleagues.
At the present time throughout this nation thousands of Australian wheat farmers are harvesting their crops. So this piece of legislation is particularly important. Within a few more months the same farmers will begin breaking up land for fallowing, into which next year’s crops will be sown. They still do not know the terms and conditions under which that particular crop will be sold, nor do they know what sort of a scheme is going to be applied to it. They do know that, because of the high world wheat prices and because of the wheat export tax which is the subject of one of the measures before the House at the moment, they will be required to pay in significant sums, considering the variance between the export price at the moment and the home consumption price, which may or may not be held for a beneficial stabilisation scheme. I say ‘may not be’ because already the Minister for Primary Industry is asserting a point of view that shows that there will be significant limits in the future on the amount of the funds that will be provided by the Labor Government for wheat stabilisation.
It is commendable that there should be discussions between the Australian Wheat Growers Federation and the Government to determine what the new wheat stabilisation scheme should be. The wheat farmers know already that they are providing a substantial subsidy for Australian consumers of wheat. It is important for the wheat farmers - who know already that they are paying, and are going to continue to pay under the terms of this legislation, sums into the Treasury in order to offset future wheat stabilisation arrangements - to know what terms and conditions are to be applicable to them for the future and it is important for the Australian taxpayer to realise that the Australian wheat grower is in a position where he is not doing other than paying a significant price in order to get the guarantee of stabilised income which is the whole motivation of this legislation.
Sitting suspended from 1 to 2.15 p.m.
– ‘Prior to the suspension of the sitting I was addressing the House on 2 Bills which are being debated together and which relate to the introduction of a short term extension of the wheat industry stabilisation legislation. One of the Bill provides for the application of certain wheat export charges which requires wheat growers to pay a significant contribution to the Australian Wheat Board if, as is now the case, the export price for wheat should be higher than the guaranteed price by a margin of some 5c to offset future payments under the guarantee. The other Bill relates to the extension of the stabilisation scheme itself. As I explained previously, we on this side of the House are concerned at the implications of several aspects of the Bill. Our first concern is about the one year extension. We are concerned at the suggestion which has been made by the Government which will somewhat restrict the general character of future wheat stabilisation arrangements. We are also concerned about the ministerial direction that is involved in the Bills.
One thing of which I think honourable members generally are aware and which sets a somewhat different climate for wheat stabilisation today from that which has prevailed in recent years is the very buoyant conditions that are generally applicable to al! grain sales throughout the world. There is no doubt that if the Liberal-Country parties were in power, wheat farmers generally could look forward to a very bright future. One of the things that concerns me is that the Pandora box of goodies that the Australian Labor Party has offered seems to be concentrated on a wheat sale which supposedly has been negotiated by the Minister for Overseas Trade (Dr J. F. Cairns). Of course, it is true that the representatives of the Australian Wheat Board when they visited China last year had an offer to enter into a long term wheat contract. It is also true that this year they were offered a contract significantly greater than that which was offered last year. Indeed, if wheat had been available they could have negotiated a much greater wheat sale last year. It was not only last year that the Wheat Board has been in contact with the agency which in fact negotiates contracts for the sale of wheat to the Chinese. The Board has been in constant and continuing discussion with the officials of the Chinese Government, and there is a very close commercial relationship between them.
One of the factors about which I have been speaking which concerns me is the intervention which this Government likes to take at a political level without regard to the interests of the wheat growers. That is another one of the elements of our concern - the contrast between the projected position of the Australian wheat farmer under Labor, and the position which the wheat farmer would enjoy were we in office. Of course, that sets aside altogether the particularly onerous anti-rural legislation for which the honourable member for Robertson (Mr Cohen), who is seeking to interject, was in part responsible. The application of the taxation provisions in the Budget deny the wheat farmer the chance to spend money on property development; they deny those who this year might reasonably expect a good income the opportunity to put that money back into property development. Those of us who have been associated with rural indusries know something of the very traumatic circumstances surrounding poor prices, bad seasons and the problems that many Australian wheat farmers have faced. To see the prospect of a reasonable return this year completely negated because the Labor Party has decided that it will kick farmers to death, is not really much of a bonus for the farmer who, for the first time in a long while, has enjoyed the conjunction of good seasons and reasonable prices abroad.
I shall return for a moment to what I was saying previously. The uncertainties of the policy making of this Government are known throughout the business community. Every Australian is saying: ‘If you want to know what to do tomorrow, do not ask the Labor Party because it does not know itself. Unfortunately, the Labor Party is in office and we have to live within the climate that it sets for us, and that general climate is reflected in the one-year extension to the wheat stabilisation scheme for which the Wheat Industry Stabilisation Bill and its parallel Bill provide. The concern about the future is understandable, and I believe that most wheat growers see that as the most regrettable aspect of this extension. It is unfortunate that in the extension no escalation has been provided for the home consumption price of wheat to match increasing world prices. All of us know that the formula which the Bureau of Agricultural Economics produces each year takes a number of elements into account. Unfortunately, this one-year extension does not take into account adjustments which would enable wheat farmers to enjoy some general escalation in the price of wheat sold at home. The position is even more anomalous when one considers the present position applying throughout the world. Wheat and grain prices generally are very high, ensuring for that proportion of the Australian wheat crop sold abroad a much higher price than that paid for wheat at home.
I read this week a letter which a wheat grower wrote to one of Australia’s newspapers, in which he complained about the very significant subsidy that wheat growers were providing for the Australian public. The wheat grower accepts the position that in the past payments have been made both ways: The wheat grower has made payments to the Australian wheat consumer and, equally, the Australian wheat consumer has made payments to the wheat growers. It is unfortunate that other people in the community do not realise that there is this 2-way deal as far as the producers of agricultural products are concerned. Wheat stabilisation is one of the most significant areas. For example, the home consumption price is about 70c per bushel less than the current world wheat price. In other words, a very significant subsidy is provided by the Australian wheat grower to the Australian consum’er on every one of the 70-odd million bushels of wheat sold on the domestic market. In return, the Australian wheat grower expects that there should be a reasonable understanding of the necessity for some long term stability in his income. Tragically, the Bill which we have before us provides that stability for only one year, and it is that aspect as much as anything which concerns the Australian wheat growers. We in the Australian Country Party, together with our Liberal colleagues, are concerned about that aspect of the Bill.
The Government generally has ruthlessly penalised the rural sector. It has taxed the rural sector inordinately. It has reduced the confidence of farmers to expand. It has withdrawn government incentives and played with commercial negotiations made on behalf of the industry. The legislation now before the House is, of course, only a one-year extension of the previous legislation, and that gives nobody any confidence as to what the future might hold. The wheat legislation had its genesis when government got together with the industry in an effort to iron out the very savage fluctuations in prices that growers suffer from year to year, considering the variation in world market conditions and our dependence on those world markets. By the operation of the scheme, stability has been given to the industry, and I pay full tribute to Mr Pollard, a former Labor Minister who introduced the scheme. It is unfortunate that the present Minister for Primary Industry does not know as much about the industry as did Mr Pollard.
Basically, the legislation contains elements which are quite commendable and it is because, in the balance, there is in the legislation so much that is good for the industry that we on our side of politics have provided over the last 23 years successive new 5-year extensions of the wheat stabilisiation scheme. We have changed the elements relating to the percentage of the crop that is sold abroad at a guaranteed price. We have provided variations in the price of wheat sold for home consumption, and we have provided variations in the export price of wheat. We have done that taking into account the advocacy of the industry and the interests of the Australian consumer. The legislation which we are now discussing just has not done that. It is only a mark-time piece of legislation. As I explained previously, it is most unfortunate that the Minister for Primary Industry was not as sufficiently au fait with the problems facing the industry as would be the Minister for Northern Development (Dr Patterson) who is now at the table. Having been spokesman for the then Opposition on primary industry matters, he knows something of the problems facing the wheat industry. The present Minister for Primary Industry (Senator Wriedt) does not know of these problems. Consequently, the Bill before us reflects his inability to cope with the sort of long term guarantees of security that the wheat farmer needs. It is that absence of long term security that I regard as the most regrettable feature of this present legislation.
Previously I referred to the problems that we have encountered in the general intervention by the Labor Party in wheat contracts. The Minister for Overseas Trade claims that it was his intervention alone which resulted in the 3-year wheat contract with China. Certainly successive negotiations have been conducted by the Australian Wheat Board, representing the wheat industry as a whole, and some of those negotiations having been more successful than others. One of the elements that has to be taken into account, however, is the price that has been paid for and the availability of Australian wheat. At the moment wheat is in short demand throughout the world and anybody who thinks that the sale to China was negotiated in a market where the Chinese were other than willing buyers knows nothing of world market conditions.
– That is unfair.
– It is not unfair. Indeed it reflects exactly the circumstances in the sale of wheat throughout the world. China wants to buy our wheat, as indeed do so many other countries. If one looks at the demand for wheat, both for human consumption and for stock feed purposes, one will see that there has never been a time when world grain stocks have been lower and when there has been a higher price available in all world markets to meet the very real demand for grain in response to this overall world shortage. It is in that climate that the Minister for Overseas Trade decided to intervene in what was a strictly commercial negotiation. As a result he came back to Australia and said: ‘Here am I, the saviour of the wheat industry.’ That is utter nonsense. The Minister for Overseas Trade came into the deal, as did the Minister for Northern Development as far as sugar was concerned, after the industry concerned had already ‘been involved in negotiations. The sugar industry had negotiations with Japan. It had negotiations with China. There were sales to China before the Labor Government came to office.
-Order! The honourable gentleman may make a passing reference only to the sugar agreement. It has nothing at all to do with the Bills under discussion.
– As far as wheat and other agricultural commodities are concerned, sales to countries abroad have been effected by the industry representatives. The intervention by Ministers of this Government is unjustified and has not contributed to achieving better returns for the producer; on the contrary it has seriously prejudiced the producers’ chances of getting better returns. These blackmail threats that the Minister for Overseas Trade applied to future sales indicate the mentality and attitude of this Government. When he came back to Australia he said: ‘If there is a change of Government there will be no further wheat sales to China.’ Perhaps he has failed to recognise that a member of the Australian Country Party, the honourable member for Moore (Mr Maisey), was a member of the first Australian Wheat Board mission that secured the first sale of wheat to China. Per haps the Minister is not aware that the average quantity of sales that the Wheat Board - not the Government - on behalf of the Australian wheat grower contracted for with the Chinese instrumentality that purchases wheat is in fact less than the quantity that has been sold to China by the Wheat Board in the past on a significant number of occasions. In other words, this great saviour of the wheat industry, in spite of his political affiliations, has not been able to secure as good a deal in the quantity of sales as have past Wheat Board negotiators operating under the climate of a Liberal-Country Parry government.
As to the price, of course that is a matter that is privy between the Wheat Board and the purchaser, and so it should be. I trust that, whatever the price might be, we have not been sold down the drain by the intervention of the Minister for Overseas Trade, as I suspect we might have been in the sale of sugar because of some of the interventions of the Minister for Northern Development. However, I think it is true to say that the wheat growers themselves are concerned about future intervention in the wheat industry. Accordingly, we are concerned about that aspect of the existing legislation which provides that the Wheat Board can be directed by the Minister in its. functions and in the exercise of its powers. At the appropriate stage in the Committee deliberations on this Bill I intend to move an amendment which will ensure that in future that intervention can relate only to an assurance that the level of price and the conditions associated with the wheat sale provide a reasonable market return for the wheatgrower. In addition, I intend to provide in that amendment a proviso to the effect that after such intervention has been exercised the Minister shall have an obligation to table in the Parliament within IS sitting days of his having so intervened the reasons for having done so. That, to my mind, is the only basis upon which a government or a Minister on a Government’s behalf is justified in intervening in the operations of what has been one of the most successful commodity boards.
There is a very real fear on the part of some of my colleagues that perhaps we should go further with the second piece of legislation, the Wheat Export Charge Bill, and that we should refuse it passage until such time as it provides a long term wheat agreement for the Australian wheat grower. The Wheat Export Charge Bill is in fact the measure which enables the allocation of that part of returns for overseas sales in excess of 5c above the guaranteed reserve to be held by the Wheat Board on behalf of wheat growers and to be used to offset future stabilisation payments at such times as overseas price returns fall below the stabilised minimum price. That is a point of view for which I have some sympathy. I am concerned that this Government has introduced a one-year extension of the Bill, that it has provided for the deduction from the funds received at a time of very high world prices and that there is no guarantee for the grower that the funds will be applied in his best interests in the future. Indeed the very indication that the Minister for Primary Industry has given in regard to an upper limit on an annual contribution by a Labor government to the wheat industry makes me concerned that the Wheat Export Charge Bill should provide for such significant deductions without any guarantee that the long tern; stability of the industry is to be assured.
As I have explained, it is not only the amount of the actual deduction that is of concern to the Australian wheat grower. There is already a very real subsidy provided by every Australian wheat grower for every Australian wheat consumer in the differential rate between the home consumption price and the available export sale price. At the moment the export sale price and the home consumption price differ by approximately 70c. Every bit of wheat that is consumed in Australia or sold at the home consumption price is in fact a loss to the wheat grower of an amount equal to that differential. That differential means that the wheat grower himself is contributing to taxpayers’ returns and to the consumers. If for no other reason, that is one of the purposes behind our concern at the statement made by the Minister. The Opposition supports the extension of this stabilisation plan. It regrets that the extension is for one year only. It is concerned at the intervention that this Minister and this Government have made in the sale of wheat overseas. It is concerned at the degree to which there is no guarantee of a long term stabilisation arrangement to benefit the wheat producer. The Opposition believes that as soon’ as possible dicussions should be concluded between the Australian Wheatgrowers Federation, the Ministers for Agriculture and this Government in order to introduce a long term stabilisation scheme which will have some meaning to the industry.
-Order! The honourable member’s time has expired.
– I always admire the way that members of the Austraiian Country Party loyally come into this House whenever their leader or deputy leader speaks in here. This is somewhat contrasted by the interests in wheat displayed by members of the Liberal Party of Australia because at present only 2 members of that Party are in the House. One is the honourable member for Corangamite (Mr Street), who takes a genuine interest in primary industry and the other is my friend Mr Graham who has one of the bigger wheat growing electorates of Sydney. The Deputy Leader of the Country Party, the honourable member for New England (Mr Sinclair) made great play on uncertainty - uncertainty in primary industry at present and uncertainty in business. This is a rather common theme. If I were still farming and growing beef, I would continue to grow beef at present. If I were in farming and growing sheep I would continue to grow sheep or wool at present. If I were in farming and growing wheat I would continue to grow wheat at present.
It just does not seem to square with me that one can say we have reached a position of uncertainty because the wheat stabilisation plan is to be extended for only one year. Growers are in exactly the same position now as they were in at this time last year. That is about the worst that one can say. We all accept that the main reason all along for the wheat stabilisation plan has been to take out the bumps and hollows, the rises in prices, the drops in prices and the problems caused by seasons. We are all aware of these things. These sorts of problems caused the previous Government to introduce quotas into the wheat industry. This has been regretted by honourable members opposite, I think, and it is regretted by us and by the wheat growers. But this is the way that the wheat industry works sometimes. I do not think it is time now to debate the whys and wherefores or the ins and outs of wheat stabilisation itself so much as when the next plan is to be brought into the Parliament.
The main Bill we are discussing today, the Wheat Industry Stabilisation Bill, centres mainly on an extension of the stabilisation scheme for one year. As such, the Opposition largely does not disagree with what is proposed.
Already Press speculation has occurred on the next wheat industry plan. I think everyone knows that another wheat industry plan has been drawn up already and is at present being discussed. In due course it will be introduced. A lot can be said about wheat stabilisation. With the new plan a great deal of work has been done in the last year or so. I mention Mr Callaghans report and the fact that a great deal of work has been done in universities and various other places.
– The greatest menace that the wheat industry ever had!
– The honourable member for Moore maintains that academics are a bit of a menace.
– No, Mr Callaghan.
– I am sorry. It is a paradox for the Deputy Leader of the Country Party, Mr Sinclair, to say that wheat sales when his Party was in government were a non-political event and to demonstrate now that there is a heck of a lot of politics mixed up in the matter which also has a potential for divisive attitudes in the country.
I point out that even though this plan is an extension for one year only the government has embellished the wheat plan for this one year extension. I am always most happy when people on the other side of the House get stuck into the Minister for Primary Industry, Senator Wriedt, because I take the long term view. I think that in 2 years or 3 years time much of these words, in black and white in the Hansard report, will be used against honourable members opposite by the farmers themselves.
On 23 February of this year the Minister for Primary Industry announced the addition of 10c a bushel on first advance payments. This is the first time that the first advance payment has been changed in some IS years. At the same time, the Minister accepted the proposal by the Australian Wheatgrowers Federation for a national delivery quota for 1973- 74 of 514.4 million bushels, plus 20 million bushels on a special pool basis at any stage when there was excess. On 24 May 1973 the Minister for Primary Industry announced that there would be a second payment for growers from the 1969-70 pool. These measures largely were designed to help stimulate more plantings. Even then the belief was that there would be a growing and better market for wheat.
I think all honourable members are now distressed by the fact that, although there were good wheat plantings and those plantings were going well and the seasons were good, the outbreak of rust has caused some problems to the wheat industry. I was distressed to see only in the last few days, that the estimate for wheat production in New South Wales this year has been reduced from 155 million bushels to 130 million bushels which is a drop of 16 per cent. The Australian Government has committed $500,000 to the locust problem. The weevil affair, if I can describe it in that way, is still the subject of more discussion. But even in this area we are doing something positive as the Commonwealth Scientific and Industrial Research Organisation, through its laboratories at Black Mountain In the Australian Capital Territory, is now investigating other ways of combating the weevil menace in terms of storage in situ.
I am sure that the Minister for Northern Development and Minister for the Northern Territory (Dr Patterson) will speak about the long term wheat contracts. These are certainly the best measures that the Government can take for the industry to try to introduce greater certainty into this area of activity. Another long term wheat stabilisation plan will be introduced and together with long term wheat contracts, we can guarantee more certainty. I do not think that anyone would state categorically that the present world wheat prices will continue to hold. If we are looking at the politics of this matter, I think it can be said also that Canada attained better contracts than we did with China, for political reasons, especially the fact that we knocked at the door at a later time.
There seem to be 2 versions of the problem with respect to the United Arab Republic. One version is that the Australian Wheat Board was not attempting to repudiate the contract with the UAR at all. But I think we can say that the move for cash payment was a repudiation in fact. Alternatively, we can adopt the other version in which people say that the Government was interfering. If the Government did interfere by providing a 75 per cent guarantee to maintain the viability of the contract, this is by far the highest amount in respect of which an Australian Government has ever guaranteed such a contract. That contract provides for the supply of 1.02 million tonnes of wheat each year for a 3-year period, the conditions of sale, including terms if any, and ‘the price to be negotiated at the beginning of each year. Even if long term wheat markets can be guaranteed, there is no guarantee that they will be held. In 2 or 3 years time we could need the wheat contract with the United Arab Republic. I think that it is reasonable for the Government to move in this way.
The Deputy Leader of the Country Party has foreshadowed an amendment to the Wheat Industry Stabilisation Bill which will seek to deny to the Minister for Primary Industry the right to issue directives to the Australian Wheat Board. The honourable member will do this when the Bill reaches the Committee stage, later today I suppose. The amendment relates to section 13 (3) of the Act, which provides:
The Minister may give directions to the Board concerning the performance of its functions and the exercise of its powers and the Board shall comply with those directions.
Senator Wriedt used this section to direct the Board to bear 25 per cent of the recent credit sales to Egypt. The Governnent, as I said, is bearing the remaining 75 per cent. I think the Deputy Leader of the Country Party will find it somewhat embarrassing to move that amendment, however, as the power of direction was first inserted in the Act in 1954 by his predecessor, Sir John McEwen. The Leader of the Country Party, Mr Anthony, now says:
I do not believe that the purpose -
He is referring to section 13 (3) of the Act: was ever intended to be to allow the Minister to direct the Board as to how it should carry out its duties. This section was inserted in the Act to protect the industry - not to allow the Government to tell the industry, through the Board how to manage its affairs.
These views, however, are not borne out by research. The section was inserted not to protect the industry but to protect the taxpayer. On 20 October 1954 the then Minister for Defence, Sir Philip McBride, introduced the Wheat Industry Stabilisation Bill 1954 info Parliament on behalf of the then Mr John McEwen. Explaining the new provision to give the Minister power of direction, he said:
It is far from the Government’s intention that this should open the way to Government interference in the wheat selling operations pf the Board, but it will be obvious to honourable members and it has in fact been clearly stated to the Wheatgrowers Federation that, as the Australian Government assumes the financial responsibility of guaranteeing the plan from public revenue, then, in the interests of the taxpayers generally, it cannot be indifferent, for instance, to the price at which the Board may be willing to sell wheat at some particular time or to some particular market.
Thus, Sir Philip was saying that the taxpayer had to be protected and, if necessary, the Minister could interfere even on a matter of price. There was no demur from either side of the House.
It is difficult to see, therefore, why Senator Wriedt was not entitled to issue the directive he did to the Board. Mr Anthony had his chance to put things right himself when he introduced the Wheat Stabilisation Act 1968 into the House of Representatives on 23 October of that year. But section 13 (3) remained unaltered. Neither in his second reading speech, nor at the committee stage, did the then Minister for Primary Industry make any reference to the section. There are many people not only in Government but in the industry who believe the Board acted irresponsibly in trying to wriggle out of the Egyptian deal.
The Board welcomed the market with open arms when the China market went bad. Now it says that, unless the next sale is in cash or the Government picks up all the risk, there should be no sale. As I said earlier, the wheel must eventually turn again and the day may come when we go begging to Cairo to buy on terms. I repeat, incidentally, that the 75 per cent of the risk that the Australian Government will carry is the highest percentage that has ever been carried on any wheat deal.
A great deal has been said about politics. I refer to April 1971 when Dr Rex Patterson, who was then Labor’s shadow Minister for Primary Industry, directed a pointed question to the then Prime Minister, Mr McMahon, on political interference in the wheat trade with China. I do not think that I should outline all that went on at that time. The political nature of the wheat deals going on at that time was very well demonstrated by Dr Patterson at the time. Allegations were made about interference by the Australian Security Intelligence Organisation. These allegations were never properly denied or discussed in this Parliament. I think it was pretty well established in the minds of everyone that wheat sales have been a large part of politics in Australia. It is a little naive when talking about wheat to say that politics are not involved. I am not saying that this is a good thing, but I am saying that it is something that we all should be mature enough to be aware of.
When the next wheat stabilisation plan is introduced into this House, I hope that we will have a chance to talk about the real deficiencies of other wheat stabilisation plans and that constructive criticism will be offered of the plan that will be brought forward in some attempt to give the industry more assurance of the long term stability which it has at present, I maintain, and which it wants in the future.
- Mr Speaker, the 2 Bills now under discussion are complementary and provide plenty of food for thought. They and the second reading speech of the Minister for Immigration (Mr Grassby) leave a number of vital questions unanswered, questions which should be answered by the Minister before these Bills pass through this chamber and questions to which the growers of the wheat are entitled to have answers. I hope the Minister will note them and when he replies to this debate will furnish concise and detailed information. I refer of course to the Wheat Industry Stabilisation Bill 1973 and the Wheat Export Charge Bill 1973. Before proceeding further in discussion of these Bills, may I point out that I represent one of the biggest, if not the biggest, wheat growing electorates in Australia. The division of Moore produces on average about half of the wheat production of Western Australia. It produces a quantity of wheat on average approximately twice the average production of the State of Queensland. Approximately 95 per cent of this production goes for export. The ports of Fremantle and Geraldton, which have a natural and undeniable freight advantage to all the major markets for Australian wheat, are the outlets for the wheat of the Moore division. In all the contracts which have been made with the People’s Republic of China, it has been found necessary to include a clause strictly limiting the tonnages which the Chinese may nominate for loading at these ports.
The Minister has stated that the extension of the wheat industry stabilisation plan for one year has the support of the wheat industry. My first question to the Minister is: What authority has he for this statement? To my knowledge, and it is quite extensive, the growers, up until Wednesday, 10 October, had no knowledge at all of this proposal to extend the existing arrangements for another year. The growers were aware that the plan which covered the delivery and marketing of the 1972-73 harvest had in effect expired on the eve of a Federal election. They had given the Australian Wheatgrowers Federation authority to negotiate a new 5-year stabilisation and marketing plan with the new and incoming Government. I have completely failed to find, on the basis of the most extensive inquiries and investigations, evidence of any discussions at the branch levels of any of the industrial organisations of any proposition that wheat marketing and stabilisation arrangements should be negotiated on a single year basis. I have completely failed to find any evidence that any industrial organisation has held a conference of growers in any State to discuss such a proposition, or that they have been given any opportunity to direct the Australian Wheatgrowers Federation on this all-important matter. In this situation, how can it be claimed that the Australian Wheatgrowers Federation had any mandate from the growers to accept this one year proposition on their behalf? If the Minister is leaning on an acceptance by the Australian Wheatgrowers Federation, how then does this constitute his right to claim that these Bills have the support of the industry, that is, the growers?
This proposed one-year plan raises allimportant issues. Let it be clearly understood that there is absolutely no provision, or even an indication, that existing principles obtaining in this proposal or any of the previous plans are to be continued beyond the marketing of the 1973-74 harvest. On the contrary, the Minister has stated that the Government is deferring this extension pending the outcome of a thoroughgoing review of the operation of the wheat industry stabilisation plan. He states further ‘that the Government will be moving to negotiations with the wheat industry and the States for stabilisation arrangements to apply for the period beyond 1973-74’. Surely this can only mean that the Government is providing for some departures from the principles of stabilisation which have prevailed in previous plans and likewise that there is no guarantee that these proposals will be acceptable to the States and most importantly to the growers. I repeat that there is no guarantee anywhere in these Bills that stabilisation will continue after the marketing of the incoming crop.
Wheat stabilisation plans are, in essence, contracts between 3 parties - the Australian Government, the State governments, and the growers. The States have a fairly simple role to play. Briefly, they acquire the wheat and issue to the growers a claim for payment. They arrange for the receival, handling and storage of the wheat through the various State handling organisations, and, most importantly, they fix the price of wheat for home consumption. The growers produce the wheat, harvest it, deliver it to the licensed receiver, receive a first advance payment of 120c per bushel less rail freight and some other statutory charges, and ultimately receive payments from the sale proceeds of the pool. The Australian Government for its part sets up the Australian Wheat Board, lays down the terms and conditions on which it shall operate, and at all times has it under complete ministerial direction. The Australian Government also arranges an overdraft with the Rural Credits Department of the Reserve Bank from which the Board pays the first advance to growers, and collects from, or conversely pays to, the Board the funds necessary to meet the commitment of the stabilisation sections of the wheat marketing and stabilisation plan.
Having outlined the basic procedures of what these Bills set out to establish, let me now trace through what actually happens to a grower’s wheat when he delivers it to the licensed receiver, and what will happen to the proceeds of the sale of that wheat under this one-year marketing and stabilisation plan - this one-year contract between the Australian Government, the State governments, and the growers. On delivery of his wheat, the grower will receive his claim for payment, which he will forward to the Australian Wheat Board in the State in which he has delivered the wheat. He will receive through his nominated bank from the Australian Wheat Board a credit representing the total number of bushels delivered multiplied by 120c, less freight, dockages - if any - and the levy proposed under the Wheat Tax Bill 1973. These moneys will be provided by the Board from the overdraft created with the Rural Credits Department of the Reserve Bank. In the meantime the Board will have commenced shipments of the wheat delivered to the 1973-74 pool and as payments are received will progressively discharge the overdraft with the Rural Credits Department. This process will continue until the overdraft has been paid off and until such time as sufficient funds are accumulated in the pool account to enable a further dividend to be paid to growers. This dividend process will continue until the time is reached when growers have received payment equal to the amount of the first advance of 120c per bushel, plus an additional 40c per bushel, making a total of 160c per bushel- the guaranteed price.
Just how long it will take to sell, ship and receive payment for a sufficient quantity of wheat to reach this situation is anybody’s guess. But it can confidently be predicted that the next harvest will already be in the process of being received and another new plan will already have been placed on the statute book. The important point is that the Government guarantee will already have been satisfied from the growers’ own funds and this most important aspect of the Government’s guarantee been discharged. Payments to growers will continue beyond the guaranteed price of 160c per bushel to 165c per bushel when all realisations after that amount and up to another 15c per bushel will go into the stabilisation fund, estimated by the Minister to reach an amount of $46m. From this point onwards pool realisations, if any, again revert to growers until the pool is finally wound up. The provision for all realisations after the growers have received 165c per bushel and up to 180c per bushel being paid into the stabilisiation fund is the proposition contained in the Wheat Export Charge Bill 1973.
This brings me to the most important question of all to be answered by the Minister. The question is: Why do we need the Wheat Export Charge Bill 1973 at all? Even if the pool did not realise 160c per bushel f.o.r. natural terminal port, there still would not be any need for this Bill because, quite obviously, as I have already shown, it does not commence to operate until growers have received the guaranteed return plus 5c per bushel. If the pool failed to realise this amount, their guarantee would be met by Treasury subvention. As this is only a one-year contract, with no life beyond the incoming harvest, then quite obviously there is no continuing Government liability in respect of future harvests contained in these Bills. In respect of future harvests, all the Minister has said is:
The Government is providing for this extension-
The Wheat Industry Stabilisiation Bill 1973 - pending the outcome of a thorough-going review of the operation of the wheat industry stabilisation plan. Under the direction of the Government a review group in the Department of Primary Industry will in the fairly near future be presenting its report for our consideration. We will then be moving to consideration of our position in relation to negotiations with the wheat industry and the States for stabilisiation arrangements to apply for the period beyond 1973-74.
It must surely be quite obvious by now that the desire of the Government to enact legislation under which it will, without any safeguards to the growers and without any justification whatsoever, withhold $46m of their proceeds from the incoming harvest can only be associated with ‘the thorough-going review being conducted by a group within the Department of Primary Industry’.
Is this the same group of academics who conceived the disastrous wheat quota delivery plan and sold it to the then Secretary of the Australian Wheatgrowers Federation on the understanding that he would then sell it back to the Government, through the Federation, as the Federation’s own courageous plan? Is this $46m being withheld from the proceeds of the incoming harvest to be used as a weapon with which to blackmail the industry into accepting some equally stupid and disastrous plan for future stabilisation - the work again of a group of impractical academic theorists entrenched in the Department of Primary Industry? Whilst being prepared to support the Wheat Industry Stabilisation Bill 1973 and the Wheat Tax Bill 1973, I am utterly opposed at this stage to the passage of the Wheat Export Charge Bill 1973. I believe that all consideration of this Bill should be deferred until the negotiations have been completed between the 3 principals - the Australian Government, the State governments and the growers - for another long-term marketing and stabilisation plan. There is presently no justification for this Bill.
As I have demonstrated earlier in my discussion of these Bills, if the 1974-75 harvest is to be sold through the Australian Wheat Board and is to be covered by stabilisation arrangements, there must be on the statute book by this time next year legislation similar to the Wheat Industry Stabilisation Bill 1973 presently before us. Subject to agreement with the growers, made freely and without coercion, there will still be ample time to negotiate another long-term marketing and stabilisation plan long before the Wheat Export Charge Bill 1973 becomes operative. This Bill can well form part of any proposed legislation for such longterm plan and would need little other than its title to be changed to ‘Wheat Export Charge Bill 1974*. There will be ample time to deal with this Bill next year when we are considering the legislation necessary to cover the 1974-75 harvest and, hopefully, an extended period of succeeding harvests. No moneys will be collected under this Bill until the Australian Wheat Board has sold, shipped and received payment for an amount of wheat equal to 165c per bushel multiplied by the number of bushels delivered to the 1973-74 pool. There is not the slightest possibility of this happening before this time next year.
The Wheat Export Charge Bill 1973 stands exposed as a thoroughly unnecessary piece of proposed legislation. The Minister’s second reading speech on this Bill stands exposed as a thoroughly misleading document, completely unnecessary as to its alleged purpose, completely unnecessary as a complement to its parent Bill, and under the gravest suspicion as to its real purpose. It certainly can never play any part in the marketing and stabilisation of the 1973-74 harvest and should be deferred at least until its part in any future marketing and stabilisation scheme is revealed.
This now brings me to the final point which time will permit me to make in respect of these Bills. The Minister, in his second reading speech on the Wheat Stabilisation Bill 1973, stated:
The 1973-74 season be denned as a quota season.
Why is it necessary to make this one of the basic provisions of this Bill? The crop has already been planted under quota delivery provisions, the Australian quota has been determined and each State has been given a quota entitlement. Admittedly we apparently have the extraordinary situation where one State abandoned individual quotas for the growing crop and now faces, because it may have available for delivery a quantity of wheat in excess of that State’s quota, the seemingly impossible task of trying to ration deliveries from growers against the background of having given them an open go at seeding time, or alternatively of abandoning quotas altogether.
Is the provision referred to by the Minister necessary in order to throw a cloak of legality over the scandalous waste of growers funds in the administration of this unnecessary and ridiculous plan? I have repeatedly endeavoured to obtain from the Minister the detailed costs of the quota delivery plan. I have been singularly unsuccessful in these attempts. However, the following facts seem to have emerged: Firstly, that the cost of the plan is being met by the Australian Wheat Board as a charge on growers’ proceeds; secondly, that the administration costs of the Australian Wheat Board have increased by approximately Sim a year since the inception of the quota delivery plan; and thirdly, because Co-operative Bulk Handling Ltd in Western Australia declined to accept any responsibility for the plan at all, that State’s costs stand separate from the cost of reimbursement paid to the handling company and are approximately $136,000 for the past year. Other States are disguising the very much higher cost of administering the quota delivery plan in their States by absorbing a substantia) part of the cost into the costs of the handling organisation in that State and still charging them to the Australian Wheat Board through this indirect channel.
To substantiate my claims concerning the greatly increased costs of the Australian Wheat Board, I seek leave to incorporate in Hansard the following schedule of administration costs of the Board taken from the 1971-72 annual report of the Board which shows these costs have increased from $1.812m in 1968-69 - the last year prior to the introduction of the quota delivery plan- to $2.8m in 1971-72.
– Is leave granted? There being no objection, leave is granted. (The document read as follows) -
– May I respectfully suggest to the House that the time has probably arrived when it would not be unreasonable to call for a full inquiry at the highest level into the whole operating costs of the Australian Wheat Board. Finally, may I place on record my implacable opposition to the action of the Minister for Primary Industry in directing the Australian Wheat Board to conclude a sales contract with Egypt against the considered judgment of the Board. This problem could never have arisen were it not for the fact that the Minister has the power of positive direction over the Board. As proof of the sincerity of my opposition to this objectionable innovation, I desire to place before the House the following extract from my presidential report to the Farmers’ Union of Western Australia at its 1955 Annual Conference. This extract contains my submission to the then Minister for Commerce and Agriculture, the right honourable John McEwen, submitted in my capacity as President of the Australian Wheatgrowers Federation. I seek leave to incorporate the extract in Hansard.
-Is leave granted? There being no objection, leave is granted. (The document read as follows) -
STABILISATION: After the General Elections last year the Federal and State Governments finally reached agreement on the details of a five-year Stabilisation Plan and a date for the conduct of growers’ ballots was fixed.
Prior to the ballots being held a special meeting of the Executive was called to determine Union Policy. The Executive decided that as there was only one growers’ organisation in this State, The Farmers’ Union, and as the Farmers’ Union embraced virtually 100 per cent of the growers, then the ballot was in effect a ballot of members of the Farmers’ Union. It would have been presumptuous on the part of the Executive to determine policy on this question in these circumstances. The Executive did, however, feel a responsibility to ensure that every grower had a proper appreciation and understanding of what the plan meant and how it would work, and to this end arranged for the publication of a series of articles explaining, the details of the Plan as presented to the growers, and arranged for the President to address a series of meetings throughout the wheat belt.
The result of the Ballot is now history, a majority of growers voting in favour of the Plan.
When the Bills were introduced into the Federal and State Parliaments to give legislative effect to the Plan, growers were dismayed to learn that the clauses in the 1946 legislation which gave the Minister a power of veto over the Australian Wheat Board, were to be amended to extend this power of veto to a positive power of direction and bring the Board under complete Ministerial control.
At no time during the lengthy negotiations for the Stabilisation Plan did the Minister for Commerce and Agriculture give the Australian Wheatgrowers’ . Federation any reason to believe that the Governments required the power of direction over the Australian Wheat Board. The Federation had requested that the clauses already contained in the Legislation and giving the Minister power to veto action of the Board should be deleted, and the Board should be relieved completely of the possibility of Ministerial interference. To be fair we must admit that at no time did the Minister give the Federation any reason to believe that he was prepared to delete these clauses. It is equally true that at no time was the slightest indication given that these clauses were to be amended in such a drastic manner.
Had the Minister advised growers of the Government’s intention in this regard, prior to the conduct of the ballots and had growers accepted the Stabilisation Plan with a full knowledge of all its implications, then there could have been no cause for complaint. To allow the ballots to proceed and at the same time keep growers in ignorance of this vital alteration in a fundamental principle of the Plan must surely represent one of the greatest confidence tricks of all time.
In an attempt to secure some variation or deletion of these new clauses, or alternatively to provide some safeguards, I submitted, in my capacity as President of the A.W.F., the following case to the Minister for Commerce and Agriculture, Rt Hon. John McEwen at Melbourne on the 28 February last:
The Federation views with most serious concern and disappointment, the action of the Commonwealth Government in making what we consider to be a fundamental change in the measure of control assumed by the Crown over the marketing of wheat, as compared with that applying when the Wheat Industry Stabilisation Act 1946 had application, and because the change holds much menace to the principle of private ownership of the produce of the land, and the principle of the farmers’ right to market their own produce. It is this thought which has been the motivating power behind this written statement, in order that a permanent record may exist of the very strong objections of this Federal Body.
I propose firstly to point out that the original Stabilisation Act created an Australian Wheat Board, and clothed it with certain fairly wide powers which it might use in marketing wheat to the best advantage of growers, acting as a bona-fide trustee.
These powers set out in the old Act were permissive powers, qualified only by any direction which the Minister might give to the Board. No great exception can be taken to a clause of that kind, which obviously permitted the Minister to veto any act, or proposed act, by the Board which might conflict with public interest. Such a safeguard is necessary when a monopoly is granted. It may be frankly admitted at this juncture, the financial responsibilities of the Government arising from a guarantee of say 12/7d per bushel are greater than they were in 1947, when the cost of production figure was say 6/ 3d per bushel. But the privilege of a Minister to give general directions to the Board, which must be obeyed, may go far beyond financial considerations. Such directions may have a social or economic objective, quite outside the finances of the Wheat Pool, and quite conceivably have a political objective.
For instance, take the infamous New Zealand wheat deal when Mr Scully sold 18 million bushels of wheat to New Zealand at 5/9d per bushel, one of the objectives was to fix the landed price of the purchases made in Australia, to coincide with the price which the New Zealand Government was prepared to guarantee wheat production in that country. My recollection of the calculation was Australian F.O.B. price 5/9d shipping freight l/9d- Total 7/6d. Guaranteed price to New Zealand farmers - 7/6d.
At a later stage the Wheat Board was subjected to considerable pressure from Canberra to make the Board pay freight on wheat to Tasmania. Indeed there was more than one Government behind that move.
Had the Minister been clothed at those times with powers ‘which must be obeyed’, then the Board would have been compelled to act according to Ministerial wishes. The demand made upon the Board in respect to that matter was quite clearly in conflict with the Wheat Industry Stabilisation Act, and was also in conflict with the principles underlying that last bulwark of freedom, Clause 92 of the Australian Constitution.
The Board resisted the pressure, but the matter did not end there. At a later stage a series of amending Acts were introduced into the Federal and State Parliaments calculated to achieve the same results by a circumvention of Clause 92. Certainly these amending Acts had to secure passage through States Parliaments, but if there had been powers of direction in the Act similar to those now inserted, the farmers would have been left with the alternative of accepting an admittedly unfair price for stockfeed, or meeting the bill of costs for sea freight to Tasmania on the whole of the wheat used there, presently about 3/6d per bushel, or almost as much as freight to the United Kingdom. This demand undoubtedly originated in the political arena of Tasmania, and was not confined to one political party.
The New South Wales Minister for Agriculture also made a demand for wheat to be sent to New South Wales from Victoria, which would normally go for export at a much higher figure. The Board successfully resisted that pressure too.
Then on another occasion, a Minister for Commerce intervened in negotiations between the Australian Wheat Board and Britain, selling a very large quantity of wheat at a priceless than that the Board was holding out for.
Your Government provided proof that the political drive to make the Australian Wheat Board pay freights to Tasmania was wrong in principle by bringing down new legislation dealing with the matter.
This seems to be the point, Sir, to request you to state specifically whether, in your opinion, the Australian Wheat Board has ever been unfaithful to its trust, or lacking in recognition on its duty to the Nation. If the Board, in your opinion, has not erred in this important aspect, then do you consider that any State Minister has at any time had reason to saythat the Board has failed to act in strict accordance to the governing Acts.
This Federation believes that it is essential to the future conduct of the Board, that the Board must be fully protected from what may be termed “ back door pressures.”
The above matters are, however, relatively small when measured against the fact that a grant of powers, qualified only by a power of veto exercisable by a Minister only when the Board offends against public interest, constituted a clear and very valuable Trusteeship which has beneficial psychological effects on producers and Board alike. There can be no doubt whatever, that the knowledge amongst farmers that their wheat was received by, and handled by men with that sense of responsibility which pertains to Trusteeship was a source of satisfaction to growers, and a moral strength permeating the whole concept of organised marketing on a Commonwealth basis.
That satisfaction went a long way towards securing an affirmative vote at the recent ballots. If the principle of Trusteeship was to be destroyed, then growers should have been advised prior to the taking of the ballot. This Federation learned with utter dismay, that whilst ballots were being taken on the amended plan, no mention was made that such a sweeping change was contemplated over the marketing of the produce of our land. The instinct of the farmer leads him to assume, that wheat produced by his own hand and brain, and his own materials, applied to his own land, is his own property. The control clause in the new Act will disabuse his mind of that conception, but it is doubtful if anything of equal value is being substituted.
It is extremely difficult to believe that the Menzies Government, or yourself, are responsible for this gigantic stride in the direction of complete socialisation. Nevertheless, we know that uniform legislation of the kind passed by the States is usually drafted in Canberra, and moreover the Commonwealth Act is couched in similar terms. The Commonwealth and the States Governments must all have been consenting parties.
The Acts now constitute the law of the land, but I desire to request your Government to seek an amendment at the next session of Parliament to restore the position set out in the old Act. If it is claimed that the new clause means the same thing as the old, then there should be no objection to granting this reasonable request, the work involved would be amply rewarded by a restoration of confidence and faith in the integrity of Governments.
Alternatively, I believe it is absolutely essential that the following assurances be given:
That no direction be given to the Board except above the personal signature of the Minister administering the Act for the time being.
That neither Board members, nor the staff of the Board, shall be deemed to be public servants.
That no direction will . be given to the Board which will of itself limit the right of free speech by individual members of the Board, unless such freedom of speech is deemed to be prejudicial to the proper conduct of the marketing of wheat.
That no direction shall be given to any member of the Board or its staff which compels him to frustrate lawful resolution of the Board properly recorded in the Minutes.
That it shall be assumed that unless the Board has received a written direction signed by the Minister on any given subject, then the Board is free to act upon its own unfettered judgment.’
The Minister’s reaction to this written submission has been most disappointing.
The Minister told the Federation that the clauses were inserted in the legislation with his full knowledge and he would accept full responsibility for them. He offered the Federation no hope that the clauses would be deleted and gave no indication that the alternative assurances requested would be granted. The Minister said he would rely on the record of the Government.
– Although it has taken nearly 20 years to completely vindicate the need for that submission made to the then
Minister in my capacity as President of the Australian Wheatgrowers Federation, and nearly 20 years for the proof to emerge as to the real need to ensure that the Australian Wheat Board is free to act on the basis of trusteeship for the growers free from Ministerial interference of any sort, my stand has not changed one iota. Whether the Australian Wheat Board should or should not have concluded the sale to Egypt - the subject of this present controversy - is relatively unimportant compared to the wider issue - whether the Board is in fact a trustee, for the growers charged with the responsibility of marketing the growers wheat to the best possible advantage and returning to the growers the net proceeds after meeting marketing costs.
The proposition contained in the present ministerial direction to the Board to conclude the sale to Egypt on terms unacceptable to the Board is a complete violation of this vital principle. It highlights the danger of writing into the Acts supporting the Board the power of ministerial direction and control and cuts right across the vital principle that the produce of the land belongs to the producers subject only to the payment of his just debts. It is socialisation in its crudest and rudest form. It is a matter of deep regret to me that this power of socialisation was written into these Acts by a former leader of the Party to which I belong. It does not and never shall change my attitude to such an infamous proposition.
-Order! The honourable member’s time has expired.
– After listening to the remarks of the previous speakers from the Opposition benches one could be excused for thinking that they had just arrived in this place - not that they had had the responsibility for the last 23 years of looking after the wheat industry. Most of the judgments that have been made by the Opposition have been based on the position in the industry at this stage of its marketing development. One would almost have thought that the second reading speech of the Minister for Immigration (Mr Grassby) on this Bill had not been considered by the Opposition because, ironically enough, the Minister referred to the actions in 1968 of the present Leader of the Australian Country Party (Mr Anthony) as the then Minister for Primary Industry in drawing attention to the amount of money that had been contributed by the taxpayers under the terms of the Government’s guarantee for stabilisation purposes in the period up to 1968. He mentioned also his suggestion that it was a considerable sum to provide to one of the most prosperous rural industries of that time and that that would of itself be sufficient justification for changes in important features of the stabilisation plan. But those changes were not carried out.
The wheat industry stabilisation plan was introduced by a Labor Government in 1948. It was continued virtually unchanged for the 23 years in which members of the present Opposition were in government. Now we find that the Australian Labor Party, as the Government, is being criticised because within one year of taking office it has not yet produced the plan that it thinks is more desirable for present conditions in the wheat market. It is quite obvious - the honourable member for Moore (Mr Maisey) has unconsciously supported this proposition - that more time is required if we are to establish a price stabilisation plan that will meet with the full support of the industry. It is essential, as the honourable member for Moore said, that the academics not be allowed to dominate. I am indebted to the honourable member for Moore for outlining so precisely and so neatly the policy making process that took place under a government in which his Party - The Australian Country Party - had the main responsibility for primary industry policy.
There can be no question that isolated pockets of people with particular ideas or vested interests influenced the bodies which gave advice to the Government of that day in terms of primary industry policy. There can be no question that a large number of the weaknesses in the system that the Australian Labor Party inherited as a Government are due to the fact that that sort of policy making process took place. As the honourable member for Moore described the situation, there was a pocket of academics, whether they were from the field of primary industry or anywhere else does not matter, selling their policy to an organisation such as the Australian Wheat Board, which then successfully sold the policy back to the Government. That is an indictment of the policy making process that took place at that time. There can be no doubt that the ideas and the base for the new wheat industry stabilisation program will be clearly identifiable with the present Government’s initiative. There will be no question of it getting its ideas through the back door. The present
Government is proud to support the work of the Department of Primary Industry. Insofar as its work needs refining by discussion in public by industry groups, the Government is prepared to allow that discussion to take place.
Previous Opposition speakers - in particular the Deputy Leader of the Australian Country Party (Mr Sinclair) - were once again very loose with the facts. I challenge the Deputy Leader of the Australian Country Party to tell us exactly where and when the Minister for Primary Industry (Senator Wriedt) defied a Cabinet decision and exactly where and when the Minister for Primary Industry dissociated himself from a Cabinet decision.
– The decision of the Australian Agricultural Council concerning weevil eradication.
– I have already referred in this place to the minutes of the meeting of the Australian Agricultural Council at which the Minister entered into a commitment in regard to a program for the eradication of weevils in the wheat industry. It is clearly recorded in the Minutes for all to read that an undertaking was given to the Agricultural Council on the condition that it had Cabinet approval. It is also clear that the opposition of wheat growers to inspectors coming onto their properties in order to eradicate weevils from the wheat storage on their farms has had a major impact on the feasibility of the program as originally conceived. There can be no doubt in the mind of any sane and rational person that, given that opposition, the whole program had to be completely reviewed. In fact, the feasibility of the program had to be seriously questioned.
Another subject to which I wish to refer is the recurring theme of the Deputy Leader of the Country Party that in some way or other it is disastrous to allocate the Primary Industry portfolio to a member of the Senate. Does that mean that the Country Party has no confidence in its 5 members of the Senate? Does that mean that those senators are unable to defend in the Senate the position of the farmer? Does that mean that the Country Party has no confidence in the Senate? Perhaps it does. Let us see that manifested in other ways. The general criticism of the present Minister for Primary Industry has not been supported by, among other farming organisation leaders, Mr Heffernan, the President of the Victorian Farmers Union. In a public place - at Corryong - he said that Senator Wriedt was the best Minister for Primary Industry this country has seen for 15 years.
– That is since Billy McMahon.
– Yes. I am indebted to the Leader of the House for indentifying the significant former Minister. As I said when I began my remarks, we have now had the present wheat stabilisation scheme for just over 23 years. It was introduced in 1948 by a Labor Government.
– By Reg Pollard - a true Labor man.
– Yes. There is no doubt that I have a wonderful identification on many occasions with the honourable member for Moore. This plan has to be brought up to date. It has to be brought into line with market conditions and expectations as they are now. The extension of the scheme for one year was agreed to by the wheat industry. This extension is absolutely essential if the whole program is to be looked at in an objective fashion and if time is to be given to the industry to consider the proposals that arise from such an examination. That was clearly stated in the second reading speech of the Minister when he introduced this Bill. The reasons for this one year extension of the present scheme have been outlined to and are understood ‘by every rational person in the industry.
I turn to the subject of political interference. Compared with the political interference that was highlighted by the Minister for Northern Development and Minister for the Northern Territory (Dr Patterson), who is sitting at the table, the recent events fade into insignificance. The right honourable member for Lowe (Mr McMahon), who was Prime Minister at the time, has admitted that members of the Wheat Board were used to pass an official note on to the Chinese in May 1967. That admission has been made by the then Prime Minister. The contents of that note have been divulged by the Minister for Northern Development and Minister for the Northern Territory. There can be no question that in terms of political interference this has reached the height and there can be no question that such use of a marketing organisation will never be indulged in by the present Government. The recent dealings with Egypt were surely commercial .common sense. A 3-year contract had been entered into with the Egyptians. That 3-year contract was entered into at a time when it was absolutely essential that the wheat growers of this country have that market. Therein lies another interesting political story. This commitment already had been agreed to. Now we find members of the Country Party complaining because the Australian Wheat Board has been asked to honour its responsibilities in a strictly commercial sense. Not only that, but also the Government today has accepted a higher degree of risk than has ever been accepted before on a wheat contract. The Government has accepted 75 per cent of the risk involved. This situation is one which the Australian Country Party now condemns.
Let it be quite clear what the Country Party is condemning. It is condemning a commercially responsible approach to a negotiated contract. It is condemning the reputation which Australia has jealously maintained in the past in relation to commercial contracts. The Country Party wanted the Australian Wheat Board to welsh on a contract. That fundamentally, is what the view of the Opposition comes down to. That, fundamentally, describes the short view that the Country Party takes of agricultural policy in this country today. That, fundamentally, typifies the short term, ad hoc approach which characterised the Country Party’s 23 years in government. We have a Bill before us today which will give this Government, a new government, time to develop a more rational, sensible wheat stabilisation program that more adequately will meet the needs of future years. I commend the Bill to the House.
– Each year, at about this time, we have a debate on wheat. In past years there has been a continuing criticism from city interests that the wheat grower was getting another handout - I think that was the word they used to use. It is true that, up to 1968, the wheat growers had received $156m from the taxpayer and, in the 5 years up to 1968 they had received $95m. This obviously was something which the community had in mind.
– Prior to that they put in $400m.
– I will come to that later. It is worth remembering that even in those days when the taxpayer was contributing to the wheat industry, no one seemed to worry very much about the contribution that the export industries were making in the form of tariffs. Just recently we saw a Tariff Board report which measured the consumer subsidy for the electronic industry at S30m a year. We have seen many measurements of the consumer subsidy which has been paid for in the end by exporters, such as the S300m a year paid to the motor car industry. Nobody mentioned those figures.
As the honourable member for Moore (Mr Maisey) so rightly says, people also forget that for many years the wheat grower has been subsidising the cost of living in this country. I will spell this out again because what is happening now is exactly the same as happened in the past. The wheat stabilisation scheme means that wheat is supplied to the flour miller at a considerably lower price than the price at which otherwise he could buy it. Let me give honourable members the world prices as at 16 November because, as far as I can gather, they are strictly applicable to our situation. The Canadian price for 14 per cent protein wheat is $3,805. The United States price for hard red winter wheat is S3.334 and the Australian export price is $3.66. In other words, we could sell on the export market at $3.66 wheat which we now sell to the Australian consumer at today’s home consumption price of $1.85. This is a contribution that the wheat grower has made in the past and is making today to lowering the cost of production in an attempt to keep the inflationary pressures under control.
Let us look at the stabilisation scheme as a general principle. I know that this is a bit like motherhood and that one should never criticise stabilisation. I am not criticising it. But I understand that motherhood is a pretty painful process and that there is a price to be paid for motherhood. There is also a price to be paid for stabilisation. I think that every now and again it is worth while to look clearly at the subject of stabilisation. I emphasise that I am not saying we should not have a stabilisation scheme. However, we ought to look at its defects and problems to see whether we can improve the scheme for the future. One of the things that happens, of course, is that stabilisation discourages the production of wheat when the world needs it most and encourages its production when the world needs it least.
We have a tendency to think of the wheat industry as an industry. It is not an industry. Those who grow wheat are made up of a lot of farmers. To be more specific I shall identify each as Fred the farmer. They make up their minds what they are going to grow. They do not do anything by government direction. They balance up what they should do and what is the most profitable. Fred the farmer will look at the price he is going to get for his wheat, and he will know that he and the other farmers will be contributing $46m in a year to the stabilisation scheme, that he will lose at least 15c a bushel because that amount will go into the stabilisation fund. With, I suppose, an absence of proper consideration for the economy but with true consideration for himself he will look around to see what else he can grow. He sees that he can grow wheat, oats, barley, lamb, beef or wool and he knows that all these products are desperately needed. Fred looks at the 15c a bushel he is going to lose to help to provide the $46m which will be paid into the stabilisation fund and he is likely to say: ‘I think I will grow less wheat’, just when the world needs wheat most. This is one of the problems of stabilisation.
When demand falls as it does fall - it falls in response to the increase in supply which is created by high world prices - Fred the farmer, who has not been growing much wheat, again looks at the situation. He sees the $46m which has been contributed to the fund by other farmers and he says: ‘There is the certainty of a Government guarantee’. He knows that the Government is committed and that this large amount of money is in the fund and the price of wool is starting to fall. He says: ‘I think I will start growing wheat again’. The tragedy or the difficulty of this situation is that Fred starts to grow wheat just as the world demand for wheat is falling. That is why the price is falling and that is one of the problems of stabilisation. I know that I will be branded later as being one who is against stabilisation but I am not against stabilisation. I am just pointing out some of the fundamental problems which we should try to measure and correct, if we can, when the scheme is being looked at. Because of the tendency for stabilisation schemes to increase the pressure to grow wheat when the world needs it least, there is always a pressure for production limitations, which is a nice way of referring to quotas. Fred the farmer would look at it in the form of quotas.
– They do not restrict production. They never restrict it. The wheat over and above the quota goes on the black market.
– I will come to that in a minute. Why should Fred the farmer, who has not been growing wheat during the good times and who has not paid anything into the funds, be able to milk the fund when the demand for wheat falls? Another pressure for the imposition of quotas is that if we do not have some kind of quotas there will be a burden on the taxpayer when the price of wheat is really low and there exists a government guarantee that increases the price of wheat. This tends to create a very high burden on the taxpayer. In other words, honourable members must admit that stabilisation schemes always encourage quotas. There is always hidden behind stabilisation a pressure for product limitation and the amount of wheat that one can deliver. It always sounds pretty fair and logical until you start to look at it clearly. Then you come up hard against these awful facts of life. What happens if you are developing country? I notice that the honourable member for Grey (Mr Wallis) is listening with intense interest. When you are developing new country and you have not been growing wheat in the past, so that you have not got a quota, it means that you cannot use your land to the best advantage. The honourable member for Moore (Mr Maisey) would be acutely conscious of what happens in Western Australia.
One of the other problems about quotas is how a quota is going to be fixed and people make apathetic effort to justify quotas. The Minister for Northern Development (Dr Patterson) has been one of the leading lights in this regard. He always says - or he used to say - that we ought to tailor the supply to the likely market demand. That is splendid until the weather does what it does almost every year and lets us down. If it does not let us down in Australia, it lets us down in the rest of the world. I was hoping someone - and I know the honourable member for Moore who has expert knowledge in this regard will do it one day - would spell out the margin of error between quota expectation and quota realisation.
– The academics will do that for you.
– This has been one of the awful examples of the fallibility of people. I would not say the academics. I am a classic example of making bad judgments about what is going to happen in future markets. If I had been able to make better judgments I would be a much richer man than I am. I have often said that people around me watch me and that when I buy cattle they sell them. I am not being critical of academics or other people who try to make judgments about quotas or about what the limitations should be. All you can say for certain is that they will be wrong to some degree, and, if you look at the experience in Australia, they will be greviously wrong. What are the other problems about quotas? Because they are going to be wrong, they are going to grow too little and that is what has happened in the past. One of the reasons why we get so little wheat to sell is due not only to bad seasons but also the effect of quotas in the past.
What happens if we grow too much? We are left with wheat we cannot deliver. I know that wheat farmers in electorates other than Wakefield are inclined to .put wheat on to what they call the black market. The grain growers of the Wakefield district have much higher standards than that. We will find this is a continual problem. What does a wheat grower do? He suddenly gets a 20 per cent increases in his wheat yield. How is he to judge how much he is going to get? He does not know. He gets 20 per cent more and he has to do one of three things: He has to put it in the shed and hope that he can get it into next year’s quota or he has got to feed it to stock or cart it across the border to the black market. Or maybe there is room in the quota for this year if the whole system has made a fundamental error of quotas and there is room in the system.
What happens to the chap in the districts - the honourable member for Angas (Mr Giles) would be acutely aware of this - where the seasons are notoriously unreliable? In my district most of the people have a fair idea of what they are going to get. However, in the Murray and Mallee districts farmers get a high and a low; they get 3 lows and a high or 4 lows and a high. How is a chap in those areas going to gauge how much he should grow? And what happens when at last, if the gods are kind to him, he gets a high yield and he is left with a lot of wheat he cannot sell?
These are the things we must think about when we start to have a look at this stabilisation scheme. Look at the other queer aspects of it. There is a case about which the honourable member for Moore would be aware. With his expert knowledge, he would be well aware of these difficulties. A chap I know has a beef feed lot. He runs his beef in one farm and he grows his grain, mostly wheat, in another farm a few miles away. AH he wants to do, poor simple man, is to grow wheat as cheaply as he can - he is a pretty good wheat grower - and feed it to his cattle and turn it into beef, which the world wants. But when he asks the Department of Primary Industry whether he can do that he is told: ‘No, you cannot do that. You have to take it to the Wheat Board. You have to deliver it to the Wheat Board and then go down and get your own wheat out again’.
I am not trying to score political points off anybody. I am begging the Government and indeed the wheat growers representatives to look with a good deal of clarity at the true implications of stabilisation. I could have made a speech - perhaps not as eloquent as others made here - picking holes in some aspects of the legislation, but I thought I would take the opportunity to urge the wheat growers first, the wheat leaders second, the Government third, and indeed some members of the Parliament also to realise that there are problems in stabilisation. It is not just good enough to say that stabilisation is a good thing. It is like motherhood. It is automatically good. I repeat, motherhood has some disadvantages, I am given to understand, although I cannot regard myself as intimately knowledgeable on the subject. But it is something that we ought to be looking at with a good deal more clarity and courage than we have shown in the past. I hope that this marking-time period will be used by all of us who want to have a look at the fundamental problems as well as the fundamental advantages of wheat stabilisation.
– Over the years the economic position of wheat growers has been subjected to the dictum ‘cheap bread for the masses’. This can be best exemplified by the assertion that 10 years ago the wheat equivalent of a 12c loaf of bread was 5c; now it is 6c out of a similar loaf of bread which costs 25c. This indicates that the wheat grower has shouldered an unfair percentage of the cost of living and does deserve the commendation of all Australians for his magnificent national effort. My colleague the honourable member for Wimmera (Mr King)-
– He is an experienced wheat grower.
– I thank the honourable member for Mallee. He is an experienced wheat grower whose contributions to the Australian wheat industry compare magnificently with the rather paper weight ejaculation we have had from the economists who sit opposite us. He pointed out that of every 2 loaves of bread the Australian housewife purchases, the Australian wheat grower contributes to her for nothing the wheaten content of the second loaf. One of the Bills we are discussing is a 12 months extension of a previous scheme, but understandably, from the pressures that have been exerted on farmers by the Labor Administration wheat growers are dissatisfied because what they wanted was a new, fresh start, not a tapered end to a bad finish. The wheat industry is not a trophy that has to be defended every year. Although the industry has made special requests to the Government for revaluation compensation of 828,000,000 following this loss to farmers with the currency re-alignments earlier this year, its claim has been met with a reaction of frosty calm. I ask the Minister for Northern Development (Dr Patterson) to let us know whether the statements about revaluation compensation were really not meant and were merely rhetoric. The Labor Government, unless it pays this compensation forthwith, will stand condemned in the eyes of all Australians as ‘scoundrels’. The Bill seeks to extend for 12 months the previous 5-year stabilisation scheme, but there are certain provisions of the Bill on which I want to comment.
The first is the establishment of the guaranteed price of $58.79 per tonne. The second is the method of establishing the home consumption price. In the previous plan provision was made for the guaranteed price and the home consumption price to be varied in each year of the plan according to movements in cash costs, including interest actually paid, in rail freight and handling charges, calculated by index methods. In the previous plan the guaranteed price for the first year was set at a specific level of $1.45 per bushel f.o.b. ports based on a level consonant with world trading conditions and prospects.
If this method were carried through and were applied at present - if the principle were applied of having the guaranteed price at a level consonant with world trading conditions and prospects - the price would be in excess of Sill per tonne and not the present guaranteed price of $57,601. I criticise the 12-month extension of the guaranteed price and want it recorded that i oppose a unilateral declaration of a guaranteed price which does not move in exactly the : same manner as costs assessed for variations in the home consumption price. I state this as a warning of where I stand on this issue which, because of obvious factors, has no relevance in this scheme. My position is stated so that, when the new scheme is negotiated, this important principle will be observed. Obviously, based on world production predictions and market anticipation, the Australian wheat growers will have to contribute 15c a bushel on all wheat exported this year as a contribution to the stabilisation scheme.
The home consumption price will vary only according to cash costs, established as to their index following the survey carried out in the years 1970-71, 1971-72 and 1972-73, by the Bureau of Agricultural Economics as a base for the next 5-year scheme. But the imputed costs - allowance for the owner-operator’s allowance, yield devisor, depreciation allowances and interest on capital which were established on the basis of the survey carried out in 1964-65, 1965-66 and 1966-67- are not to vary but, in effect, will remain constant from the beginning of the scheme in 1968 till the completion of the 12-months extension in 1974. Why the difference and distinction in principle?
On behalf of the Australian wheatgrowing industry I submit that this is positive proof that the Labor Government deliberately adopts as policy: First, pegging the owner-operator’s allowance at the figure applicable 6 years ago and, secondly, making them pay higher interest charges, which have increased from 5.7 per cent in 1964-65 to 9.5 per cent now with a 2 per cent increase recently. But the owneroperators have not been allowed to pass on these costs. They must absorb them. Thirdly, the depreciation schedules are not realistic and completely ignore the fact that machinery becomes obsolete and should be depreciated over a shorter period. Fourthly, no allowance is made for the big increase in the value of land. Fifthly, the yield devisor of 20.25 remains as the dividing factor and this appears somewhat high.
In developing the first point, it is pertinent to mention that the figure was obtained from information obtained in a period beginning in 1964. This is the figure being used for the calculations. It is most unfair and unjust and borders on the immoral to relegate the Australian farmer to the level of ways pertaining 9 years ago during a period when the average wage was increased from $51.50 in 1963-64 to $101.50 in 1972-73- by 97 per cent. In addition, the allowance treats the farmer as a labourer when, in effect, he is scientist, economist, philosopher, workman and manager. I submit that the owner-operator’s allowance should be included as a variable item in this extension and in the next 5-year wheat stabilisation scheme and be subject to annual variations by indexing methods. I seek leave of the House to have incorporated in Hansard tables which show how the home consumption price of wheat and, consequently the return to the grower should be increased; and how this would have varied if the owner-operator’s allowance had varied and not stayed fixed for the period of the scheme (a) where the rate of increase in the operator’s allowance is at the same rate as other cash labour inputs and (b) where the rate of increase in the operator’s allowance is at the same rate as pastoral awards.
– Is leave granted? There being no objection, leave is granted. (The document read as follows) -
– I thank the House. Similarly, the matter of interest charges is discriminatory. Interest on overdrafts will be calculated at current rates but the interest factor on the imputed costs for capital will be at lower rates below 6 per cent per annum, additionally. Recent valuations in Queensland on unimproved capital value basis, obtained by an analysis of recent sales, indicated an increase of almost 50 per cent in the capital values over a period of 9 years.
Depreciation does not take account of obsolescence. The Australian farmer has a reputation for being among the most efficient in the world. He has gained this reputation through harnessing modern technical knowledge to practical experience. It is rather odd to claim that they do not change their machinery within 10 years and their buildings within 50 years. The yield devisor remains at 20.25 bushels an acre. The Bureau of Agricultural Economics, in a publication dated May 1973, indicated that with the exception of New South Wales average wheat production per farm was lower than in the 1967 survey. Wheat yield per acre sown in 1972 was 17.9 bushels, 20.7 bushels in 1967 and 18.1 bushels in 1962. The average wheat production per farm in the respective years was 8,848 bushels, 9,731 bushels and 6,790 bushels. Theoreticians have to be made to realise that Australia is a dry land; that rains do not come but droughts, rust and frosts do. The average yield should not be as high as it is. Of course there is no need to spell out that the lower the yield, the higher the cost per bushel to produce. But these are facts and we cannot change facts.
As stated above, if the owner-operator’s allowance was a movable factor the cost of wheat would have been higher. By being denied natural justice the community have been subsidised by the wheatgrowers. Incidentally, the people of Australia should be told the truth concerning subsidisation of the industry. The consumer of wheat and wheat products is protected within Australia both in respect to price and availability. Subsidisation to the consumer of wheat in Australia both in the past and the foreseeable future cannot be over-emphasised. As an example it is reliably estimated for the season 1973-74, with the Australian housewife having the advantage of purchasing bread based on a price of wheat at $1.93 a bushel, she is receiving wheat at almost $2 per bushel less in comparison with the ruling world price. On the amount so utilised this represents a subsidy1 to the Australian consumer of bread of at least $80m for the year 1973-74. Of course history records that in previous years a similar position existed. One can recall cheap wheat for the Australian people for 6s 8d per bushel when the overseas price was approximately £1 per bushel. The Government has paid into stabilisation a sum of $299,236,000 since the inception of stabilisation but the growers have contributed in an effort to level out the peaks and the troughs, the sum of $172,015,000. When one also adds the enormous amount of cheap wheat for local use over many years, it is no idle boast that the industry has been subsidising the population. To deny this is simply to refuse to face up to the truth and to resort to cheap political gimmickry. In an economy where the quality of Australian life is protected by long service leave, arbitration courts, tariffs and subsidies I am not prepared to stand idly by while members of the rural sector are denied this same quality of life. They are not second class citizens as the actions of the Labor administration would seem to indicate. We of the Country Party maintain that the same allowances for increased leisure should be inbuilt into the cost factor of establishing the cost of production of wheat.
I remind the disciples who sit opposite and seek to downgrade the rural sector that the rural sector is still on its knees following years of drought, low prices, and costs over which it had no control. Debts are being repaid, but I point out that a recent survey into the farming sector shows that the annual rate of return on capital on wheat farms now stands at 4.1 per cent, having declined from 5.9 per cent in 1967 and 9.4 per cent in 1962. Wheat production is lower per farm, the overall area sown to wheat for grain has slowed markedly and farm receipts still leave much to be desired. With the world crying out for wheat and staple foods we should be encouraging production not reducing it.
I have long marvelled at the fact that there has never been a flow on to the wheat industry of the principle of the margin of profit factor which is part and parcel of every day commercial life. Why is this not passed on to the wheat industry? This industry is part of the Australian population, not apart from it. I submit that when the new stabilisation scheme is being negotiated this should be included. How else can an industry exist without some effort to” cushion the effects of costs being up and returns down? -The Country Party, of course, supports ‘the moves which assure long term outlets for ‘ our ‘primary products on a commercial basis and riot as a deliberate instrument of foreign policy. But we stand for agreements which do not deny supplies to traditional buyers for many years, and we condemn too great dependence on countries which have proved in the past that they will buy only when it suits them. It is timely to remind the Labor Party that in September last year the Australian Wheat Board sold to the People’s Republic of China one million tons of wheat. I understand that a similar quantity has been negotiated this year. I make the point that this sale was finalised during the life of the Liberal-Country Party Government. Incidentally, total sales to the People’s Republic of China over the past 10 years have been 16,485,600 tons. This gives a veritable rebuttal to the Minister for Overseas Trade and Secondary Industry as he then was, who said that the only body which could negotiate long term contracts with the People’s Republic of China was a Labor Administration. I congratulate the honourable member for Moore (Mr Maisey) on the magnificent contribution he has made in selling wheat to the People’s Republic of China over many years. He was one of the people who blazed the trail. He has made a contribution to the Australian wheat industry which does great credit to himself and to the Party to which he belongs. I seek leave to have incorporated in Hansard a table which shows the amount of wheat sold by the Australian Wheat Board without any government intervention during the period from 1963-64 to 1972-73.
– Is leave granted? There being no objection, leave is granted. (The document read as follows) -
– My final comment concerns the point raised by the Deputy Leader of my Party, the honourable member for New England (Mr Sinclair). The Bill contains a clause which allows the Minister to issue a directive. The people of Australia were appalled at the directive given by the Federal Minister for Primary Industry recently to the Australian Wheat Board to place at risk 25 per cent of growers money with the Egyptian authorities. It is well to remember that there was a 3-year agreement with Egypt which was extended for a further year and became, in essence, a 4-year agreement. It is also well known, particularly by the farmers who were, after all, the people who were hurt in the pocket, that there have been problems with payments. The agreement with the Egyptian authorities does not specify that the sales shall be made on terms. The financial aspects of the agreement are decided in the light of prevailing prices and terms of delivery each year. If effect, there is only a contract to sell a specified quantity. I emphasise that there is absolutely no undertaking to sell on terms. The reason for the inclusion of the clause in the Bill in 1954 was to ensure that the Australian Wheat Board acted in a responsible manner bearing in mind that public funds might be used for stabilisation purposes. For purposes of stabilisiation, the factor is average export prices and any sale which is too low will lower the average and cause a greater public contribution. The power was included to ensure that the best possible sale was made. The Minister - I charge him - has been recreant to the trust placed in him, and his dictatorial action is one of complete irresponsibility. If the Minister wants the wheat industry to be the pawn of foreign policy, it is up to him to pick up the tab and pay the bill. He placed in peril, by his mischievous behaviour, payments to Australian growers. This type of action must be stopped. As a grower I have the utmost faith and confidence in the grower members of the Australian Wheat Board. They are all men like the honourable member for Moore, men of sound practical experience and that is the best university of all. The Minister should not have meddled in their affairs, affairs about which he knows nothing. The grower members, incidentally, are not responsible to him and dictation from him cannot be tolerated. Section 3, paragraphs (a) and (b) of the Act, lays down that the Minis ter shall appoint grower representatives. It provides:
The Minister has no say. He must do what the growers or the Board decide. I am totally opposed to this capricious action of the Minister in interfering with the elected representatives of the growers. The members are responsible to the growers - the growers elect them - and I say to the socialists opposite that the growers own the grain; keep your hands off it.
Rumours are strong that the Labor machine intends to replace elected grower representatives with jobs for the boys. This is anathema to the industry and the very antithesis of what the industry wants. The crops have been marketed very successfully by people who are concerned and interested because it is their own property. Let it stay that way. We will not accept any breaking down of the status quo. The industry denies that the Australian Wheat Board has reneged on a contract, as has been implied by the Labor machine. That is an untruth and a deliberate misrepresentation. The Australian Wheat Board acted with great propriety and meticulous honesty. By his actions the credibility of the Minister will be forever in doubt.
– One of the most remarkable aspects of the speeches made by members of the Opposition - the Country Party and the Liberal Party - is that in their condemnation of quotas, in (heir condemnation of ministerial direction, in their condemnation of the formula in the current Wheat Stabilisation Act they forget that it was their Government which introduced this legislation into the Parliament over the years.
– We handled it better.
– I think that that remark need not be answered.
– You could not answer it.
– You handled it better?
– Let me analyse that type of statement. You introduced quotas. You were the ones who handled it over the years, not we. “ Mr Corbett - We did not force ‘ credit sales of wheat.
– Your Government stopped the full owner-operator allowances, depreciation allowances, interest on land, as well as interest on capital. Your Government stopped that, not this Government. So be a bit careful when you interject. I did not introduce this Bill. It was introduced by my colleague the honourable member for Riverina (Mr Grassby). I intend to dwell on some of the comments that have been made. The honourable member for New England, the Deputy Leader of the Country Party (Mr Sinclair), said, in criticising the Minister for Primary Industry (Senator Wriedt), that the industry had always stood on its own feet. That is really quite a remarkable statement because, after all, the whole principle of stabilisation is to stabilise incomes through prices and to minimise ups and downs, and trying to achieve a stable income for producers through a stable price. There have been serious ups and downs, as has been said. In this current stabilisation scheme something like $129m has been contributed by the taxpayers. Since 1960 it has totalled $285m. In this year the surplus contributed to credit - one might say by the wheat growers - will be an estimated $46m. It is fair to say that in the first 10 years, and I have said this many times in defence of the wheat industry, it has contributed heavily, virtually subsidising the taxpayers of Australia to the tune of $390m. When one takes into account the relationship of the domestic price to the guaranteed price and the world price since the wheat stabilisation scheme was introduced, it is perhaps not true to say that the taxpayers of Australia have subsidised the wheat industry. I accept that, but the point 1 am making is that there have been serious ups and downs, and this is in fact the whole reason for stabilisation. This is where I part company with the honourable member for Wakefield (Mr Kelly) who, from the impression I got, was opposed to stabilisation. If he casts his mind back to approximately 4 years ago - most of his comments today were trenchant criticism of quotas - he did not make any criticism of quotas at that time when it was extremely difficult to sell surplus wheat. After all, it was the industry and the States which agreed on quotas. The Australian Government has no power to impose quotas. That is entirely the responsibility of the States, except in the case of the Australian Capital Territory and the Northern
Territory. What the Australian Government can do, through the’ first advance payment and the total liability, is’. in effect to fix a quota. It does that indirectly. Let us at least get the facts straight.
One matter on which I take issue with the Deputy Leader of the Country Party is that he said that in the present proposal there is no provision for an increase in the home consumption price of wheat, whereas previously there was provision to grant an increase in the home consumption price of wheat by making a variation in the movement of cash costs. This is not true, because clause 9 of the Bill provides that the home consumption price can be adjusted by the Minister from 1 December, taking into account the movements in these cash costs, which are prices, wages, interest charges and transport, handling and storage charges,’ etc. Provision is made for those costs. Reference is also made to them in, I think, clauses 2 and 27 of the present Bill, although I could be wrong in relation to the numbers of the clauses. Certainly it is not true to say that the domestic price of wheat will not be varied by changes in cash costs; they will. Of course, it is true to say that the domestic price of wheat will not be varied by increases in the movement of total costs, which include the. owneroperated allowance, depreciation, interest charges on land, interest charges on structures and interest charges on plant. I remind the honourable member for Darling Downs that it was his Government that took out that provision, not this Government.
– Did you agree with it?
– I did agree with it, and so did the honourable member’s Leader and everybody else in this House, and I will explain why.
– I did not.
– I will look at the honourable member’s speech. He did not vote. If I remember rightly - I will look at the record - he walked out; he did not vote. Is that not right?
– That is right. I walked out of the House and would not support it.
– The honourable member showed his disgust in that way, but he should have voted. Let me explain to the honourable member for Darling Downs why honourable members supported the proposal not to increase the guaranteed price and the domestic price of wheat Dy variations in the movement of total costs;- One of the greatest problems in measuring . the costs of production of wheat was, firstly, that one had to put an imputed figure on the value of land. At times when there was.. an increase in the domestic price of wheat, when the economy was good in terms of . wheat production, the value of land increased; and interest charges increased. It was like the dog chasing its tail all the time. It was an extremely difficult concept; it was a concept which in the end the industry agreed was a fictitious one. It had no relationship to the world market price of wheat and it had no real relationship to the guaranteed price.
Somebody once said that if you took a figure out of the telephone book you could get the average yield. In other words, one could vary the cost of production by whatever yield only wanted to take. If you took 19, 20 or 21 bushels, who could say which was the true yield to take? Nobody could say what the true yield was. In other words, the cost of production figure became a political plaything. This was accepted by the industry, by the previous Government and by the then Opposition. The best way to overcome this problem was to be realistic and, in fact, to take the actual cash costs that the farmer had to pay and vary those costs by movements in the measurement of price relatives and by an index. That movement in the indices showed an increase or a decrease in the cash costs.
One might say that that does not take into account the owner-operator allowance. That is true, it does not take that into account, but it is the relative figure, not the absolute figure. If those cash costs move by 3 per cent or 4 per cent, that percentage is applied to the increase or decrease in the domestic price of wheat. I believe, and the industry believes, that this is the best method. It is not a foolproof method, but at least it is a method which I think illustrates a fair adjustment in the movement up or down in the actual costs paid. If one is going to put interest on the value of land, what does one take as the value of land? What interest rate do you charge today? Is it 10 per cent or 1 1 per cent or 4 per cent? All I am illustrating are the difficulties involved in this matter and the criticism which has been levelled at the wheat industry over the years. In the end it was the industry that accepted this; it realised the difficulties involved.
I want to deal now with .the section in the parent Act which refers to directions given by the Minister. It would seem from the criticism levelled at the Minister for Primary Industry (Senator Wriedt) that it was this Government that introduced that particular section into the Act. The facts are that the Labor Government introduced into the Wheat Stabilisation Act of 1948 a section which provided that the Board may, subject to any directions of the Minister, do certain things. At the time members of the present Opposition considered that that was not clear. In 1954 the then Leader of the Country Party, Mr McEwen - in actual fact, I think that Sir Philip McBride introduced the Bill, but certainly Mr McEwen was Minister for Commerce and Agriculture - proposed an amendment which made it quite clear what the authority of the Minister was to intervene on certain things. I will read what Sir Philip McBride said in his second reading speech. He stated:
Honourable members will note that there is a provision in the Bill which will enable the Minister for Commerce and Agriculture -
That was before the Department of Commerce and Agriculture was divided into the Department of Primary Industry and Department of Trade - to issue directions to the Australian Wheat Board on wheat-selling policy, if that should prove necessary at any time. It is far from the Government’s intention that this should open the way to government interference in the wheat-selling operations of the Board, but it will be obvious to honourable members, and it has in fact been clearly stated to the Wheat Growers Federation, that as the Australian Government assumes the financial responsibility of guaranteeing the plan from public revenue then, in the interests of the taxpayers generally -
This was the former leader of the Country Party-
– It was Sir Philip McBride, I think you will find.
– It was written by Mr McEwen.
– That was Sir Philip McBride who made the statement.
– The honourable member knows as well as I do that if I introduce a second reading speech concerning primary industry, they are not my words but the words of the Minister for Primary Industry. Sir Philip McBride was representing the Minister for Commerce and Agriculture. Let us not quibble about that and say that Mr McEwen did not say it. The honourable member knows full well that Mr McEwen did say it. They were his Department’s words, and he okayed them. The quote continues: it cannot be indifferent, for instance, to the price at which the Board may be willing to sell wheat at some particular time or to some particular market.
That is the section of the Act which is in question. That amendment was introduced by the Liberal-Country Party Government - not by this Government - to give a clear meaning to the Act in order to allow the then Minister for Commerce and Agriculture to intervene in policies concerning wheat trade when he thought it necessarily to do so.
There has been lengthy discussion concerning intervention as regards Egypt. As I understand the position - and what I have heard today has not changed my view - it was extremely difficult to sell wheat at the time. It was at a time when the Chinese market temporarily folded up. There was this 3-year arrangement with Egypt.
– As to quantity.
– As to quantity, but if the honourable member recollects what happened at the time, the terms were for 3 years. When this Government came into office it adopted the policy that, as regards developing countries we have an obligation to try to help them. We realise that they have balance of payments difficulties, and we believe that there ought to be credit sales for up to 12 months. This was accepted by the Wheat Board and it was conveyed to the Egyptian Government. When hostilities broke out between the Arab States and Israel the Board reversed its decision. It wanted cash.
– It had not made a decision to reverse it.
– It did make a decision to reverse it. If the honourable member wants proof of that I will show him the relevant letters. The policy of the Government was to adopt an even-handed approach in that conflict. It was then that the Minister for Primary Industry informed the Wheat Board of the Government’s decision. Let us get the facts straight because some misleading statements have been made. Agreement was reached approximately 2 weeks ago between the Egyptian Government and the Wheat Board on the sale of one million tonnes to be shipped next calendar year. Under the terms of the sale there is to be a period of 18 months credit with the Board carrying 25 per cent of the credit risk, the Export Payments Insurance Corporation being responsible for $10m, and the Government covering the balance under the national interest provisions of the Export Payments Insurance Corporation Act. When the Chairman of the Wheat Board announced this agreement he said the wheat would cost in excess of$130m on an f.o.b. basis. Let us at least stick to the facts. The decision of the Government and the intervention of the Minister for Primary Industry was a responsible decision in terms of foreign policy and in terms of this Government’s policy in relation to developing countries.
I just want to refer in passing to the sugar industry in order to reply to the honourable member for New England, the Deputy Leader of the Country Party, who said that the groundwork in relation to wheat sales was really done by the Wheat Board. I will not argue against that. The Minister for Overseas Trade has made the position quite clear. However, I join issue on the claim by the honourable member that this also applied to the sugar agreement. I do not want to carry on a debate on sugar, but let us at least stick to the facts. First of all I did not intervene in anything. I was asked by the sugar industry before I went to China to do 3 things. Firstly, I was asked to secure, if I could, permanent access for Australian sugar. The industry had been trying to do this for some time but it had failed. Secondly, I was asked to try to get the Chinese Government to upgrade its bulk handling facilities.
– I rise on a point of order. Is the Minister allowed to speak about sugar sales?
– As I understand it, the Minister is making a passing reference only to certain comments made earlier in the debate by the Deputy Leader of the Country Party, and to that extent I will allow him to continue.
– The third thing I was asked to do was to get a team of Chinese experts to come to Australia to study bulk receiving facilities. I achieved those 3 things for the industry. Let me quote from an official Press statement issued by the industry. It reads:
As a result of the Peking discussions with Dr Patterson, the Chinese Government had agreed to pro- o vide long-term access for Australian sugar.
The sugar industry representatives told Dr Patterson that they welcomed the initiative he had taken with the Chinese Government which had achieved the basis for long-term access to the Chinese market for Australian sugar. This achievement has now set the stage for the negotiation of detailed terms of an agreement and related commercial contracts.
That is what the industry had to say. I have always - and I do so again - paid a tribute to the Colonial Sugar Refining Co. Ltd for the pioneering work it has done in the last 2 years on aspects of our trade with China, particularly with respect to bulk handling facilities. I gave credit to that company when I was in China too.
– That company initiated the talks with the Chinese 3 years ago.
– At no stage did it talk about long term agreements. At no stage did it talk about quantities at all. If the honourable member wants to check up on this he should ask the sugar industry itself. I will say no more about this matter. One of the doubts raised by the honourable member for Moore (Mr Maisey) was about what happened to the money which would be retained in the Fund. Clause 12 of the Bill seeks to amend section 32 of the Act by providing that money in the Fund at 30 September 1974 will go forward as credit into any new stabilisation fund. This is what the industry wants. This is what it suggested in its proposal for a new stabilisation scheme. However, if there is no stabilisation scheme the money will be refunded or returned to the industry under the provisions of section 32 of the Act. This is set out in the Bill.
Practically all the remarks of the honourable member for Wakefield (Mr Kelly) were an attack on the quota system. Certainly there are grave deficiencies in that system. It is one thing to talk about them now. But why was not this trenchant criticism levelled by the honourable member at a time when there was a great surplus of wheat and when the Australian Government was charged with the liability of meeting the first advance payment? No Australian Government, including the Government that represented Australia for 24 years, or this Government would agree to an open ended liability, that is, having a first advance payment without a liability as far as the ceiling was concerned. No government would do that, and that is why the quotas were introduced. We could have had double the production if we had wanted it. But we would not have got $1.10 a bushel or whatever the amount was for the first advance payment; it would have been much less than that.
Order! The Minister’s time has expired.
Question resolved in the affirmative.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.
Clauses 1 to 7- by leave-taken together, and agreed to.
Proposed new clause 7a.
– I move:
After clause 7, insert the following new clause: 7a. Section 13 of the Principal Act is amended by omitting sub-section (3) and substituting the following sub-sections:
The Minister may disallow a sale or disposal or agreement for the sale or disposal of wheat, wheaten flour, semolina, corn sacks, jute or jute products which in his opinion provides for a price or conditions which would provide for less than a reasonable market return. (3a) The Minister shall table in both Houses of the Parliament within fifteen sitting days of a disallowance of a sale or disposal or agreement for the sale or disposal of wheat, wheaten flour, semolina, corn sacks, jute or jute products a statement of the reasons on which his disallowance was based.’.
I have moved this amendment because there has been some discussion during the second reading stage in regard to the difference between the1948 and the 1954 legislation. Significantly our concern on this side of the chamber is as to the pattern of ministerial invervention. As one who believed that there was a commercial arrangement between Egypt and the Australian Wheat Board, there were some aspects of the Board’s withdrawal from the original negotiations with Egypt which concerned me. Any reservations about it were removed by the statement this afternoon by the Minister for the Northern Development (Dr Patterson). He overtly admitted that the only reason for the intervention was to ensure that his Government, the Labor Government, might pursue an even handed approach in the Middle East conflict.
I see no ground for an intervention on that basis, particularly in the circumstances where the Australian Wheat Board had been concerned about the flow of payments from Egypt on past sales, where there was concern which had been expressed to the Wheat Board by the Export Payments Insurance
Corporation about the risk of markets in the Middle East and in other parts of the world and where the Wheat Board was trying to ensure that the interests of wheat growers would be protected. The intervention by the Government in the way it did is the first occasion on which the present provisions of section 13 (3) of the principal Act have been so applied.
Because we believe that it was not intended by Mr McEwen, as he then was, and Sir Philip McBride who introduced the legislation on his behalf, that that legislation should apply in this form, we have moved this amendment which will ensure that the ministerial power is restricted to the area where the Wheat Board can and should be directed only if the interests of taxpayers or the interests of wheat growers, insofar as the sale covers a price or conditions less than a reasonable market return, are concerned. The amendment, if carried, will ensure that the Australian Wheat Board is subject to ministerial direction but that the interests of wheat growers and taxpayers can be protected. The ministerial power will be restricted in a narrow confine which relates particularly to areas where it would seem reasonable for it to be capable of being applied.
This power has not been exercised in the past by any previous government. Indeed, the only occasion when such a direction has been given in the past was way, way back in 1946. Then, the Labor Minister for Commerce and Agriculture entered into an agreement to sell Australian wheat to New Zealand for a period of 4 years to 5 years at a price of 5s 9d a bushel, which was significantly below the world market price. The transaction apparently was made secretly behind the back of the Australian Wheat Board and without its approval. That is the only precedent that I have been able to find for the action taken by the present Labor Administration. I believe that, in light of the Egyptian sale and the earlier sale to New Zealand, there is a good reason for this amendment to be moved.
There is a further reason for proposing this amendment. It relates to our philosophic approach, probably one of the fundamental points of variances between this side of politics and the Labor Party. We believe that the people who are involved in business, the people who are the producers or a commodity, should be given the responsibility of handling and selling it. We do not believe that the responsibility is that of the Government. The cross words that I have had with the Minister sitting at the table over sugar, as with the words that we have had over wheat, relate to the degree to which a government, by intervention, is disrupting the normal flow of commerce and the normal commercial negotiations between those who should be responsible - the people, in the market place - and the Government which is there as the political leader and as such taking different judgments in the market place. It is our opinion that ministerial directions reflecting political decisions alone are anathema to the normal pattern by which we see the best interests of producers and others in the Australian community, including Australian consumers and certainly including Australian taxpayers, being protected.
One of the reasons I have mentioned the intervention of the Minister for Overseas Trade (Dr J. F. Cairns) is the reservation I have because he in fact implied almost by way of blackmail to Australian wheat growers that if there should be a change of government there would be no future sales to China. lt is that type of political intervention which we believe is unjustified and unwarranted. To ensure that it cannot be undertaken by a government that seems to be committed to that sort of non-commercial practice, I have moved the amendment standing in my name. I believe that it will remove from the ambit of any suggestion of ministerial or political intervention the powers of the government of the day to intervene in the valid proceedings of the Australian Wheat Board.
I believe that the Australian Wheat Board should be permitted to carry on its functions in the way in which the Act entitles it so to do. I do not believe the fact that this provision was introduced by an earlier Country Party Minister has as much importance as has the fact that the power was never used. To me, the important aspect is that if the power had been used in the past it would have been used with restraint and in a non-political manner. Out of the Minister’s own mouth this afternoon has come the information that the ministerial intervention with respect to wheat sale-, to Egypt has been purely and simply motivated by political purposes. This has demonstrated the validity of our reason for introducing this amendment. It is for that reason that the Opposition believes that the original legislation should be amended and that this changed form of words should be inserted to place the necessary restraints on the abuse of power which we believe the Labor Government has used in this instance.
– The Government rejects the amendment. Again, I will have to answer certain statements that have been made. In my earlier reply, I gave the reasons why the Australian Government had adopted an even handed approach between the Arab States and Israel. These reasons were made quite public by the Minister for Primary Industry (Senator Wriedt) in a Press statement released on 30 October 1973. Let me read from that Press statement. It states:
When fighting broke out, the Board reversed its earlier decision-
As somebody said, it welshed on the decision to which it had already agreed and of which it had notified the Egyptian Government. I return to the Press statement:
When fighting broke out, the Board reversed its earlier decision and indicated to the Government that any business transacted with Egypt would need to be on a cass basis. The Board also indicated that if the Government wishes credit terms extended to Egypt, then the costs and risk in full should be borne by the Government.
The Minister had replied to the Board that the Australian Government’s attitude to the hostilities was that it should have an even handed approach to both sides and should show preference to neither. To agree to the Wheat Board’s changed negotiating position with Egypt would have been inconsistent with this neutral approach, the Minister said.
The provision in the Act which the amendment seeks to change was first introduced in 1948. The previous Government took the view that that section was not explicit enough and in fact made a further amendment to it. As was stated quite clearly by Sir Philip McBride on behalf of Mr McEwen, as he then was, that amendment was made to protect the taxpayer. To illustrate the point further, as I mentioned earlier, since 1960 a total of <$285m has been paid by the Government to the wheat industry for stabilisation scheme purposes. As I made it quite clear, the industry also has contributed its share, almost $400m in the first 10 years of the scheme, as the difference between the domestic price, the guaranteed price and the world price. This year, the industry will contribute about $46m. As these tremendous amounts of money, which could mean very large contributions and liability by the Government, are involved this Government insists, just as the previous Government did, that this section should remain as it is in the Act. For that reason the Government rejects the amendment.
– I support the amendment moved by the honourable member for New England (Mr Sinclair). I do so for several reasons. The first is that the authority to market the Australian wheat crop firmly belongs with the Australian Wheat Board which has 10 grower members who are democratically elected by the vote of the rank and file in 3 States. The legislation allows for the representatives from Queensland and Western Australia to be appointed by the respective State wheat boards. The Australian Wheat Board is the bridge, as it were, between the grower on the one hand and the consumer and purchaser on the other hand. It must be remembered that the Australian wheat crop is not the property of the Australian Government but is held in trust for the growers bv the Australian Wheat Board.
The only interference which should ever come from any Minister of the Crown is when any action of the Australian Wheat Board - and this has never happened - could result in the Australian Government contributing to the funds of the Australian Wheat Board a share of taxation revenue that it would not have had to contribute if the Australian Wheat Board had made a different decision. I want it spelled out specifically once and for all .that that is the only occasion on which a Minister should interfere. I make the statement again, and repeat it for greater emphasis, that if the Australian Government seeks to use the product of the Australian wheat farmer as an instrument of foreign policy it is the responsibility of the Australian Government to make up the leeway in overseas payments. I for one will not disagree with the principle that those who live in countries of affluence and plenty have a responsibility to supply the wherewithal and the means of existence to impoverished countries, but it is not the responsibility of the Australian wheat producer to supply his product free of charge; it is the responsibility of the Australian population as a whole. I am concerned that if the power remains in the Act for the Minister to interfere in the affairs of the Australian Wheat Board and that provision is not qualified by the amendment moved by my colleague, the honourable member for New England, the situation could be reached in which a dictatorial governmentcould insist on the Australian Wheat Board selling, on a long term contract basis, its product to one country. We cannot allow a situation to develop in which our traditional consumers and purchasers of grain are denied access to a supply because of the trading policies, the foreign policies and the defence policies of a Labor government.
I ask the Minister for Northern Development (Dr Patterson) to spell out specifically once and for all the answer to my query on whether the Australian Wheat Board reneged on a contract. I say that the Australian Wheat Board at no stage had officially affixed its seal to a contract this year to supply wheat to the Egyptian authorities and then reneged on that contract. My information is that the contract with Egypt was signed only a few weeks ago. A decision may have been made at a meeting of the Australian Wheat Board to do certain things, but I will take up the cudgels on behalf of members of the Australian Wheat Board and nail once and for all the deliberate misrepresentation, as I see it, by those who sit opposite who say that the Australian Wheat Board welshed on a contract. It did not welsh on a contract because it had not signed a contract. The situation when the Wheat Board decided to supply wheat to Egypt for 3 years plus a one-year extension, was that it would supply wheat on the terms on which it had previously supplied it. In the meantime hostilities involving Egypt broke out, and I think it is to the credit of those responsible members of the Australian Wheat Board that they saw fit to rethink their original decision with the prime purpose of safeguarding the dollar income of the Australian farmers. True it is, if this is not the situation, that the Minister has a responsibility to let us know what the situation is, but it ill behoves him if he says that the Australian Wheat Board welshed on a contract, when in fact it had not signed a contract.
– Let me make the position clear. The honourable member for the Darling Downs (Mr McVeigh) obviously has principles different from those that the Government has, and I would think also different from those that the Australian Wheat Board has. What he said is true. A contract with Egypt was not signed. But it is a question of the way in which the honourable member thinks contracts should be made. The Wheat Board agreed to supply wheat to Egypt for 12 months, and that decision was conveyed to the Egyptian Government.
– A contract was not signed.
– That may be the honourable member’s way of making contracts. If his word is not as good as anyone else’s so that a contract must be signed, I do not know how he will get on in life. It is rather remarkable that there should be criticism that we are interfering with industry. Honourable members opposite say: ‘Do not interfere with industry’. Apparently they believe that industry should have a free hand in matters of trade, but they ask the Government to make sure that it pays a first advance to wheat growers. Are they prepared to give the first advance away? Of course they are not. They want Government interference for a first advance.
– That is under agreement You whacked the interest up.
– Does the honourable member not want wheat quotas? It was his Government that applied quotas. Now he says: ‘Do not interfere with the industry’. The most efficiently organised primary industry today is the sugar industry, which is rigidly controlled. Would the honourable member tell Mr Bjelke-Petersen to take the quotas off sugar? Of course he would not. If he did, he would not last 2 minutes in that State, because it has been proved - the same argument applies to tobacco - that with commonsense and co-operation between a government and an industry you will get good results.
That the clause proposed to be inserted (Mr Sinclair’s amendment) be inserted.
The Committee divided. (The Chairman - Mr G. G. D. Scholes)
Majority . . . . 12
Question so resolved in the negative.
Clauses 8 to 13 - by leave - taken together.
suggested that in my comments during the second reading debate I was saying that there was no element providing for a variation in the home consumption price. Perhaps my wording might not have come through clearly to the Minister. What I intended to imply was that it was unfortunate that, at a time when world grain prices - particularly world wheat prices - were so high, no element of variation in world prices was involved in the way in which the home consumption price was assessed.
I acknowledge the changes that have been made between the present cash against costs formula and the earlier imputed cost formula, but the point I was attempting to illustrate was that, at a time when world prices are so high, the domestic consumer is given substantial protection under the provisions of the legislation as it is now applicable and under this extension. While there is an element of reason in this measure, largely because of the balance between the contributions of the wheat industry on occasions and of the taxpayers on other occasions, it is unfortunate that, at a time when world prices are so high, the wheat grower should be denied most opportunities of benefiting from that high price. Of course, that is one of the penalties he pays for a stabilisation scheme. The reference I made was intended to illustrate the difference between the world price and the domestic price, and the fact that under this legislation there was no basis by which the world wheat price could be written into the assessment of the home consumption price.
– I accept the comments made by the Deputy Leader of the Australian Country Party (Mr Sinclair). However, I think he would agree that if there were a violently fluctuating domestic price in the stabilisation scheme - say, if the present domestic price were $3 a bushel - there would be serious political repercussions among the people who consume most if not all wheat sold for Australian home consumption. They are predominantly the lower and middle income groups who consume bread, meat and poultry foods. I do not disagree with the principle. In fact it has been shown time and again that the difference between the domestic price and the world price is a significant factor in proving one way or another who subsidises what.
Clauses agreed to.
– As honourable members will be aware, the continuation of the wheat industry stabilisation arrangements requires that the States pass complementary legislation. Following discussions between the Parliamentary Counsel’s office and the State counterparts, it has been agreed that certain minor amendments should be introduced to the
Wheat Industry Stabilisation Bill 1973 to overcome objections raised by the States: I move:
– Is the Minister seeking leave to deal with both amendments together?
– Is leave granted? There being no objection, leave is granted.
– I thank you, Mr Chairman, and I thank the Committee. I refer to sections 18 and 20 of the principal Act. It is considered that the simple metric conversion proposed to be made by the Schedule to the Bill in its present form is unsatisfactory. Firstly, it results in prescribing an incongruous amount - $183.72 - as one of the penalties. Secondly, it is not entirely clear that the penalty applies in respect of a quantity of wheat that is less than 1 tonne. The second amendment corrects certain errors in the cross reference in the principal Act as proposed to be amended by the Bill.
Amendments agreed to.
Schedule, as amended, agreed to.
Title agreed to.
Bill reported with amendments; report - by leave - adopted.
Bill (on motion by Dr Patterson) - by leave - read a third time
Consideration resumed from 10 October (vide page 1829), on motion by Mr Grassby:
That the Bill be now read a second time.
Question resolved in the affirmative.
Bill read a second time.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Dr Patterson) read a third time.
– I move:
The Government has already announced its decision on the Tariff Board’s report on consumer electronic equipment and components, including colour television receivers. Customs Tariff Proposals No. 18 (1973) which I have just tabled give effect to that decision. The Board’s report was tabled in the House on Tuesday, 20 November. The Government has accepted the basic thrust, the substance, of the Board’s report to reduce rates of duty significantly. Subject to international commitments the new rates will be 35 per cent. The Board had recommended 25 per cent on most imported electronic components and 30 per cent on imported made-up appliances, including monochrome and colour television receivers, radios, radiograms and gramophones. The old rates of duty on these items were 33.75 per cent plus $37.50 on television receivers, 33.75 per cent plus $7.50 on radio receivers and 33.75 per cent on components. In addition most components attracted specific rates.
I should stress that the tariff changes arising out of this report are consistent with one of the fundamental long term economic objectives this Government has. The Government believes a result of the reduction in tariffs will be an improved allocation of Australia’s resources and an increase in the level of real economic growth, to the betterment of the whole community. I say at this point that I hope that no onewill claim that there is any uncertainty or ambiguity about the tariff rates that have been imposed. On all of the many items that were subject to reference to and report by the Board the new rates will be simply 35 per cent. The effect of this action - I suggest there is not much room for argument - is that the retail price of these items in the future will be less than otherwiseit would have been as a result of the tariff reduction.
The Government accepts that the new tariff rates will produce some changes in employment. However, it does not believe that these should lead to any net reduction in the level of employment in the industry as a whole, although it may change the proportions of skills in the industry and incomes. The Government has decided that assistance will be made available to firms and employees harmed by the proposed changes. Details of assistance and eligibility will be announced after the completion of the Government’s general assessment of adjustment assistance principles, which will be completed soon. If necessary, interim assistance arrangements will be implemented. The Government has also announced that it will introduce appropriate subsidy assistance to maintain, at least until the Tariff Board report on professional electronic equipment is considered by the Government, the production in Australia of selected electronic components, which are or could be important for their defence, telecommunications or technological significance.
I also tabled Customs Tariff Proposals No. 19 (1973) which contain amendments arising from the Government’s acceptance of reports by the Tariff Board on engines, motors, pumps and valves, etc., and fire hose. The Tariff Board has recommended an industry level of protection of 35 per cent general on the bulk of local production of goods covered by its report on engines, motors, pumps and valves etc. However, to allow the Australian industry time to adjust gradually to this reduced level of assistance, the Board recommended that the duties be reduced to this level over 4 years. The Board has concluded in relation to the major products covered by the report, pumps and valves, that there is a need for some rationalisation of the number of producers and specialisation in the range of goods produced. The Board considered that these actions, combined with efforts to expand export sales, should allow manufacturers to achieve higher volumes of production with a resultant situation where economic and efficient manufacturers would be able to produce under a general tariff rate of 35 per cent.
The Tariff Board drew attention to what appeared to be ‘considerable scope for more local manufacturers of the goods under reference to develop export sales as a means of obtaining a more efficient and economic use of existing plant and other resources’. The Department of Overseas Trade, in consultation with the Department of Secondary Industry, will investigate the export prospects for the products concerned. Because of a commitment accepted by Australia in past negotiations under the General Agreement on Tariffs and Trade, the Government has decided not to increase the general rate of duty on pumps specially designed for use in the mining and metallurgical industries.
In its report on fire hose the Tariff Board recommended that all textile hose piping and similar tubing with an internal diameter of 110 millimetres or less should be dutiable at 20 per cent and that goods of larger diameters should be admitted free of duty. As both these reports were received prior to 19 July 1973 the duties will be subject to the provisions of the 25 per cent tariff cut. The new duties will operate tomorrow.
In accordance with Australia’s trade agreements a margin of preference of 5 per cent is being provided in favour of New Zealand on non-protected items. However, as agreed with New Zealand, provision is being made for these goods to be admitted free of duty under by-law, it being understood that the matter would be reviewed in the event of representations from New Zealand and to the effect that it had an important or substantial trade interest in the goods concerned. A comprehensive summary of the changes and duty rates is being circulated to honourable members. I commend the Proposals.
Debate (on motion by Mr Fairbairn) adjourned.
Reports on Items
– I present the reports by the Tariff Board on the following subjects:
Engines, Motors, Pumps and Valves, etc.; and Fire Hose.
Ordered that the reports be printed.
Report: Turtle Fanning in the Toms Strait Islands
– On behalf of the Standing Committee on the Environment and Conservation, I present the report of the Committee on turtle farming in the Torres Strait Islands.
Ordered that the report be printed.
– I seek leave to make a short statement in connection with the report.
- (Mr Berlnson)- Is leave granted? There being no objection, leave is granted.
– The report I have just tabled is the second from the House of Representatives Standing Committee on Environment and Conservation. The inquiry results from a reference from the Minister for the Environment and Conservation (Dr Cass) in June 1973 into the farming of turtles in the Torres Strait Islands, with particular regard to the International Convention on Trade in Certain Species of Wildlife. The Torres Strait farming project is based on the exploitation of 2 species which are referred to in the Convention, the Green and Hawksbill turtles.
Our inquiry considered firstly whether the farming operation is compatible with the Convention, and secondly whether the scheme, even if achieving its commercial aim, is making a substantial contribution to the conservation of the species. The Committee held public hearings in August and September and planned to visit the Torres Strait in late August. However, the Prime Minister, for a number of reasons, requested us not to do so at that particular time. The Committee agreed to defer its visit. I would point out that the geographical isolation of the islands, together with their status as Aboriginal reserves, appear to have been the principal factors restricting independent assessment of the farming project to date.
I now refer to one of the most disturbing features which arose during the Committee’s inquiry, and one which I believe indicates a lack of respect for this Committee and for the Parliament which created it. During late September we became aware that, without reference to or consultation with the Committee, an inquiry had been commissioned through the Department of the Special Minister of State into the very matters which the Committee already had before it. The Committee, therefore, at a meeting on 27 September resolved to discontinue its inquiry and report on the basis of evidence received to that point. To proceed further would have seemed to involve wasteful duplication. This report, therefore, is tabled with the knowledge that in other circumstances a great deal more information would have been sought
At this point I would like to express the profound dissatisfaction of all Committee members for the manner in which the work of the Committee has been overridden. During the inquiry the Committee received evidence of serious financial maladministration of the entire project. Rather than carry out an indepth study of these allegations which appeared to the Committee to be outside the direct scope of our inquiry, the Committee referred these matters to the Minister for Aboriginal Affairs with the suggestion that the Auditor-General should carry out an inquiry. I understand that such an inquiry is proceeding.
Returning to the subject matter of the report, I would like to make some brief comments and outline the Committee’s principal recommendations. The turtle farming project when initiated, seemed an ideal way of developing a cottage type industry in an area of serious underdevelopment and lack of employment opportunities, with the benefit that it would bear a close affinity to the traditional life style of the Island people. It was also planned as a positive step towards conservation of 2 species which are very seriously depleted.
The scheme proposed that Hawksbill turtles would be stuffed and sold as curios at retail prices of up to $40 each. It was expected that by June 1973 3,000 Hawksbill would be available. In fact a total of 184 had been produced by that date. In relation to the Green turtle, which was to be produced for the ‘lucrative’ turtle meat market, the project aims have also not been realised. Growth rates, health and the production of Green turtles have not lived up to expectations.
Some criticisms have been made of the administration and management of the project and by implication of the Department of Aboriginal Affairs for not having carried out more groundwork before initiating the project and for continuing to justify it and increased allocations of funds to support it when it had clearly not been a success. There has not been a great deal of criticism of the project by the Islanders involved in it. However the principal reason for this appears to be that, badly off as they are, at least turtle farmers are assured of a regular wage, irrespective of the success or otherwise of their farm.
The Committee concluded that, despite the expenditure of at least $574,000 to June 1973, the turtle farming project, no matter how idealistically conceived, had not achieved its objectives and did not appear likely to do so. Failure to research the project from either an environmental or commercial viewpoint and lax administration have resulted in the haphazard growth of poorly equipped farms run by untrained farmers. The effect on the turtle population is difficult to assess in the absence of records of egg collection and hatching mortality. However, we believe the scheme as presently operating is unlikely either to achieve its commercial aims or to make a substantial contribution to the conservation of the 2 turtle species concerned.
The Committee also concluded that emphasis in the turtle farming project should be away from that of a commercial enterprise to conservation or ecological research. I believe on this basis other species could also be investigated. The Committee does not share the view that, to protect the wild species, animals must be farmed. If research can show that wild turtle populations are sufficiently high to enable commercial harvesting without detriment to the species, this could be considered again.
Among the Committee’ s principal recommendations are: That the turtle farming project in the Torres Strait Islands cease as a ‘commercially’ orientated undertaking; that the project become one based on research into the ecology of the Green and Hawksbill turtle and on conservation per se; that the number and quality of ‘farms be rationalised, and that water reticulation and access to freezer facilities be essential features; and that the research and conservation project be placed under the control of a scientist not associated with the present commercially based operation. I should like to thank the members and staff of the Committee for their work and the interest they have shown in this inquiry and in the production of this report.
Motion (by Mr Daly) proposed):
That the House take note of the paper.
Debate (on motion by Mr Lynch) adjourned.
The following Bills were returned from the Senate:
Without amendment -
States Grants (Capital Assistance) Bill 1973.
States Grants Bill 1973.
Social Welfare Commission Bill 1973.
States Grants (Housing Assistance) Bill (No. 2) 1973.
Mental Health and Related Services Assistance Bill 1973.
Without requests -
Wheat Tax Bill 1973.
Bill received from the Senate, and read a first time.
Bill received from the Senate, and read a first time.
Debate resumed from 30 August (vide page 653), on motion by Mr Crean:
That the Bill be now read a second time.
– The Bill before the House seeks to amend the Income Tax Assessment Act to eliminate the use of Norfolk Island and, to a more limited extent, of Papua
New Guinea, for tax haven purposes. The amendments proposed for Norfolk Island will also apply to Cocos (Keeling) Islands and Christmas Island.
Under the terms of this legislation Australian income tax laws will apply to the Territories - Norfolk Island, Cocos (Keeling) Islands and Christmas Island - as if they were part of Australia. The Bill’s provisions will continue to exempt from tax the island and other ex-Australian income of people who live on the island and are not resident in Australia for tax purposes.
The legislation provides for three main exemptions: Territory residents and trusts are to be exempt for income derived from sources outside the Territories and outside Australia; Territory residents, Territory companies and Territory trusts are to be exempt for island source income; and persons not qualifying as Territory residents but resident in one of the Territories for periods exceeding 6 months are to be exempt in respect of employment income.
The Bill contains a number of supplemental measures which, in general, seek to prevent the exploitation of the new provisions. In addition, there is a transitional measure to assist island companies that now have a degree of non-island ownership but wish to re-organise their affairs to retain tax exemption. In this respect the Bill provides for a partial exemption for income derived up to the end of the 1973-74 income year for a company that becomes fully island-owned and controlled during the last 6 months of 1973-74.
The provisions relating to Papua New Guinea seek to prevent tax evasion by Australian private companies through the payment of such companies of dividends to special repository’ companies set up in Papua New Guinea, where undistributed profits tax is not levied on private companies. The Bill will make dividends paid by an Australian private company to a private ‘repository’ company resident in Papua New Guinea ineligible to be counted as a dividend for the purpose of calculating whether the Australian company has a liability for undistributed profits tax. This will not affect dividends paid to a Papua New Guinea company in circumstances, as defined in the Bill, which do not involve tax avoidance,
This legislation was foreshadowed by the Leader of the Opposition (Mr Snedden) as Treasurer of the former Government. On 19 July 1972 he stated:
The Government has been concerned for some time that some persons may be able to arrange transactions in such a way as to exploit Norfolk Island’s present taxation status. Much has been done administratively to counter these arrangements but there is a complex situation which has led to the conclusion that legislative action is necessary to protect Australia’s income tax revenue. The Government has a responsibility to act to prevent inequity arising when some people are able to take advantage of the special tax status of the island in a way which was not intended to be available and which is not open to the great majority of taxpayers.
The Government acknowledges that it would not bc justifiable to make people actually living on the island subject to the same income tax as they would have to pay if they lived in Australia. It sees its task as one of striking a reasonable balance between maintaining the present exemption for genuine residents of the Island and preventing that exemption from being exploited by persons not intended to benefit from it.
Consistent with that statement, the Opposition supports the Bill before the House. We recognise that the present tax law relating to the Territories is open to abuse by persons seeking to minimise or eliminate completely the tax for which they are liable. We are aware also that the cost to Australian revenue each year as a result of such tax evasion is considerable. However, we wish to emphasise that the proposed legislation could have deleterious effects on certain sectors of the Norfolk Island community. This could be exacerbated if the legislation is applied with absolute rigidity.
We believe that in implementing this legislation the Government must adopt a sympathetic and flexible approach. In the case of Norfolk Island, genuine trading concerns owned outside the island but deriving all income from the island will have to adjust from circumstances of no tax liability to a liability for Australian company tax of 471 per cent. At the same time, such enterprises would have to compete with island-owned and controlled companies paying no tax. Obviously such a situation may result in the liquidation of certain enterprises, possibly to the detriment of the island. Alternatively, it may result in considerable price increases thereby creating a source of inflation for the island.
The Government would be aware that the island’s major hotels, including the two planned hotels, will be liable for tax. This legislation will inevitably increase hotel tariffs which in turn must have adverse consequences for the future development of Norfolk Island’s tourist industry. If the proposed legislation is applied in an uncompromising manner, business concerns, which are to become liable for Australian taxation, may withdraw from the island’s economy. This could result in the development of Norfolk Island being restricted to projects for which local finance, local skills, local management and local direction can be arranged.
The former Treasurer foreshadowed provisions to deal with these contingencies when he stated:
The Government has a responsibility to act to prevent inequity arising. . . .
He said also:
It is proposed to replace existing provisions with measures which operate as if the island were part of Australia but to confer exemptions from Australian tax where appropriate.
We recognise that the Government is aware of the implications of this legislation for the island. The Minister for the Capital Territory (Mr Bryant) recently stated:
It is a very delicately balanced economy as I see it and it will not take much to unbalance it.
He emphasised that it was his- interest to see that the Norfolk Island people are not disadvantaged as a result of any steps we take.
Although the Opposition accepts the Minister’s statement as one of broad policy, we nevertheless believe that the Government should outline the measures it proposes to take to protect the island’s economy from any adverse effects arising from the application of this legislation. The former Government raised the grant for Norfolk Island from $66,000 to $120,000 in 1972-73 in the expectation that this tax legislation would be passed. That assistance has clearly been of benefit. In addition, the marginal increase in the funds allocated for restoration and maintenance of historical structures to $66,700 in the 1973-74 Budget will benefit the island tourist industry. Australian-owned companies in business on the island clearly receive a quid pro quo for the tax payable on income from their island operations. However, I reiterate that it is vital for the island to be assured of the Government’s intention to prevent inequity in the case of individual companies and, particularly, to prevent any adverse effects on the island’s economy.
The Opposition supports this legislation before the House. I trust that the Treasurer (Mr Crean) will be prepared to provide the assurances sought by the Opposition in respect of the Norfolk Island residents before closing this debate. I see that the Treasurer, who is sitting on the front bench of the Government side, is nodding his head, so I take it that that assurance is so given.
– The Deputy Leader of the Opposition (Mr Lynch) spoke of the deleterious effects which could flow from the stringent application of the provisions of the amending legislation in regard to Australian-owned companies trading on Norfolk Island. I think I know the companies to which he referred. For my part - I do not speak on behalf of the Treasurer (Mr Crean) on this - I have no geat sympathy for those Australian companies to which I think the honourable gentleman was referring. I instance the fact that those self-same companies have already set themselves up in a tax haven in the New Hebrides in an endeavour to protect themselves, and while they adopt those attitudes I feel they can expect to receive very little sympathetic treatment from the Government. As was stated by the Treasurer in his second reading speech on 30 August 1973, when he introduced the Income Tax Assessment Bill (No. 4) of 1973:
The Bill has a simple purpose. It is designed to put an end to the use of Norfolk Island and, to a more limited extent, of Papua New Guinea for tax haven purposes.
The Treasurer, in his speech, gave a definition of that he considered to be a tax haven, and Norfolk Island certainly comes within that definition. The original intention of the legislature to grant tax-free status to residents of Norfolk Island was not in itself a bad thing.
But as with all good things there are always people who will prostitute the good things in life for their own personal gain. This happened in regard to the tax free status of Norfolk Island. If my memory serves me correctly, it was in about 1966 that a shrewd Sydney solicitor conceived the idea of ultilising Norfolk Island as a tax haven. He even went there to set up the tax free companies. Of course this tax avoidance scheme did not benefit the ordinary wage plug. He had no chance of avoiding his tax liability. Tax was taken out of his wages before he got his hands on them. The tax avoidance was being done for the benefit of that section of the community which could afford to pay its correct tax - the wealthy taxpayer and the medium and large companies. There is only one word to describe that section of the community which practises these tax dodges - unscrupulous. The same word applies to their advisers, both solictors and accountants.
It is interesting to note that in the courses of study and in examinations set for both solicitors and accountants is a subject called ethics’. How can any self-respecting solicitor or accountant reconcile his conscience with the unethical practice of encouraging clients to rob the government? I once heard it said by a member of the clergy that in Ireland it is not a sin to rob the government. That may have been so in Ireland when that country was under the control of a foreign invader. But I suggest this is not the position in Australia. It is the obligation of every decent Australian to contribute equitably towards the cost of running the country in accordance with his capacity to pay. Those who do not are a barnacle on the ship of state. Those who used Norfolk Island as a tax haven were barnacles. I could use a stronger word but it would be classified as unparliamentary.
This legislation removes the barnacles which were hanging on the ship of state. My only regret is the lateness of the introduction of the legislation which will have effect in relation to income derived after 19 July 1972. When I was elected to this Parliament in 1969 after 34 years service in the Taxation Office I commenced to hammer the then Liberal-Country Party Government on its lack of legislative action to prevent taxation avoidance schemes. The Norfolk Island tax haven was part of those schemes. A succession of LiberalCountry Party Treasurers had this matter brought to their attention. The right honourable member for Lowe (Mr McMahon) in my view was evasive. The attitude of the honourable member for Wentworth (Mr Bury) when Treasurer was almost an encouragement to these tax evaders. On 8 March 1970 I addressed a question to the then LiberalCountry Party Treasurer, the honourable member for Wentworth, as follows:
My question is addressed to the Treasurer. Is it a fact that many income tax avoidance schemes are being carried out particularly by large and wealthy companies and their shareholders? Is it a fact also that I drew the attention of the Treasurer to some of these income tax avoidance schemes in a speech in this House on 18 March 1970? Will the Treasurer take urgent action to bring down amending legislation to prevent this legalised tax avoidance and share the tax burden in a more equitable manner than is the case now?
In reply the then Treasurer said, in part:
It is open under the law for any citizen to operate the laws as he can best to his advantage.
What was that if not encouragement to tax evaders to go ahead with these nefarious schemes? The honourable member for Wentworth did not last long as Treasurer and was succeeded by the present Leader of the Opposition, the right honourable B. M. Snedden. The pressure continued by myself and other honourable members of this Parliament - notably the honourable member for Chifley (Mr Armitage) - for some form of taxation justice and for a crackdown on tax evaders. On 19 July 1972 the then Treasurer - now Leader of the Opposition - finally surrendered. He announced to this House that Parliament would be asked to approve legislation designed to put a stop to Norfolk Island and other Territories being used as tax havens for the avoidance of income tax. But the then Liberal-Country Party Government would not introduce the necessary legislation. It was necessary for a change of government to occur before the legislation was finally introduced into this Parliament - and not before time.
I congratulate the Treasurer for introducing this legislation. But one point concerns me. What is to be done about those companies which derived income in Norfolk Island prior to .19 July 1(972, which is the operative date for this legislation? Are they to escape? My suggestion to the Treasurer is that he should initiate action within the Taxation Office to see that investigatory action is taken against all those tax avoiding companies which were set up on Norfolk Island. I suggest that this is capable of being done and that millions of dollars of avoided tax could be collected and used for the benefit of all Australians. There is an old saying that as soon as one plugs one leak another one starts. This is probably true. Tax avoidance has been likened to a game of cards - you win some, you lose some. But it is a game in which the Commissioner of Taxation holds all the aces. He is entrusted with very wide powers and this Government has shown by its actions that it is quite prepared to strengthen the hand of the Commissioner of Taxation where there is any legal doubt.
I commend the action of the Treasurer in his attitude towards other tax havens, notably the New Hebrides. In a statement on 25 October 1973 he said in part that one of the steps being taken to combat tax havens was the screening by the Taxation Office of exchange control applications for transactions between Australia and the New Hebrides. He said that the establishment of tax havens in close proximity to Australia, such as the New Hebrides, was a potentially dangerous development which posed a serious threat to Australian taxation revenues. He mentioned that legislation had recently been introduced to put an end to the use of Norfolk Island as a tax haven. He said that tax havens outside Australia’s territorial jurisdiction, however, presented greater problems which, overseas experience suggested, called for measures to supplement income tax legislation. He also said that in the absence of action to prevent the successful use of tax havens by Australian taxpayers, the activities of such people, and those who advised them, resulted in a heavier tax burden on their fellow citizens.
He continued that whatever steps were necessary - whether by amendment of the taxation law or otherwise - would be taken to protect the interests of the general body of Australian citizens, to whom the use of these devices was abhorrent. He also said that in doing so every endeavour would be made to match the skill and ingenuity of those who were trying to evade or avoid the payment of tax, or those who were assisting them. He also said:
In particular, Australia views the emergence of the Kew Hebrides as a tax haven with extreme concern and will take all necessary measures to prevent resort by Australian taxpayers to the facilities offered by the Condominium for evasion or avoidance of taxation; In the light of recent experience, one measure now being taken is to ensure that exchange control approval is not given to transactions between companies and persons in Australia and the New Hebrides unless the Reserve Bank sights evidence that the Commissioner of Taxation does not object to the proposed transaction. Before the Commissioner gives such a declaration the applicant will have to satisfy him that the transactions will not in any way involve or assist or be associated with avoidance or evasion of Australian tax, whether by the applicant or anybody else.
I commend the action of the Treasurer and his attitude towards these other tax havens, notably the New Hebrides. This action, I might add, is in marked contrast to the attitude of the previous Liberal-Country Party Government and shows that the ‘hands off’ attitude towards tax evaders is at an end. If the wealthy section of the community paid its correct tax this could lead to a lowering of taxation for that section of the community which can ill afford its present heavy tax liability. This tax measure has my full support and I am certain that the whole community, other than those who are caught by it.
– I should like to thank the 2 honourable members who have contributed to this debate for their remarks. I shall take note of the points that have been made. I think it has to be observed that here is an example of what was a blatant attempt to evade proper tax responsibility. Hopefully, we have hopefully closed that door. In the process it may be that somebody who was innocent may be penalised. If that is the case, I have indicated that we are prepared to examine the position. I must say that up to date nothing has been demonstrated to show that this has happened or will happen. But the door is still open for representations to be made. The difficulty is in framing legislation to cover particular cases rather than general cases. As far as other tax havens are concerned, at least Norfolk Island is a territory of Australia and we have the ability to pass laws affecting it. We do not have that ability with respect to those parts that are not our territories. We have indicated that if income that is properly generated in Australia is sought, by various devices, to be transferred outside it we will take all the steps we can to see that the revenue of Australia is protected, lt is true enough that any individual is entitled to organise his own affairs to pay the minimum that he has to, but when certain devices are resorted to the ultimate effect is that revenue that should have been collected is lost and genuine taxpayers have to pay more to make up that loss. This Government will show no mercy whatever to the unscrupulous, no matter how skilfully they may think they sail within the letter of the law.
Question resolved in the affirmative.
Bill read a second time.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Crean) read a third time.
Debate resumed from 25 October (vide pane 2707), on motion by Mr Crean:
That the Bill be now read a second time.
– Before the honourable gentlemen commence perhaps I might ask the indulgence of the House to raise a point of procedure on this legislation. Before the debate is resumed on this Bill I should like to suggest that it may suit the convenience of the House to have a general debate covering this Bill, the Income Tax Bill 1973 and the Income Tax (NonResident Dividends and Interest) Bill 1973, as they are associated measures. Of course separate questions may be put on each of the Bills at the conclusion of the debate. I suggest therefore, Mr Deputy Speaker, that you permit the subject matter of the 3 Bills to be discussed in this debate.
Mr DEPUTY SPEAKER (Mr Berinson)Is it the wish of the House to have such a general debate? There being no objection, I shall allow that course to be followed.
– I seek leave of the House to move a motion to enable the Deputy Leader of the Opposition to speak without limitation of time.
-Is leave granted? There being no objection, leave is granted.
Suspension of Standing Orders
Motion (by Mr Crean) agreed to:
That so much of the Standing Orders be suspended as would prevent the Deputy Leader of the Opposition speaking without limitation of time.
– The Bills before the House seek formal Parliamentary approval for the revenue measures announced by the Treasurer (Mr Crean) in his Budget speech. Together the Bills provide the Government with a 26.4 per cent increase in personal taxation revenue and additional revenue from the elimination of taxation concessions and increases in particular forms of taxation. The Opposition strongly condemns the Government for the irresponsible manner in which the Budget was framed. All Australians are now paying the price of that Budget in the form of increasing inflation. This is a Government unprepared to take account of economic advice. Its desire to implement its programs, regardless of the cost, has no better illustration than the proposals designed to exact additional revenue from new taxation measures in spite of a record 26.4 per cent increase in personal taxation receipts.
The public should recall the previous statements by the Prime Minister (Mr Whitlam) on the effects of the differential tax scale when he said:
Don’t be fooled by the Liberal boast that tax rates have not been increased . . . the taxes have been raised by the simple, silent expedient of leaving the tax schedules unchanged and letting inflation and wage increases do the rest.
This is exactly what is proposed under the Income Tax Bills now before the House. It is, in fact, misleading to assert that there has been no rise in personal income tax rates. Only when the ratio of income tax receipts to personal disposable income does not rise should one consider that income tax rates are unchanged. Under this Government Australians will pay higher taxes than ever before. This massive increase in the effective rates of taxation is likely to cause a decline in the community’s propensity to save and incentive to produce. This can have no other effect than a slow-down in the real growth rate of the economy. It should not go unnoticed by the public that, before the Bill to set personal income tax rates for the current financial year is passed through the Parliament, senior members of the Australian Labor Party are publicly advocating further increases in income tax. The Opposition believes that the Australian public should be under no misapprehension. This is a Government which is prepared to exact the highest possible price to finance its spending programs.
The Bills before the House seek formal approval to finance a Budget which expands public exenditure by $1,93 8m - an expansionary effect equal to 4.2 per cent of non-farm national product. When the Budget was announced the Opposition warned that its impact would push the rate of inflation to record levels. That warning is now seen to have been both accurate and responsible.
In spite of the Government’s monetary policies, the increase in the volume of money for the year ending September 1973 was recorded at 26 per cent. Since the balance of payments had a negative effect on the money supply during the September quarter - and during the whole period that this Government has been in office - the reason for the increase in the money supply can be ascribed to the greatly increased domestic deficit of the Commonwealth Government, and the reluctance of the banking system in particular to increase its holdings of government bonds. The Opposition has repeatedly called for corrective fiscal action. But the Government has attempted not to decrease its own deficit, but to force the private sector to finance its deficit spending through greatly increased subscriptions to Commonwealth bonds. The inevitable result of this unbalanced approach has been a massive rise in interest rates. The present circumstances were accurately predicted by the Opposition at the time that the Budget was brought down. The Leader of the Opposition, in his reply to the Budget on 28 August said:
The fiscal irresponsibility of the Budget puts an unreasonable pressure on monetary policy. It is unreal to depend on monetary policy alone to maintain proper overall economic conditions.
The continuing high rate of inflation vindicates the comments made by the Opposition at that time and, more particularly, simply highlights the ineffectual nature of this Government’s economic policies.
There are many important provisions in the legislation. One of the most iniquitous is that proposed by clause 6 of the Income Tax Bill. Under this provision approximately 20 per cent of pensioners will become liable for tax or to lodge a taxation return. The combined means test and tax measures will be at a marginal rate equivalent to that paid by those with taxable incomes of $12,000 per annum where the marginal rate rises from 48.2c to 54.6c in the dollar. These proposals disadvantage those single aged persons under 75, whether pensioners or not, whose taxable incomes - including pension income if any - are between $1,921 and $2,500 and similarly affects many married aged persons under 75 whether they are pensioners or not. The Government’s proposals impose a marginal rate of tax of 49.4c to 51.6c in the dollar on all aged persons with taxable incomes between $3,224 and $3,847. Finally, some pensioners will now be comparatively disadvantaged when they attain pensionable age. Such pensioners would include a Service pensioner on attaining 65, a wife of an invalid pensioner on attaining 65, and a widow on attaining 65.
The Opposition believes that the Government stands condemned for its treatment of pensioners in this Budget. The proposals which impose taxes on aged persons in the Australian community are, we believe, entirely unwarranted, especially in this period of greatly accelerating inflation. It is the pensioners within our community who are suffering the most severe effects of the Government’s mismanagement of the economy. We place on record that we believe the provisions of clause 6 to be iniquitous and entirely inconsistent with the principles of social justice which this Government claims to hold. I quote the views of the Australian Commonwealth Pensioners Federation which referred to the Government’s position in the last Budget in these terms:
We are bitterly disappointed that the Government has not seen fit to make provision for greater pension increases for those whose only means of subsistence is the pension itself. It would appear that this section of the community, most defenceless nothing to sell, unable to strike, are to bear the brunt of today’s inflationary conditions. It is our view that inflation should be approached with a firm resolve to ensure that the poor do not become poorer and the rich richer. We view the future with no small degree of apprehension.
One of the most regrettable features of the legislation is the discouragement of incentive and effort through the wide-ranging series of measures which are directed against the Australian business community. The Government has chosen to terminate the investment allowance, to increase the rates of tax payable by private companies, to collect company tax by instalments and to reduce the taxation concessions provided for life insurance companies. This combination of anti-business measures is being taken at a time when there is intense pressure on domestic resources and an expansion of business activity, particularly of investment, needs to be encouraged. Quite apart from the economic implications of these proposals it should be made clear that they do not represent the implementation of election policies.
Clauses 14 and 15 of the Income Tax Assessment Bill propose to abolish the present investment allowance which permits a deduction from assessable income of 20 per cent of capital expenditure on specified new plant. One of the weakest areas in the Australian economy in recent years has been the private investment in such capital assets as machinery, equipment and industrial plant. Net investment - that is, gross investment in plant and equipment less the depreciation of old capital stock - has stagnated in recent years. Current investment has not managed to keep up with the replacement of worked out or obsolete stock. In these circumstances, the abolition of the investment allowance in manufacturing and primary industry is very disturbing. A strong recovery in investment in plant and equipment will be required if we are to maintain satisfactory rate of growth productivity.
The marginal increase in estimated investment during the September quarter should not be over-stated. In the first 9 months of 1973, expenditure on new capital equipment, other than new buildings and structures calculated in seasonally adjusted terms, was 7.4 per cent lower than in the same period of 1972. The removal of the investment allowance will prevent any significant recovery in net investment in plant and equipment in 1973- 74. The Prime Minister’s task force, when evaluating the impact of the investment allowance, failed to take account of the effects of all the possible causes of investment fluctuations and also the long time lags between the initiation of investment projects and their completion.
Although demand restraint is required, it should be aimed at current expenditure, not at investment in equipment, which in the long run will have a major influence on our capacity to meet demand. The removal of the deduction could easily increase costs because, by not changing over to new plant, the goods produced on the old plant must be priced to reflect the continually less efficient plant on which they are made. And without the allowance, once the equipment is purchased, the manufacturing costs will reflect not only the increased basic price of the equipment but also the additional finance required.
Clause 34 of the Income Tax Assessment Bill proposes that the Commissioner of Taxation be authorised to collect an instalment of tax payable by a company in respect of a year of income ahead of the time that the tax would ordinarily fall due for payment. In the current financial year the instalments will be payable not earlier than 31 December 1973. This proposal is the first step in a series intended to collect company income tax by four quarterly payments in the financial year following the year in which the income is derived.
Although the Government made a promise that company tax rates would not rise, quarterly collection of company tax would In effect amount to a further substantial increase in company tax because companies are deprived of the use of the operating funds. This will have serious implications for small companies and for companies which are starting up or planning to expand. As a result, any slow-down in the expansion of private sector capacity will be exacerbated. In addition, such a system has practical difficulties since the quarterly payments will be based on previous payments of tax or on estimated tax payable. Either way, there has to be built into the system the provision for credits if too much tax is paid, or penalties if too little tax is paid. Quite apart from the detrimental effect it could have on a company that inadvertently paid too much tax, the Government must now make provision for a further extension of the Public Service to administer its complicated methods of company tax collection.
Clause 9 of the Income Tax Bill seeks to eliminate the concessional rate of tax on the first $10,000 of taxable income of private companies and to increase private company tax to public rates. This is a further instance of the Government’s anti-business posture and reflects the inadequate level of research into the effects of its legislative proposals. Instead of penalising the larger private companies, which are indistinguishable from public companies - but have in the past benefited from a lower rate of tax - the main thrust of this proposal is directed against the least profitable and smallest of private companies. This is particularly true in the case of family companies many of which have taxable incomes of less than $10,000. These companies will be faced with a massive increase of 27 per cent in tax, and at the same time will receive no benefit from the proposed relaxation of the retention allowance. This proposal would allow private companies to retain a flat 50 per cent of net profit after tax before becoming liable to pay a tax on retained profits of 50 per cent. It differs from the present system under which companies can retain only 50 per cent of the first $10,000, 45 per cent of the next $10,000 and 40 per cent of the remainder before becoming liable for retained profit tax.
The Treasurer, in his Budget Speech, justified the abolition of the concessional rate of tax as a means of discouraging tax avoidance through company splitting. However, the Treasurer should certainly appreciate that under the Income Tax Assessment Act a taxpayer may utilise certain tax planning devices to minimise tax, and where this advantage is taken in relation to incorporation the Commissioner cannot charge him with tax avoidance. It should also be noted that legal fees today render profits from company splitting virtually non-existent.
It may be possible to support the case for increasing tax for private companies which are indistinguishable from public companies as these companies which have taxable incomes of something over $100,000 will actually be better off as a result of the relaxation of the retention allowance. However, in that case it is hard to justify the application of the retention allowance at all. If it is accepted that the distinction between private and public companies is no longer justified for income tax purposes, the Government cannot justify the retained profits tax on private companies since many public companies pay out significantly less than 50 per cent of after-tax profits, which is the rate of payout required of private companies not wishing to pay retained profits tax.
The increase in private company tax rates combined with an effective increase in personal taxation plus the enforced distribution of a significant part of trading profits, particularly for family companies, places strains on liquidity and inhibits the growth of this type of company. It becomes patently obvious that this discouragement of small private companies will have adverse economic effects. Almost 70 per cent of all private companies have taxable incomes on profits of less than $10,000. The attraction of the limited liability company is an important means of encouraging the small entrepreneur. By forcing individuals with enterprise and management skills to take the risk inherent in a partnership or to divest themselves of a large part of the potential profit by floating a company, the Government is, in effect, depriving the economy of new entrepreneurial skills.
Clause 25 of the Income Tax Assessment Bill proposes that the special deduction allowable to life assurance companies under section 115 of the principal Act is to be reduced to 2 per cent of calculated liabilities. Clauses 10 and 26 propose that the amount of dividends in respect of which a life assurance company is allowed a rebate of tax, under section 46 of the principal Act, is to be reduced by an appropriate part of the deductions allowable for the general management in relation to calculated liabilities. These provisions must be considered in conjunction with the proposed increase in the taxation rate for life offices from 42.5 per cent to 47.5 per cent.
Most _ of the large life offices are purely mutual. Those offices which are not, allocate - in the aggregate - a high proportion, namely 97 per cent, of their surplus for the benefit of policy holders. In total, 99 per cent of the surplus allocated by life offices goes directly to provide bonuses for policy holders. The role of the life office is, in effect, that of trustee of the funds of its policy holders. The combined effects of the provisions of this legislation will result in the income tax payable by life offices being increased to approximately two and one half times the previous level. The additional tax burden will have to be borne almost entirely by the policy holders. The industry has indicated that the result will be a very substantial reduction - probably about 20 per cent - in future bonuses to policy holders. This reduction in bonuses will have an impact right across the community as it will affect the owners of some 7.5 million policies - whether the policies be large or small, ordinary or industrial.
The Life Offices Association, in its submission to the Asprey Committee of Inquiry in May 1973, argued for the continuation of the existing Australian method of imposing income tax on life offices in this country in the following terms:
It must be emphasised that life assurance is a long-term business and that taxation is one of the important factors taken into account in fixing the terms of life assurance contracts, which terms, including the premiums charged, cannot be changed during the currency of the contracts, whatever variations may subsequently be made in the incidence of taxation.
If a contract of life assurance has superimposed upon its terms a set of tax rules entirely different from those existing when the contract was made, those most seriously affected would be the parties to or the beneficiaries under a contract providing for the payment of a sum of money upon a life assured attaining a certain age or upon prior death, i.e., upon those who have made provision for their own personal security or that of their family.
Other countries apply differing bases of taxation to Life Offices and it is noteworthy that it is the possibility of a significant change in the existing tax basis in a particular country which deeply concerns the Life Offices in that country. This was the case in the 1965 inquiry into the Assessment of Life Assurance Companies in New Zealand and also the case before the Royal Commission on Taxation in Canada.
The basis of taxation in New Zealand differed from that in Canada, but in both countries the Life Offices argued against any change because of the long-term nature of their business. Their principal concern was for continuity and certainty in the existing basis of Income Tax.
What has to be made clear is that the Government’s proposals will disadvantage millions of Australians who have vested their future security in schemes of life assurance.
The Opposition is particularly concerned by the proposals in the legislation to eliminate the’ productivity incentives for primary industry. Clauses 17, 18 and 19 of the Income Tax
Assessment Bill seek to abolish the present deductions for the cost of certain capital expenditure on land used for primary production. The deductions now cover vital expenditures such as clearing and preparing land; internal fencing; the provision of water and the storage of fodder. We would agree with the observations of the Coombs Committee that such concessions can be abused by other than genuine farmers and that in some instances they enforce the process of destruction of native flora and fauna. However, the removal of these concessions from bona fide primary producers is, we believe, entirely unwarranted. This action will hold back the required expansion in some areas of rural production which is required to increase the supply of important primary produce. The Opposition holds similar views in respect of clauses 12 and 13 which seek to terminate the accelerated income tax rate of depreciation of primary production plant and structural improvements. Clause 8 of the Income Tax Assessment Bill seeks to change the basis of end-of-year valuation of trading stock manufactured from grapes for tax purposes. The present basis is optional valuation above certain minimum values. The proposed basis, which represents a choice for valuation purposes between cost, market or replacement value, will substantially increase tax liabilities.
This Bill will mean severe financial stringency for the Australian wine and brandy industry. It will impose an intolerable financial burden on producers. The legislation allows an inadequate period of adjustment of only 5 years. To the smaller producer, the resultant drain on liquidity caused by the higher tax could mean a loss of economic viability with consequent liquidation. For the larger company, the impact will be equally serious and will result in substantial structural alteration to Australia’s wine and brandy markets in favour of internationally-owned operations. In other words, the Government is forcing Australian producers out of the business. These industries have been encouraged to pursue expansion in grape purchases and production facilities, confident that the concession was not an unjustifiable tax advantage. The concession has served not only the industry but the country at large by enabling a longer maturation period, hence a better product and a better international reputation; and it has been assisted in developing the home market. However, these benefits will be reversed and the industry’s growth retarded as a consequence of this Government’s measure. The loss of the concession will deprive the industry of substantial financial resources. Because the industry does not yield comparatively attractive returns on investment to attract local investors, it will be required to resort to foreign resources. This move is a further illustration of this Government’s anti-rural bias. The complicated system of valuation proposed under this legislation not only replaced a very simple and convenient method, but will also require accounting finesse, time and additional cost to the taxpayer.
The Income Tax Assessment Bill seeks to abolish the present provisions giving tax exemption for profits from mining gold or of income derived from the sale, transfer or assignment of rights to mine a particular area for gold. It also seeks to remove the exemption of one-fifth of the profits earned from mining prescribed metals or minerals. Clauses 9 and 21 seek to discontinue the provisions that exempt from income tax dividends paid out of exempt profits from gold mining, the mining of prescribed minerals and the sales of domestic petroleum. In response to strong public criticisms by the Opposition parties, on behalf of the mining industry in general and vitally affected communities such as Kalgoorlie in particular, the Treasurer has foreshadowed certain amendments. In a public statement on 15 November, the Treasurer stated:
It has been decided to defer until after the end of 1973-74 any action to withdraw the complete tax exemption for gold-mining profits and the partial (20 per cent) exemption for certain other mining profits. This decision does not change the Government’s proposal, now embodied in legislation before the Parliament, that dividends declared out of such profits after Budget day will not be exempt from tax.
Although the Opposition parties welcome this change we are concerned that it merely defers the implementation of one proposal and makes no adjustments to the question of dividends. The Opposition parties do not agree with the withdrawal of the dividend exemption. In particular, we believe that this proposal should not operate with respect to existing exempt income standing in the accounts of mining companies. Equally, where an interposed company has received exempt dividends, under the existing Act, it should be permitted to pass them on to shareholders without losing the benefit of the exemption. We believe that it is entirely wrong to implement these changes except in relation to future investment. As the proposal now stands, it constitutes a form of retrospective taxation. The Opposition cannot agree that there should be no provisions of a transitional nature as is the accepted convention in such amendments to taxation legislation.
The Opposition believes that the income tax provisions have played a major role in facilitating the development of the industry and that the net cost of the provisions is low compared with the substantial benefits to the economy to which they have contributed. The removal of the concessions in respect of dividends will make the raising of local finance more difficult. This is, of course, a strange contradiction to this Government’s stated policy objectives of raising the degree of domestic financial participation in our minerals industry. It is a further instance of the double standards which are practised by honourable gentlemen on the Government benches of this Parliament.
Australia’s natural resource industries have suffered a series of severe shocks at the hands of the Minister for Minerals and Energy (Mr Connor). His failure to articulate detailed policies and his ideological commitment to the principle of government exploration, production and ownership of the Australian oil and minerals industry have caused a massive loss of confidence. Export contracts and exploration mining leases have been subject to the capricious veto of the Minister causing the forward investment plans of many companies to be substantially curtailed or shelved. The great irony of this Minister’s frenetic activity and personally hostile -attitude to this country has been the severe damage and losses caused to Australian owned companies and their Australian shareholders. The Government’s taxation proposals can only further exacerbate this most regrettable and serious situation.
The limited nature of this debate does not permit detailed comments on each of the 3 Bills before the House. However, I believe that clauses 3 and 7 of the Income Tax Assessment Bill will cause particular problems because they provide insufficient flexibility. The legislation provides that profits from the sale of property sold within 12 months of acquisition are to be treated as assessable income. The only exception is made in respect of the sale of a taxpayer’s sole or principal residence as a consequence of a change in his place of employment. In his second reading speech the Treasurer stated that ‘these short-term profits are essentially in the nature of income and ought to be subject to tax as such’. We cannot agree with this concept. There are many instances where property is disposed of within 12 months of purchase, other than the one circumstance - the only one - selected by the Treasurer, for reasons unconnected with profit motives. These reasons could include the resale of a residential property to acquire another property with different accommodation for reasons of personal illness, additional unexpected family responsibilities such as aged parents, multiple births and so on. I can recall case after case in my electorate of Flinders - a great electorate in this country - particularly with respect to the Mornington Peninsula area, of persons who have been required for reasons of personal illness to relocate from the Mornington Peninsula to the Gold Coast. Under this provision, those people will be disadvantaged directly for reasons which I cannot comprehend.
– What? All in one year?
– I seek the compassion of the Treasurer. I ask him to look further at this provision because, in cases of this type, the proceeds from the sale of the family home are completely reinvested in a replacement property. It is anomalous that in these circumstances any profit, which, in the current climate of rising real estate values is almost inevitable, will be liable to tax whereas, in the one instance selected for direct exemption, the profit will not be so liable, even though the proceeds need not be reinvested in a replacement residence. The exemption should, at least, be extended to the sale of any residence where the proceeds of sale are utilised in the replacement of such a residence and where the sale is not made for a profit motive.
Clause 16 of the Income Tax Assessment Bill provides that commencing with the 1973-74 income year, the deduction in respect of private rates is to be available only for rates paid on principal residence and will be subject to a limit of $300 in any year. Private rates paid in respect of holiday homes and vacant residential land are no longer to be deductible. The Opposition disagrees with the Treasurer’s concept, based on the Coombs Report, that the present deduction for rates and land tax is a disguised expenditure and is in the form of a concession. Our view is that the origin of the deduction was the recognition that such expenditure is primarily a form of taxation and that income tax should not be levied on that part of a taxpayer’s income which is used to pay taxes. The bulk of payments to local government, semi-government authorities and State governments in the form of rates and land tax, represents levies on the owners of land for expenditure on community projects. Although there is in these rates an element of payment for services rendered to the taxpayer, this element is difficult to segregate and to identify as being solely for the benefit, of the taxpayer. For this reason we fundamentally disagree with the concept of limiting the deduction, as foreshadowed by the Treasurer.
I have outlined the Opposition’s attitude to this legislation, as to its overall economic consequences and its effects on particular sections of the Australian community. There is, of course, great justification for the rejection of the provisions of this legislation, many of which will substantially disadvantage community groups such as pensioners. But to contemplate such action would be to require the development of priorities of adversity. The Bills have such adverse effects on so many groups that the concept of rejecting certain provisions is not practicable at this stage, we believe, without a rejection of the major part of the legislation. As a matter of political responsibility, we do not propose to do that. Accordingly the Opposition Parties will not prevent the passage of these revenue measures. Notwithstanding this fact, I would seriously urge the Treasurer to consider making a number of adjustments during the Committee stages. I formally move:
That all words after ‘That’ be omitted with a view to inserting the following words in place thereof: whilst not declining to give the Bill a second reading, the House is of the opinion that the provisions of the Bill are a contravention of the Government’s electoral undertakings not to increase taxes and that the Bill specifically:
imposes unwarranted taxes on pensioners;
eliminates incentives for manufacturing industry inconsistent with the economic requirement to increase productivity and ease the pressure on domestic resources;
removes or drastically reduces important rural productivity incentives;
jeopardises the savings and future security or Australians holding life assurance policies;
places inflexible rules on the sale of property which take no account nf reasons unconnected with profit motives such as illness and additional family responsibilities; ff) impedes the development of small businesses by increasing the rates of private company tax, and
places added cost burdens on Australia’s wine and brandy producers especially the smaller producers of wine grapes’.
I commend that amendment to the House.
– Is the amendment seconded?
– I second the amendment. The Deputy Leader of the Opposition (Mr Lynch) has covered the general field very adequately, and I find myself in powerful agreement with him. It is not necessary to repeat what he has said, and I have no intention of doing so. I shall content myself, in the short time that is available to me, in referring to one matter only in connection with this taxation measure. I refer to the situation of people on low and modest incomes. I believe that inequities arise from the abolition of the age allowance for income tax purposes and the substitution of a $156 rebate, reducing as income increases. I will not vouch for the precise accuracy of my figures, but the effect so far as I can ascertain it is that single persons with a taxable income over about $2,000 will be worse off under the present rebate system than they would have been under the age allowance system that has been abolished. Again, all married persons with taxable incomes up to about $3,800 will be worse off. I may be wrong in detail, but broadly I think I am correct. The abolition of the means test on incomes of persons over 75 years of age will not at any time in the future, if the Labor Government remains in office, be applied to women aged between 60 and 64 years. This will affect many widows, who will in fact be worse off than at present if their incomes exceed $2,000, as I have already said.
I want to speak also about inequities m respect of the fringe benefits available to pensioners. These are numerous and valuable. I have before me the leaflet of these benefits issued by the Department of Social Security. I will not go into detail as to what these fringe benefits are, but I will simply mention them. There is the pensioner medical service. It will be said that soon everybody will be entitled to hospital beds in public wards and to a medical service free of charge, but this is not yet. There are other advantages such as transport concessions. It may be said that these are not granted by the Commonwealth or that if they are granted by the Commonwealth they affect mainly people in the States and these are benefits granted by the States. Pensioners enrolled in the pensioner medical service receive a 50 per cent rebate on water rates.
They receive telephone rental concessions. They receive concessions for ambulance services, television licences, dental services, hearing aid services and optometrical services and also funeral benefits - not much use to them in their lifetime, admittedly - and legal assistance. Generally these fringe benefits are numerous and valuable.
Naturally the value of them will vary from person to person. It is not everybody who necessarily has a telephone; it is not everybody who necessarily needs a hearing aid; it is not everybody who may travel to the same extent as others. But the value of the fringe benefits has been reckoned at between $500 and $1,000 a year. So we are not talking about peanuts. Who gets these benefits? Let me quote a piece of limpid prose read by the Minister for Social Security (Mr Hayden) in what we call a speech. It was a speech on the Social Services Bill (No. 4) made on 11 September this year, as reported on page 756 of Hansard. The Minister said that the means test will continue as regards fringe benefits. He said:
The Government has decided that the 1967 means test will continue to apply for ‘fringe’ benefit eligibility but that the pension increases to be paid in the autumn of 1974 will not extend benefits to people whose means are outside the new limits now proposed. The pension increases provided in this Bill will lift the disqualifying limits of means as assessed for ‘fringe’ benefit eligibility by $1.50 a week to $33 a week for single’ pensioners and $3 a week to $57.50 a week for pensioner couples. What this means is that a married couple may have a combined income of up to $86.50 a week, including pension, and a single person a combined income of up to $49.50 a week, including pension, before eligibility for fringe benefits ceases.
Mr Deputy Speaker, you may have followed every word of that. All I can say is that it is a gem of purest ray serene, so limpid that very few people can understand it. It seems to me at least that a means test dating back to 1967 will continue to be applied to fringe benefits. What it means is that if a person happens to qualify under the test, if one likes to work out what this means, he will receive benefits worth between $500 and $1,000 a year. But if he happens to have $1 beyond what is permitted to qualify under this test, he receives none of that at all. There is no tapered test whatsoever. This is a most extraordinary situation - or perhaps it is not, inasmuch as social services are a jungle through which few people can find their way. But I draw attention to the fact that these inequities exist as between those who are qualified and those who are not qualified, and between those who qualify by $1 and those who miss qualification by $1. It is true, as I said, that under the Government’s health scheme all will soon be eligible for free medical and hospital care, if there are enough doctors and enough hospital beds to accommodate them. The pensioners health card in the past has been a kind of passport to all good things. It is the open sesame to a sort of paradise. Time has come perhaps when we should forget about this as kind of open sesame to everything and apply tests that are fitting in respect of each one of these particular benefits, or possibly they should be abolished or consolidated and a tapered means test substituted - a tapered means test that poses-
– Mr Deputy Speaker, I take a point of order. This is a Bill to amend the Income Tax Assessment Act. With all respect to the honourable member for Bradfield, I think he has the wrong Bill.
– We are dealing with more than one Bill; we are dealing with a number of Bills. One of the Bills does in fact impose income tax on pensions.
– Yes, but the question of the age allowance was raised earlier by the honourable member. Of course that matter is related to one of the Bills before the House. But in the last 5 minutes the honourable member has been talking about fringe benefits and the means test, which are not the substance of any of the Bills before the House.
Sitting suspended from 6.16 to 8 p.m.
– Prior to the suspension of the sitting for dinner I was dealing with the effect of the taxation legislation that is before the House on people on low and modest incomes. I had confined myself to that matter. I had said that, as a result of the Government’s action in changing from the age allowance to the $156 rebate which diminishes according to income, many will suffer a diminution of income, I was pointing out the inequity that applies in relation to fringe benefits that may be worth anything from $500 to $1,000. There are inequities in 2 respects. Firstly, a person who qualifies gets all the fringe benefits to the value I have just mentioned. Secondly, a person who happens to have $1 too much does not qualify for any of them. There is no grading or shading at all. I had suggested 2 possible alternatives. One was the abolition of the health card as the passport - the open sesame - to all good things and the substitution of a test for the various benefits that are provided. I listed them all. I said that the other thing which could be done was the consolidation of the financial value of all these benefits and their tapering off or grading according to income.
I pass on from that to the prospects of the independent aged. I take the term ‘independent aged’ from my old friend Mr O. D. Bissett who, in a most benevolent fashion, has sought to champion the interests of the independent aged. What effect will this legislation have on an independent aged person who seeks to protect himself in his retirement by way of life insurance? Thirty per cent of the investments of life offices must go into government or semigovernment securities. The life offices are, to this extent, captive contributors to government or semi-government securities, which are of course particularly vulnerable to inflation. 1 have no doubt that we shall find the situation arising where an additional 10 per cent or more will go into the Australian Industry Development Corporation. It will be a matter of the savings of the people being conscripted through insurance companies. Not only has that happened, but also the tax on life offices has been increased in this legislation. In the case of one large life office, for example, it will involve an increase of 2i times the former tax. In that case it will mean an increase of $ 13m per annum in taxation. That will reduce the value of bonuses by 15 per cent to 25 per cent. The independent aged person who seeks to protect himself through life assurance will find that the life office is going to be taxed and penalised to this extent, making the protection less valuable than it would have been.
An independent aged person who decides that he will try to save enough to invest in securities in order to look after himself in his old age will be faced with swingeing taxation which takes about 50 per cent from the companies from which his dividends are derived and a further tax upon the dividend, which at the moment amounts to three-quarters of the dividend that he might receive and which, of course, diminishes downwards. One of the companies in which such a person might invest for, as he might have thought, his security is the Broken Hill Pty Co. Ltd, whose shareholders are not wealthy people who smoke cigars and drive around in Mercedes motor cars. A tremendous number of the people about which I am speaking invest in companies of that kind. What did the Treasurer (Mr Crean) say in this respect in his Budget Speech? He said:
It is also proposed to bring to an end the exemption of dividends paid out of profits from sales of locally produced petroleum or products of petroleum.
That means that a person who has been investing in companies in order to look after himself in his old age and who has been foolish enough to invest in shares in the Broken Hill Pty Co. Ltd will be hit once again.
It has been said that the Australian Labor Party is a low interest Party. That is splendid. Building societies will give an investor7½ per cent interest on his investment. Inflation - taking the rate as between September of last year and September of this year - is running at the rate of10½ per cent. So such a person would receive a return of minus -I emphasise the word ‘minus’ - 3 per cent if he puts his money into a building society. I donot know whether minus 3 per cent is a very attractive proposition today, but it is very difficult for the independent aged person who is trying to provide for himself to decide whether he should put his money into life assurance, whether he should put it into companies such as BHP, or whether he should put it into fixed interest bearing securities such as a building society. He will lose no matter what he does. I have mentioned that the Australian Labor Party claims it is a low interest Party. It is also a high inflation Party. When inflation is running at 10½ per cent it is absolutely impossible for an individual to look after himself in his old age.
The fortunate ones in our society at present from that point of view are the slick and the smart - the people who can buy and sellland, pictures or, as I think a cleric has suggested, wines. The fortunate ones are the ones who can buy and sell and who can manipulate companies by takeovers and other means. The rewards go to the slick and the smart but not to the sort of people who have tried to save in the ordinary way. Of course, superannuitants are particularly fortunate if they happen to be superannuitants who are providedfor by governments - State or Federal - or by large companies which can, on account oftheir monopoly situation, increase their prices or, because some prices justification tribunal decides the prices they charge, are successful in arguing that they ought to be able at least to earn enough to pay, among other things, the superannuation claims upon them. They also are fortunate people. The fortunate ones are the slick and smart and the people who derivetheir income from superannuation received from large companies or from governments.
In the past economic progress has consisted in the kind of slogan that was used in the United States of America - ‘go west young man’. In our great country, with all its potentialities for expansion and with all its glorious future, the slogan now is ‘Go into the government young man’. I do not know whether there is any future for such a country. I do not know whether, when people play for security in this way, that is the way in which to get economic progress. But perhaps we do not need economic progress any more. Perhaps it is enough to return to office a Labor Government that carves up the cake, such as it may be, and we should not concern ourselves with the size of the cake. We are turning from the old situation of homo sapiens - wise men, far sighted men - to that of homo servilis; that is, we are turning to men who depend upon the State for everything from the cradle to the grave. I do not know what future such a county has. That is for honourable members to decide for themselves.
Perhaps the old Protestant virtue of thrift matters no longer. We live in an age of plenty. Burns, a Scotsman, once wrote:
To catch dame Fortune’s golden smile.
Assiduous wait upon her;
And gather gear by ev’ry wile
That’s justified by honour:
Not for to hide it in a hedge.
Nor for a train attendant;
But for the glorious privilege
Of being independent.
I suggest that we are moving into an age when nobody will be independent but everybody will be dependent upon the Government. A commencement has been made on the abolition of the means test, which is a rough act of justice between the generation which is now suffering from inflation, for all the reasons that I have set out already, and the generation which has only to go on strike to double its pay overnight The abolition of the means test is a rough act of justice between them. But we are doing it so slowly - much more slowly than inflation is creeping upon us - and this is the great injustice.
It is not the responsibility of the Opposition to deal with these matters. The Government must take responsibility for its measures. Let it take responsibility and if there are enough people who still care about independence the Government will suffer at the polls. If these people have been wiped out and matter no longer, if independence matters no longer and if looking after yourself is of no consequence in the future, then of course the present Government will stay in office. I say nothing about the future of this country in such circumstances. But I do not believe that the people will tolerate this kind of slavery or servility for ever. If they do, I shall be deeply disappointed in the calibre of the Australian people.
– The Income Tax Assessment Bill (No. 5) embodies at least 20 and, I suspect, perhaps as many as 30 separate amendments to the Income Tax Assessment Act. Its complexity might be seen in another way if we look at the sheer volume of paper work to which it has given rise. The second reading speech of the Treasurer (Mr Crean) occupied about 5 pages of Hansard, the Bill takes 29 pages of print and the explanatory memorandum takes another 67 pages. In short, the Bill strikes me as being the sort of measure which will be an absolute delight to the accountancy profession and daunting to everyone else - and that certainly includes me. In fact, recognising my own limitations in this field, I intend as did the honourable member for Bradfield (Mr Turner) to restrict myself to dealing with only one and an admittedly minor provision in this Bill. I refer to the proposal to abolish tax deductibility for war memorial donations.
Before I do that, however, I think that I should not be so discourteous to the Deputy Leader of the Opposition (Mr Lynch), who led with unlimited time for the Opposition, as to ignore completely what he said. The Deputy Leader of the Opposition, faced with a Bill which, as I have already said, includes as many as 30 amendments to the Act might have been expected in the time at his disposal to find at least one amendment with which he could agree, at least in a modified or qualified way. But he could not find even one such provision. He faced this enormous new Act with an unqualified, a uniform and quite impartial condemnation. Absolutely everything in it was rotten, including measures per,fectly in line with measures adopted by the previous Liberal Government, or at least analagous to them.
I will give just one or two examples and I do not want to use any more time for this purpose than necessary. Look at the Deputy
Leader of the Opposition’s very first criticism of the Bill. He referred us to clause 6 which will impose taxes on pensions. To use his words, this was perhaps ‘the most iniquitous clause of all* - a terrible provision. It was going to introduce the principle of taxability to the pension system. In order to put it in its worst possible light, the Deputy Leader of the Opposition pointed out that this dreadful measure was going to result in fully 20 per cent of the pensioner population being taxed. I would have thought that if the Deputy Leader of the Opposition was interested in some sort of rational discussion of this question, he might have acknowledged at least this much, that, while it is true that 20 per cent will be taxed, that obviously and conversely means, as the Treasurer has pointed out, that 80 per cent of pensioners will not be taxed. That is, they will not be taxed at all, or even be required to submit a taxation return. Of the remaining 20 per cent, a goodly number will pay no more tax than they already pay and, of the small number still left after that - I am referring to single pensioners - those earning up to $75 a week will pay less than younger members of the community earning a similar amount and those earning over $75 a week will certainly pay no more. I think that the Deputy Leader of the Opposition might have acknowledged at least that much.
I think that he could have acknowledged something else, namely, that whereas antiLabor governments have been talking about the abolition of the means test for over 60 years, it is only the Labor Government which has actually moved to bring the abolition into effect. From the very first day that we undertook the commitment to abolish the means test, we made it perfectly clear that that measure would have to be accompanied, for reasons of both equity and economy, by the introduction of taxation liability on pension payments. As if that were not enough, the truth is that the principle of taxation liability on pensions free of means test is a principle which previously and consistently has been accepted by the Liberal and Country Parties themselves.
– They forget that
– I wish they would remember it. Earlier this year when we were talking about one of the social service Bills and when the discussion of the taxability of pensions was under way in the House, I remember interjecting on the honourable member for Mackellar (Mr Wentworth). I remember the occasion so well, Mr Speaker, because as you know I interject rarely.
– That is right.
– Yes that is true, but I did interject at that point to ask: ‘Is it not a fact that Liberal-Country Party proposals for abolition of the means test are and always have been accompanied by the proposal that those pensions would be taxed?’ The honourable member for Mackellar was honest and direct enough to say: ‘Yes, that is true’. Of course it is true. It would hardly be possible in equity or under any consideration to introduce the abolition of the means test without that provision. Of course, to be fair in return to the honourable member for Mackellar, he did point out that his Party would not be anxious to abolish the age allowance but in this respect the books are balanced, so to speak, by the special taxation allowance of $156 provided in our own Bill. So, I think that before one gets too indignant, as the Opposition parties are obviously intent on doing in relation to this question of taxability of pensions, one had better remember the background to it and the fact that the proposals of honourable members opposite were always linked with the same or at least a analagous proposal.
I wish that honourable members opposite would remember something else at the same time and that is that at least in our case the taxability provisions are linked with an attitude to pensions which is somewhere approaching respectability. At least in our case and unlike that of honourable members opposite, it is accompanied by an advance commitment to ensure that the pension will reach a proportion of average weekly earnings which has never been reached in this country since the last time we had a Labor government, almost a quarter of a century ago. We are committed to bringing the pension within a reasonable period to 25 per cent of average weekly earnings - something to which honourable members opposite have never committed themselves and still today do not commit themselves.
Again on the question of pensions, honourable members opposite might also remember that we have committed ourselves, in order to reach that target, to increases in the pension of stated minimum amounts only, twice a year. That is to be compared, if you will, with the record of the previous Government which no less than 7 times in its period in office allowed 2 years at a time to pass without any alteration or updating of pension payments. So I put to the House that it is not of much use plucking out this one question, limited as it is, related to taxability of pensions and ignoring the whole framework of the pensions system within which it has to be considered.
I make only one other reference to what the Deputy Leader of the Opposition had to say, and that is in relation to his eloquence and indignation on this other question of the taxability of profits arising from the sale of assets within 12 months of their purchase. He was terribly upset about that and I can understand his concern because it was obviously based on the very special, even peculiar one might say, nature of his electorate. It appears that in the electorate of Flinders we have a place which is literally overrun with 2 broad categories of constituents. The first category involves families who, within a few months of buying a home for themselves in that area, experience unexpected multiple births, and so they have to get a larger house, obviously. The other general category of population in Flinders comprises those people who, again within a very few months of purchasing a home there, become so ill that they have to move to the Gold Coast.
Those were precisely the 2 examples given by the Deputy Leader of the Opposition, and in response to them I say only this: If we are to approach these things on anything near to a reasonable and rational basis we have to keep our feet on the ground much better than that. If the provisions of this Bill are in fact too limited, and if in practice they are shown to react unfairly or inequitably against a number of people they are always open for review and, given the approach of the Treasurer and the Government to these matters, I have not the faintest doubt that they would be reviewed. But I think that in practice we are going to find that these exaggerated examples are, by far, the exception to the rule. They are most unlikely to occur in practice, and surely the Treasurer is being more realistic than the Deputy Leader of the Opposition when he points out that if profits do arise from the sale of property within 12 months of purchase, it is much more reasonable to assume that this has been due to a speculative transaction rather than to one enforced by other considerations.
I move from there hastily back to my original purpose, and that is to discuss the question of the abolition of tax deductibility of donations to war memorial funds. This move obviously came from a recommendation in the so-called Coombs Task Force report and its origin is to be found in item 136 of that report. It goes without saying that since the abolition of this deduction is Government policy and comes within the Budget measures, I do not oppose it. On the other hand, I am not all that enthusiastic about it either since, at least in some respects, I have the suspicion that it goes too far. In particular, I do not share the sense of indignation which comes through so clearly in the language of the Task Force report. Moreover - indeed this is my main reason for raising the matter - item 136 also deals with the other charitable deductions allowed by section 78 (1) (a) of the Income Tax Act. I do want to make the point specifically that I hope that the implied suggestion there that the abolition of deductions should be extended to these areas as well, will not be implemented.
Let me quote some of the comments in the report relating to these matters. For example, it says at one point:
The ‘hard core’ of the gift provisions relate to areas in which, at the time of their introduction, governmental activity was heavily supplemented and complemented by private activity.
To which I would add - and still are. Again the report says:
Some provisions have been widely abused: as gifts for war memorials are deductible, there has been a rash of ‘memorial’ swimming pools, private school gymnasiums, churches, chapels, and so on.
This comment can only be understood as a criticism of the organisations sponsoring war memorial projects, and I believe that any such criticism is unfair and misdirected.
– And from a man who did well out of the war, by not going to the war. It could be understood by that.
– It is, of course absurd that 28 years after the war we should still be sponsoring new war memorial projects, and I am sure I have the approval of the honourable member for Barker (Dr Forbes) for that But if there is any fault to be ascribed from that, it is the fault of successive governments for failing to review these provisions, and not the fault of organisations who have brought them selves within them. From their point of view, while section 78(1)(a)(vii) has existed, its principles and provisions have been available for adoption. If I understand the position correctly, every war memorial project has also required the approval of the Taxation Office in advance, and when these requirements have been met I see no room for criticism, expressed or implied, to be directed at the organisations concerned.
This, by the way, is without even making reference to the nature of the war memorial projects themselves, all of them necessarily non-profit, and almost all of them providing reasonable and useful facilities as well for a broad cross-section of the community. Given the background of these considerations, I am pleased that the Government, while adopting the proposal to abolish the deductibility, has not adopted the terms used by the Task Force in support of the amendment. I also welcome the fact that the Government has not adopted the sudden death cut-off implied by the report but has allowed a phase out period of 12 months so that donations to existing memorial projects made, before 30 June 1974, will still be deductible. But frankly, given the proviso that no new projects would be granted war memorial status, I believe that an even longer phase out period of 2 or even 3 years would not have been unreasonable. This consideration arises especially in view of current fund raising techniques. I think most honourable members will be aware of how large scale funds of this nature are raised today. Apparently you do not go to a man any more and say: ‘Give us a donation’ and it is physically handed over. You say: ‘Make us a pledge’ and it is a pledge to be paid over 4 or 5 years by annual instalments. It is less painless and you apparently get much more.
What happens, though, is that the organisation proceeds immediately to build its project on the basis of its total pledges, and what it uses for colateral is not only the building which is constructed but also the pledges which have been made by intending donors on a bona fide basis. With the abolition now proposed to apply from next June, it is obvious that in the case of at least some projects which are at present under way, either the organisations or the donors, or both, are going to end up severely embarrassed and through no fault or bad faith of their own. It is on that basis that I would be inclined to say that an even longer phase out period would not have been unreasonable.
There is another casualty of this amendment which has not been referred to by the Task Force and which should be at least recognised if only again to illustrate the need for the closest scrutiny of any further such amendments. As will be seen by a reading of section 78(1)(a)(vii) the section now to be discontinued, this not only supports the construction of new war memorials but also the maintenance of existing war memorials.
Whatever may be said about the ‘abuse’ with respect to war memorials to be established for the first time in 1973, it can hardly apply to memorials which date from earlier years, many of them obviously built in the immediate sorrow and hopes for future peace which followed the First and Second World Wars. I cannot do more than hazard a guess at what it would cost to continue tax deductibility for the maintenance of the memorials already established. I suspect that it would be little. I would have hoped ‘ that perhaps we could have accommodated that by allowing for tax deductibility of that expenditure.
I cannot conclude without reference to the fact that I hope that at least these drawbacks, even to this reasonable proposition related to war memorials, will serve as a caution to the need for care and consideration of further amendments which might be considered in relation to other charitable purposes. Again referring to item 136 of the report, under the heading ‘Possibilities’ are listed possibilities which include the partial or total abolition of exemptions of donations to all charitable causes. With due .respect, it appears to me that even the listing of these possibilities indicates a surprising insensitivity by the Task Force to the role which charitable organisations still play in the community as well as to the fact that the value of tax deductibility to their efforts is out of all proportion to the cost to Consolidated Revenue. I regret that time has caught up with me, but I think that the follow-on from these comments will be obvious to honourable members and I hope it is kept in mind.
-Order! The honourable member’s time has expired.
– The Australian Country Party fully endorses the remarks of the Deputy Leader of the Opposition (Mr Lynch). We agree with his analysis and support the amendment. This Bill con- tains a number of major proposals, almost all of which my Party and I view with the greatest of disfavour and as completely reprehensible. It is just not possible in the short 20 minutes available to me to deal with them all. For example, the withdrawal of exemptions for goldmining - although I believe we may have some surprises here; the very major reductions in the concessions allowed to life insurance companies for calculated liabilities which, in rum, will affect millions of Australians through bonus reductions and probably increased premiums on new policies; the withdrawal of concessions for expenditure in the development of export markets; the change in valuation of stocks of wine-makers; the taxation of certain pensions; the removal of the age allowance; and the inadequacy of the small increase in company retention .allowance in view of the direct increase in private company tax, are all important matters on which I would take strong issue with the Treasurer (Mr Crean).
Honourable members simply do not have time to discuss all these matters and as the Country Party can expect to have so few speakers on this Bill we must limit our remarks to just a few of the propositions.
I shall be speaking predominantly to those proposals which are contained in clauses 12 and 13 of the Bill which provide for accelerated depreciation allowances to be removed from primary producers; to clauses 14 and 15 which provide for the investment allowance to be terminated; and to clauses 17 to 19 which propose that immediate deductions for capital expenditure on land used for primary production shall no longer be allowed. In the Budget Speech, and in so many speeches by Government supporters since, the Government has spoken scathingly and in a quite uninformed fashion about the privileges of country people. But country electors spoke very loudly and clearly in their ballot in the New South Wales State election. If this type of legislation continues to be introduced they will censure the Government again at ever)’ ballot for what even the urban-orientated national Press has referred to as the Government’s ‘severe anti-rural bias’. The Government will probably, by a number of manoeuvres, seek to minimise the effect of this country vote. But the wrath of the country people is being made manifest and will be made manifest. I think that the Minister for Services and Property (Mr Daly), with his electoral maps and red pencils might do well to ponder this point.
I want to speak particularly about the accelerated depreciation of primary production plant and structural improvements. This concession is to be removed. The purpose of this provision was to allow as a deduction over 5 years at 20 per cent a year depreciation of plant and machinery used in primary production. These privileges were included in section 57aa and 57ab of the Income Tax Assessment Act. Section 57ab refers to the Northern Territory and it has been interesting to listen to speakers from the Government side of the House during the last couple of nights speaking about the rights of the people of the Northern Territory. This is one right that the Government proposes taking away. I contend that the Treasurer’s statement that this provision should be removed and the depreciation allowance related to the actual life usage of the implement or plant is not justified. In my quite extensive experience in primary production and as an accountant and tax agent, I have found that the existing rates of depreciation are quite realistic and are related to the usage of plant in particular. They are not in any way inconsistent with the effective and best life of that plant. It is more realistic than the proposal to write the plant off over 10 years. In fact efficiency in primary production, as an industry, is very dependent on adequate and reliable plant. The insertion of the existing sections was a recognition of this factor. It was also a recognition of the very appositefact that some consideration had to be given to obtain this provision because unlike industry and business where fluctuations are more predictable and usually of not such great magnitude, where they are not assailed by seasons, pests and so many unpredictables and where they do not have to face the fact that one good season is often followed by a multitude of adverse seasons, we should realise that the primary producer is in a different position. The provision of these sections made it possible for primary producers in a good season to be encouraged - not privileged as Government supporters aver - and enabled to replace at reasonable intervals plant which had outlived its effectiveness and efficiency or had been superseded by more efficient and economical equipment.
– Or to boost productivity.
– Or to boost productivity, as the honourable member for Calare reminds me. I stress, not for the information of primary producers who know it well but for members opposite who in the main do not know and understand primary industry, that probably no other industry sees its plant become obsolete more quickly than does primary production. When one considers the rising costs of production, the impossibility of obtaining even unskilled labour, the frightening costs of parts and repairs, the need to diversify or to alter crops according to market requirements, the primary producer who has to battle on with his worn out tractor and obsolete plant has little prospect of success. He is hamstrung and unable to alter his crop program -unable to diversify. Yet irresponsible voices from the Government benches call him ‘privileged’.
Sections 57aa and 57ab do not confer any privilege; they are vitally necessary because of the vicissitudes of primary production. I have tried briefly to sketch the situation in the few minutes I have in which to speak. The Government does not seem to understand or will not understand. The removal of these sections of the Act will be disastrous and unwarranted. It is a blatant attempt by these people who talk of a 35-hour week - which at the right and proper time I do not condemn - to reimpose on the primary producer long hours and the necessity for slave labour where the whole family has to return to an unprivileged status of yesteryear. Why? The Postmaster-General (Mr Lionel Bowen) summed it up at another time when he indicated that these people probably support the Country Party and therefore by inference should be denied consideration.
I turn now to the investment allowance. The investment allowance for primary production in particular was introduced to maintain and increase production. Surely production is necessary particularly when sales commitments are being made by a Minister when there is a doubt of our ability to supply. The need for adequate and efficient machinery in obtaining top production was the reason for the introduction of this provision in the Income Tax Assessment Act. It provided that where new machinery was purchased an investment allowance of 20 per cent could be written off against that machinery. Its elimination at this time is senseless, untimely and shows a complete lack of comprehension. Farmers are expected to persevere with second hand or outdated machinery and, as far as this Government is concerned, future production does not seem to matter at all.
I turn to sections 75 and 76 of the Act. These are important sections and they are to be deleted. Those sections allow for immediate deductions for the cost of certain capital expenditure on equipment used for primary production. The removal of them from the Act is inexcusable and unacceptable. The reason for the elimination of those sections, according to the Treasurer and the Government, is the allegation that this benefit was predominantly being enjoyed by Pitt Street farmers. This just cannot be substantiated. There are far better ways of dealing with Pitt Street farmers than to remove such deductions from bona fide primary producers.
An examination of the expenditure covered by item 75 is interesting as it illustrates what I am trying to say. Let us look at what it says. Some of the expenditure was on the eradication or extermination of animal or vegetable pests from the land. Surely that is for the good of our nation and country. Another was for the destruction of weed or plant growth detrimental to the land. Of course that is necessary and desirable. Surely the Minister for Conservation should be on his feet supporting us on matters like this. Another thing was the draining of swamp or low lying lands where that operation improves the agricultural or grazing value of the land. Where it allows us to bring into production land that could not be used before, surely that is important. The section refers to preventing or combating soil erosion on the land otherwise than by the erection of fences. That is an expensive and necessary process. Has any urban based Government supporter ever seen the ravages of soil erosion and land going out of production to be lost forever, irretrievably? If not, let them talk to my friend the honourable member for Darling Downs about it and he will tell them something about this problem. We have to conserve our valuable land for production now and for the future. This positive step, which was a necessary assistance, is being removed and we have a Minister for Conservation on the other side of the House who does not seem at all concerned about it. Subsections (ti) to <k) of the same section of the Act are very important. They deal with things like water conservation, irrigation, levee banks and the like. In this country where water con servation is so fundamentally vital, and indeed the Minister for Northern Development on more than one occasion has spoken of the importance of Government water resources programs, it is inconceivable and totally inconsistent that an unrealistic attitude is taken by the Government in removing these concessions from the Act. It is undeniable that this provision has been absolutely vital in a country where rainfall is irregular and unreliable, where water must be conserved and where irrigation, in many areas, is vitally necessary and is an expensive operation. It allows us to run stock where we could not run stock otherwise. It allows us to grow crops on land that would otherwise be unproductive. In my extensive experience in a rural area and in a public accountancy practice I have seen this section used almost exclusively by bona fide, full time, primary producers struggling to grow crops. The deletion of this provision will effectively hamstring these people in performing measures that are so essential.
The section deals with fodder conservation. There was an allowance for the immediate writing off of the cost of structures built for the conservation of fodder and grain. Fodder conservation comes into the same category as the water conservation of which I have spoken. In this country we strike very unreliable seasons. Many areas have a predominantly low rainfall. We get a bountiful season now and again and a multitude of droughts. Fodder conservation is something that is expensive and must be provided by the primary producer, but that provision is being removed, callously and senselessly. Only time prevents me from elaborating on the absolute folly of this action.
How, in such a short time, can I sufficiently emphasise the decision relating to valuation of wine and brandy stocks, which is a disastrous decision? It is not overstating the position to say that it will almost certainly threaten some manufacturers, particularly some family companies that are hit by other sections of this Budget, with hardship and even threaten bankruptcy. The Government has estimated that this will produce something like $15m. The wine producers have challenged the Government to prove that figure. They would be happy if the Government would guarantee that it would set a valuation at a level that would not bring in more than $15m. The wine producers say that it will be nearer twice that amount. I say that this valuation of wine stocks is something that is totally unfair. It means that no longer will the manufacturer be able to defer his tax until the commodity is sold and the profit made. I thought that that was a quite reasonable proposition.
– It is the usual proposition.
– Of course it is the usual proposition, as the honourable member for Angas says. This consideration does not seem to enter the minds of members of the Government who seem to have a quest for revenue, and the way they get it or the discriminatory practices they use do not seem to matter. Where is it coming from? The primary production sector, and from the pensioners. So much for the promise that tax would not be increased. Removal of these deductions and concessions and the imposition of new stock valuation as well as the imposition of tax on pensions and the removal of the age allowance is specifically increasing taxation. To say otherwise is indefensible and thoroughly dishonest. It is discriminatory and motivated by political expediency. That is another promise that has now been dishonoured. My time could be completely occupied tonight in raising protests on behalf of the pensioners and the old people of Australia - to what effect? The Government in this House by the ruthless use of its numbers listens not to reason and indeed it is becoming somewhat unusual for Opposition members to be able to speak at all because of the gag and the guillotine.
Private companies have been savagely treated. Not only has there been a rise in private company tax but also there has been the new provision of quarterly tax assessments in advance of the usual time for payment. And the totally insufficient palliative of a minor adjustment to the retention allowances still impose upon private companies particular disabilities not applicable to public companies. This retention allowance leaves no room at all for provision for capital development and expansion. It provides no adequate buffer for adversity. It is not the first time in this House that I have appealed to the Treasurer to consider this matter. He seeks to equate the rate of tax on public and private companies but retains this imposition of the retention allowance for private companies that is unjustified. To excuse this on the basis that most public companies pay out in divi dends at least 50 per cent of their tax after tax profits is not realistic. They may do that on occasions, but there is no mandatory requirement on them to do it. But if a private company wishes to provide for expansion and development it is penalised by paying penalty tax on undistributed profits. These taxation Bills are direct indictments of a dishonest government which promised no taxation increases and which has now compounded previous taxation increases by way of direct increases in fuel tax and Post Office charges which are considerable and savagely anticountry.
This is a Government which insists that primary producers are enjoying great prosperity. Let us analyse that statement. This Government does not consider the problems of the past and the probability that not so bountiful seasons might lie ahead. It wants to tax the primary producers in order to finance its inflationary programs. This year, the first in many years, when primary producers had an opportunity to update their machinery, to replace their plant, to undertake necessary fodder, water conservation and irrigation projects, to eradicate pests and to carry out clearing in order to bring land into production, the tax deductions are taken away and the money is appropriated for revenue. The Country Party opposes this anti-country attitude. Therefore, we support the amendment moved by the Deputy Leader of the Opposition. We agree with his analysis and we endorse his remarks.
– The honourable member for Fisher (Mr Adermann) was less than honest when he said that the Government had promised not to increase taxation. What it promised at the last election was not to increase personal taxation. It did not do so. In honouring that promise this year the Government has had to take other monetary measures which it would not have taken had it increased personal taxation in the last Budget. So to that extent the Government has kept its word and kept faith with the electorate. The Government gave no specific undertakings in regard to company tax and indirect tax. The Opposition has argued since the election that we are living in an inflationary situation at the present time and that we should have increased personal taxation to a level that would have obviated the need for the introduction of other monetary measures during this year. So in honouring our election promise we did not increase personal taxation.
On another score, the Opposition ought to make up its mind about the principles by which it wants to operate. I will deal with the question of taxation on any increment earned from the purchase and sale of property within 12 months. The Deputy Leader of the Opposition (Mr Lynch) said that this was a terrible thing, that in his electorate people were moving in and out of properties within 12 months, that they had to replace their properties and, of course, that they were charged income tax on any increment that they received from the sale of the properties. But that does not happen on a very large scale. It is most unusual for a family to move house within a year, and to do it continually. What was happening was that people were buying homes as a hedge against inflation and as a way of earning money for themselves. They were buying homes and selling them within a year. People like estate agents would see a reasonable cheap house come onto the market. They would grab it themselves, add a bit to the price and sell it again because there was always an enormous demand for housing. Within a year they could sell perhaps one or two homes and not have the profits assessed for income tax purposes. That was happening with a lot of people and it was creating an inflationary situation in housing. So we have said that profits from any property bought and sold within 12 months will be assessable for taxation purposes.
The Opposition, when in government a year previously, adopted a similar principle. It said that the profits from any shares bought and sold within 18 months had to be assessed for taxation purposes. We have applied the same principle. The Opposition cannot apply that principle in one year and then criticise us for adopting a similar principle which provides that profits from a property bought and sold within 12 months are to be assessable for taxation purposes. If a property is bought and sold within 15 months or 2 years, of course, the profit is not assessable for taxation purposes unless the Commissioner of Taxation decides in terms of section 26a of the income tax legislation that the profits are part of the general income earning performance of a family or an individual. If he so decides, the profit from any sale would naturally be assessable for taxation purposes. But that is left to his discretion under section 26a of the Act.
The question with which I want to deal tonight more than with any other is the question of the retention allowance and undistributed profits tax. This arises from the Government’s decision to increase primary tax on private companies from42½c in the $1 after $10,000 to 45c in the $1 this year, and to 47½c in the $1 next year, which will bring the rate into line with those paid by public companies. I agree that the rate of primary tax paid by public companies ought to be brought into line with that paid by private companies, but I have reservations about leaving the retention allowance and the undistributed profits tax provision. I have from the CCH Australian Federal Tax Reporter of April 1973 a table which compares the total tax payable for partnerships with 2 partners as against that paid by a company with 2 shareholders. I seek leave to have this table incorporated in Hansard.
– Is leave granted?
Br Forbes- Yes.
– Leave is granted. (The document read as follows) -
– I thank the honourable member for Barker. The table shows that on a distributable profit of $10,000 in a partnership of two, the total tax payable is $1,834. In a proprietary company with 2 shareholders the tax is $3,959. If one doubles the distributable profit to $20,000, one finds that in a partnership of two the tax payable is $5,777, and in a proprietary company with 2 shareholders it is $8,741. So below about $15,000 the tax payable by 2 persons who operate in a private company compared with 2 persons who operate in partnership is roughly double - that is after they get through primary company tax on the private company, plus personal tax which is paid after the money is distributed. The differential is even greater in the case of property income where 90 per cent must be distrubuted
The new rates will, of course, increase this gap to a point where it can be expected that many private companies .will be wound up and their businesses carried on by the proprietors in partnership. This seems to be an unfortunate step because for purely commercial reasons - apart from any taxation considerations - the corporate form is superior to partnership in many respects. I shall outline some of them. The first is limited liability which encourages people to be more venturesome and progressive than they would be with the unlimited liability of a partnership. Let me take, for example, a couple of people in a small machining business who, because of these tax provisions, could no longer afford to be in a private company. They would go into partnership, and if they ran into any heavy weather or if someone defaulted on a contract, their assets, such as their homes, could be sold; they have no limitation of liability. The second question is continuity of business. The death or sudden retirement through illness of a principal of a company is likely to interrupt the smooth running of a business much less where he is a shareholder and director of a company than where he is a member of a partnership which is dissolved by his death. Thirdly, a partnership is a much more difficult relationship and more fruitful of disputes than common shareholding and directorships in a private company, and a person could get into a lot of legal jams because of this. Fourthly, in a private company, generally the introduction of new capital and new principals is easier than in a partnership.
To overcome the taxation handicaps of the private company and at the same time maintain the advantages of limited liability, businesses might well be forced to enter into unreal and cumbersome arrangements, such as having the profit making operation conducted by a partnership whilst surrounding it in some way by a private company for protection, the private company operating on a non-profit basis. Those considerations point to the need for what I would term an incorporated partnership which would have the benefits of a limited private company but whose members would be taxed as though they were partners. A private company could elect to be treated for tax purposes as an incorporated partnership, the consequence of which would be that the company would lodge tax returns as a partnership now does and would pay no tax. The whole of the company’s income would be deemed to be the income of the shareholders and taxed in their hands. The provisions of the taxation Act referring to the partners, that is section 94, would apply to the shareholders.
If the Treasurer’s objective is to prevent taxation abuses by private companies rather than to force people into the inconvenience of partnership, it would seem that there should be no revenue objections to the concept of an incorporated partnership and the practical commercial advantages could be considerable. Furthermore, companies come under the control of the Corporate Affairs Commission and under the companies Acts of the States whereas partnerships do not. So it would seem that the States and Federal authorities should have an interest in seeing that as many enterprises as possible are carried out in corporate form rather than as partnerships. As the whole of the profits would have to be distributed the incorporated partnership concept is likely to be attractive only to the family or small scale enterprise and would be an alternative to partnership and not to public company status. I agree that at the moment there is no choice. If a person is not satisfied to be in a small private company he either has to enter a partnership or a public company. Thus, enterprises would have 4 choices - partnership, incorporated partnership, private company or public company. It seems to me a very sane proposition that a person should be able to elect to go into such a thing as an incorporated partnership because he has all the legal protection of a proprietary company and yet for tax purposes he has only the obligation of an individual.
In the table that I read earlier I indicated the enormous tax benefits that flow to persons in a partnership with an income under $20,000 or under $30,000 for that matter compared with 2 individuals taxed in a private company. After the primary company tax is paid and after the distributed profits are given to individuals and a personal tax is paid on that, it makes a private company now a very expensive proposition. For large private companies that border on the class of a lot of public companies I have no objection to the retention allowance. It forces these companies to distribute sufficient of their funds or their profits. This is, of course, one of the attractions of the undistributed profit tax or the retention allowance. I think I should make the point that a lot of public companies pay out less than 50 per cent of their profits. In that case the private company is held back. The public company seems now to have enormous advantages over a private company.
The view has been propounded by a lot of people that the reason why public companies distribute profits is because of shareholder pressure, but very rarely would there be a meeting of shareholders representative of the small shareholders in a public company that would actually force a dividend issue on the directors of a company. Due to the financial inflow to the persons involved in a public company, public companies generally distribute a certain percentage of their profits. By the same token I believe that the private companies would do the same if they did not have the undistributed profits tax. Of course there is the view that can be put by the Treasurer - and I can see his point - that the private companies would then amass funds as undistributed profits and then at some future time wind up the company and collect that money as a capital gain without paying the tax they would have paid had those profits been distributed. On that basis there is value in keeping the retention allowance, but of course where it is not applicable - and I believe it is unfortunate that it will be retained - is to the companies which are of a family company nature or of smaller companies with an income of less than $30,000 a year. A company of 2, 3, 4 or 5 shareholders will pay almost double the tax that it would pay as a partnership. No one would put himself in that position. The shareholders would go into a partnership and the moment they do they have all the legal problems of a lack of liability protection that a private company gives them. Not only that, but for the Federal and State authorities there is no access to these partnerships by the corporate affairs commissions of the various States.
To that extent I ask the Treasurer to look seriously at this concept of an incorporated partnership. It will allow people to lodge a tax return as a company but be assessed for tax as individuals. If the Treasurer allows that course I think he would do a great service to all those many small companies in Australia that have a lot of initiative and a lot of backbone, that move into the developmental areas on a shoestring, that do a reasonable job and that are developing new technology, processes and industries. A lot of that will be taken away and the companies cannot be half as adventuresome if they have not the protection given to a private company. I ask the Treasurer very sincerely to consider the proposal I make. I will not waste the time of the House on any further matters. There are a number of matters in this Income Tax Assessment Bill (No. 5) but I wanted to deal specifically with this issue.
– The Income Tax Assessment Bill (No. 5) deals with many of the most important budget measures that increased taxation on the Australian community. I will list one or two measures, but they are by no means all. This Bill alters the gold and other smaller mineral subsidies. It alters the depreciation allowance over a wide range, including land clearing, soil erosion measures, fencing and dams. It entirely deletes investment allowances and thus reduces efficiency in the productive element of the Australian economy, .that element being the manufacturing sector and the rural or primary industries. It taxes many age pensioners. It removes some of the benefits of the war memorial projects. It increases taxation and removes special deductions on life assurance.
The measure I wish to refer to entirely tonight is the deletion of section 31 (a) from the Act. That action heavily hits the part of the wine industry that makes, ages, stores and blends wines and brandies for good quality wines. I wish to mention this aspect of the Bill tonight because I maintain that it is the worst example of sectional discrimination ever visited on any one industry in the history of Australia. Firstly the revaluation of stock hits all elements of the wine industry very heavily. Although it is outside the scope of this Bill I mention the increases of excise duty and subsequent sales tax increases which amount altogether to a 62.4 per cent increase. This brings the Governments rake off from this industry to $794 a ton and leaves the growers’ return at approximately $60 a ton. It increases the Governments rake off from $440 a ton to $794 a ton. That is the result if we base the calculation on the fact that 40 proof gallons would be the yield per ton. It is a variable quantity from one winery to another. It is the worst example of sectional discrimination ever visited on any single industry by any Treasurer as far as I can tell in the history of the federation of the Australian States. It proves that this Government has a very voracious appetite for taxing anybody. The only thing that stops this principle being visited on other sections of the community today is the fact that this Government made a promise to the Australian people - I will deal later on in my speech with other promises - that it would not raise personal income tax. I have already mentioned revaluation of stock, the increase in excise duty and the consequent increase in sales tax amounting to 62.4 per cent.
I now mention the increase in private company tax which hits every industry including those in the electorate of the honourable member for Port Adelaide, if not the bigger ones. Some wineries will also be hit by the altered depreciation schedules in relation to land clearing, fencing and so on. There is to be phased in an equalisation of the advantage which was previously handed out to the brandy industry for very good reason. The reason is based on the fact that the brandy industry is an entire industry unto itself. It is not a by-product industry, as are the industries of its competitors. It is not a by-product of the sugar industry or the grain industry. It is an industry unto itself. That is the reason why governments more sensible than this one gave it an advantage in the production of brandy. There are many examples in the past from 1951 onwards, when previous governments tried to do what this Government in its misguided zeal is attempting to do, of individual brandy producing distilleries losing 50 per cent of their sales of brandy. One hopes that the same circumstances will not apply now, but history says that in the past this has been the circumstance.
I know very well that Government supporters will duck behind any cover at all on this matter. They know very well that the Treasury officials with their voracious appetite - I will not refer to that of the honourable member for Port Adelaide - have a longing for income tax funds that cannot be satisfied. I know from my experience with wine excise that the Department of Primary Industry is not much help either. In fact after what 1 might call with great honesty the slight debacle of the exercise in wine excise recently, three of them told me how much they had learned. On the front bench on the Govern ment side today we want people who have a bit of discernment, who have had a bit of experience with the wine industry and all its ramifications.
– That is a subject you ought to get off.
Mr DEPUTY SPEAKER (Dr Jenkins)The honourable member for Port Adelaide is interjecting while he is out of his seat.
– I did not hear the interjection, so let him go, Mr Deputy Speaker. The honourable member for Port Adelaide and his mate the Minister for Labour (Mr Clyde Cameron) would do well to think back-
– A real statesman.
– As for the honourable member for oranges who has not got a clue, he had better wake up because on the result of the New South Wales election his seat is gone a mile. He will have to do better than he has done in the past here otherwise he will have no hope of retaining his seat. He might take that advice from me in passing.
-I suggest that the honourable member to return to the Bills.
– Thank you, Mr Deputy Speaker. I will certainly do that. Having mentioned 6 ways in which parts of the wine industry have been unduly hit by this Government with its determination to try to cost completely out of existence every industry that does not exist in a metropolitan area, I will return to the subject of revaluation of stock. This Government has gambled that the wineries and the distilleries of this country will be able to find an amount which the industry says is $37m over a period of 5 years commencing in 1974. If the wineries are unable to do this there are several alternatives. Firstly, they will go broke. I will quote later on in my speech the opinion of the Labor Premier of South Australia on how many will go broke. The second alternative is that they will have to seek equity elsewhere. Nobody in this House who knows what this Government has done would want the small family wineries in this country to be taken over. The Deputy Leader of the Opposition, the honourable member for Flinders (Mr Lynch), mentioned foreign takeovers. That is one possibility. Surely nobody wants the wine industry to be taken over by the bigger wineries in this country, whether they be international wineries or not. In fact, one may go so far as to say that only 16 per cent of the wine produced in Australia today is produced under circumstances where international finance is even remotely involved. The rest is produced by the small traditional wineries which have put Australia on the map.
– The honourable member does not think they have put Australia on the map?
– That is right. I agree with him.
– I was referring to the honourable member for Hindmarsh who doubted my statement. If anyone has bludged more wine off the wine industry than has the honourable member for Hindmarsh, I would like to know who he is. One alternative in the event that the wineries are unable to find the funds is that they will go broke. The second is that they might be taken over. The third, which is probably the most important, is that these wineries will have to sell out the very stock from which their top quality wine is made. To quote an example - and I think some members of this House will understand the analogy that I am about to draw; I know that the Treasurer will - -Penfolds Grange Hermitage was to my knowledge last issued as a wine from the 1967 vintage. It has not been issued since. Penfolds winery will find that the very wine that it is trying to store from its vineyards above Adelaide and Magill will be the last stock they will be able to afford to hold. This ridiculous short-sighted section of this Bill does not make it possible in my opinion for wineries, particularly the small ones, to hang onto the very top quality stock which has made Australian wines favourably received not only overseas and in this country but also by some honourable members opposite, and I hope they damned well remember it.
If they find themselves short of funds and they have to sell off their high quality stock - and I hesitate to use this argument as I hesitated once before in a debate on wine excise - they may find that they will be forced to rescind contracts of 20 to 30 years standing with small wine grape growers. With great reticence I have succeeded in restraining myself from speaking on this matter since the Budget was delivered. I know that one firm has now cancelled contracts with 32 growers in my electorate who provide grapes for the purposes of brandy distillation. This is a direct result of revaluation of stock. If a firm such as this is squeezed for liquidity there is a very grave danger that in the event of a big yield of wine grapes in a year there will be an incapacity in the industry, due to this short sighted policy, of the little grape growers to sell their grapes.
Grapes are not like wheat or barley which are used to produce vodka and whisky. They are not like the sugar industry which produces rum. Those items are by-products of those industries. You cannot sell on any alternate market grapes which are grown for the purpose of making brandy. One can put grain even down an honourable member’s gullet, probably with great advantage. One can do all sorts of things with sugar. But perpetually Federal government departments - not only under one Government - have succeeded in deluding themselves into believing that these levies on the wine industry are imposed on the big fat wineries. Very rarely does this happen. Frequently the onus is placed on the little people who have nowhere near an income of $105 which is the average wekly income in this nation today.
Now I would like to refer to what the Coombs report had to say about this area of taxation. Not only in this instance did the Government accept the recommendation of the Coombs report; in this case it went one better. The Coombs report says:
Upward revision of the rninimum values laid down under Section 31a would yield savings to revenue which, obviously, would vary depending upon the extent of the adjustment involved. Alternatively, Section 31a might be repealed . . .
That is what the Government decided to do. In this case it has gone one better than the Coombs report recommendation.
Let us look at what has been said elsewhere in relation to this matter. I have a letter which was distributed throughout my electorate prior to the last Federal election. This letter was distributed to wine grape growers, to distilleries and to wineries. It was a fund raising scheme concocted by the Premier of South Australia, not, I might say a man of my political colour but a man of the political colour of honourable members opposite. The Premier said:
The future of the wine industry has become an issue at the forthcoming Federal elections.
The Australian Labor Party believes, and its Federal Executive has stated, that the only solution that will guarantee continued prosperity for the wine industry and the many thousands of growers who supply it is complete abolition of the excise and its non replacement by a sales tax or any other imposition.
I seek your financial support for the ALP campaign for the Federal elections.
He went on to develop the alternative methods of donating to the Labor Party. He said:
Whitlam said it will not be replaced by any other imposition. Is this a serious imposition? Can it be looked on as an imposition? What do honourable members think about that? It seems to me that there has been a bit of political chicanery, if I might say so, in relation to that- I do not ask honourable members opposite to believe me or to believe anyone else but I would ask them to listen to what was said by the Premier of South Australia on the same issue. The Premier of South Australia said that Federal Budget tax measures against the wine industry were worse than those imposed by the last Liberal Government with wine excise.
– What does the Minister for Labour say about that?
– What does Whitlam say about that? He is the one who has been caught with his pants down. He is the one whom the Premier of South Australia has dismissed as a potent political force because of his chicanery. He is the one whom the Premier of South Australia will not wear today because his word cannot be trusted. That is why. I speak here for hundreds of grape growers who believe the same thing.
I would like the Prime Minister to be here for once to answer some of the allegations that he himself has started; I did not. The whole situation is despicable for the people I represent. If they cannot believe in the Prime Minister of the land or any of his Ministers, whom can they believe in?
– Not you.
– ‘Very funny. The people in my electorate who are listening tonight will be delighted with that interjection. I do not think I have time in the 3 minutes left to me to go over, as I intended to do tonight, the history of the attempts by governments to tax the wine industry. The only comment I have to make in relation to it is this: It is very easy for city-based people to sit on their backsides, as Dr Coombs does-
– Hey, that is not parliamentary.
– I know that the Minister cannot sit on his because he is uncomfortable. People cannot sit on their backsides and say that this industry can stand some taxation or that industry cannot. The Grant report made very plain to the grape growing fraternity of this country, and I hope to one or two others which may have had time to scan through it lightly, that you cannot .under any circumstances over-tax these industries.
I have a marvellous quotation from a meeting which was held about 3 years ago frankly to crucify the honourable member for Angas. Several interesting things happened at the meeting, one of which I will mention in the two minutes left to me. This is an extract from the speech I made at that time when I had SOO people against me. I said that there was one condition on which I would join the Labor Party, in terms of its past exercise in trying to vote against wine excise which, by the way with 50 per cent off, would have been a damned sight better than what is levied on the industry today. That is a quotation from Mr Dunstan. At the .meeting I said:
I am distrustful of the Labor Party’s intentions. I rather feel myself that they are in favour of the workman’s best friend, beer, and will have scant regard and sympathy for wine grape growers or the Wine Industry.
At the time I was booed. I do not believe that I would be booed today because this legislation, if I might say so again, on 6 points is the worst bit of discrimination in my memory that has ever been brought to bear on the wine industry. I say with a great deal of emphasis and sincerity that it is a rotten deal for that industry.
– Order! The honourable member’s time has expired.
– Mr Deputy Speaker, I wish to make a personal explanation.
-Does the honourable member claim to have been misrepresented?
– Yes. I have been grievously misrepresented by the honourable member for Angas. At least 3 times during bis speech he mentioned the honourable member for Adelaide in some context. I cannot believe that he meant me.
– I rise on a point of order, Mr Deputy Speaker.
– Let me continue. At one stage-
– Before the honourable member goes any further let me say that I apologise. I was looking at the honourable member for Port Adelaide. I hope that the honourable member for Adelaide will realise my obvious error.
– Mr Deputy Speaker, I have been misrepresented.
-The honourable member for Port Adelaide is not in his seat and the Chair cannot recognise him.
– As my name was mentioned it will appear in Hansard and as; I was accused of having a voracious appetite for taxes do you think, Mr Deputy Speaker, that honour has been done now that the honourable member for Angas has apologised?
-I think that the honourable member for Adelaide has given sufficient explanation.
– This evening we have had a learned dissertation from the Deputy Leader of the Opposition (Mr Lynch) in regard to the Bills that are now before the House. In a typical speech he acted, as he normally does, as the apologist for big business. I could not help noticing the crocodile tears he shed in support of those who have gained benefits over the years which in equity they should never have obtained in the first place. What this Bill seeks to do is to restore some equity in taxation liability.
In introducing the Income Tax Assessment Bill (No. 5) 1973 the Treasurer (Mr Crean) said that the Bill would withdraw some taxation concessions that had been allowed to primary producers and manufacturers, following a careful review by the Government of a number of revenue concessions which could fairly be categorised as disguised expenditures resulting in additions to the burdens of other taxpayers. Those words were very true. In other words, this Bill seeks to restore some form of equity to all taxpayers, not just benefits to the few. This Bill will discontinue what is commonly known as the investment allowance which allowed a special income tax deduction of 20 per cent of the capital expenditure on specified new manufacturing and primary production plant. The Bill will also terminate provisions which allowed some capital expenditure by primary producers to be wholly deductible in the year in which it is incurred, and in other cases the allowance of accelerated depreciation over a period of 5 years. In future, deductions will be allowed as ordinary depreciation on plant and structures, and over 10 years on other items.
I wish to make a few comments in regard to the investment allowance. It is important to look at the reasons why the investment allowance was introduced in 1962. In presenting the measure the then Treasurer, the late Mr Harold Holt, said as reported in Hansard of 12 April 1962 at page 1651:
In proposing the allowance the Government aims to encourage greater investment in our manufacturing industries and thus ensure, in both the short and the long term, a greater volume of both output and employment. It seeks also to promote greater efficiency in manufacturing production from which should flow the advantages of lower costs which will benefit the Australian consumer and help our industries to seek export opportunities in markets overseas.
I make it clear that at that time, when the Labor Party was in Opposition, we did not accept the reasons given by the then LiberalCountry Party Government for the introduction of this measure. We did not approve of it then; we do not approve of it now. It could well be that there were deep political reasons for the introduction of that measure in the first place. It has certainly been of great financial value to the manufacturing interests and the giants of industry as I will show later in my speech.
It is commonly accepted that the investment allowance was the brain-child of the former Minister for Trade and Industry, Sir John McEwen. It was introduced in 1962 following the disastrous near defeat of the Menzies Government in 1961 as a result of the 1960 horror Budget. It has also been suggested that the manufacturing interests has been a prime source of funds for the Country Party under Sir John McEwen. This is not my suggestion; I would not know whether this allegation is true or not. But an editorial in that conservative newspaper, the ‘Sydney Morning Herald’, on 22 February 1971 makes no bones about it. One can hardly class the ‘Sydney Morning Herald’ as a left wing oriented newspaper. Speaking on the need for a tariff review, the editorial in that newspaper said:
The qualifying remarks are probably a political exercise intended to mollify an increasingly fearful manufacturing lobby that has been a prime source of Country Party funds under Sir John McEwan.
The introduction of the investment allowance in 1962 was opposed by the then Opposition spokesman and shadow Treasurer, the honourable member for Melbourne Ports, (Mr Crean) who is now the Treasurer in this Government. Let me quote his sentiments as expressed then, as recorded at page 1’859 of Hansard of 2 May 1962, because they are his sentiments now. He said:
We believe that this imports into the income tax legislation a new principle and that certain aspects of it should be subjected to criticism.
Later, at page i186o, he is recorded as saying:
I submit that to add something to that cost by way of a tax concession is in effect to subsidise certain industries which come within the definition of manufacturing’ provided that plant is installed within a certain period. The Treasurer (Mr Harold Holt) did not deny that that was his purpose . . .
At page 1861 he is recorded as stating:
I am not quibbling about whether this sort of thing ought to be done; I am simply saying that if it is thought that certain industries require some encouragement to improve their export trade, if it is believed that life insurance companies ought to devote a certain part of their investible funds to public loans, or if it is felt that certain kinds of investment in particular manufacturing industries ought to be encouraged, then the Government ought to be honest enough to say that that is the purpose of the measure instead of attempting to shelter behind the provisions of the Income Tax Act.
Those words which were true then are true also today. That is one of the reasons why the investment allowance is being removed by this Government.
I wish to quote some examples of how the investment allowance benefited the people concerned. In the case of a non-private or public company, as it is better known, the investment allowance which was granted by that piece of legislation when introduced was equal to a direct subsidy of up to 8.5 per cent of the cost of an item of plant. Applying this to an item of plant which would cost, say, $20,000, the investment allowance of 20 per cent of that $20,000, namely $4,000, would finally be worth $1,700 to the company after the company rate of 42.5 per cent had been applied to the $4,000. This would reduce the net cost of the plant from $20,000 to $18,300. The Commonwealth subsidy through the taxation system would therefore be $1,700.
The Australian Labor Party, now in Government, is not opposed to economic assistance to industry. What it opposes is the snide and underhand manner in which this assistance has been given since 1962 when this legislation first came into effect. If there are to be economic subsidies to particular industries, let proper inquiries be made as to which particular industries need this assistance, and which companies or which industries need assistance in the national interest and not in the interests of the individual industry concerned.
The Tariff Board currently makes these inquiries in regard to tariff proposals. It is proposed that, if the relevant legislation is passed, another body will take the place of the Tariff Board. When decisions are made after proper inquiry, the extent of the subsidies should be there for all to see, not hidden away because of the secrecy provisions of the Income Tax Assessment Act. I should like to know, and the people of Australia - the taxpayers - are entitled to know, how much this legislation has benefited the monopolistic giants of the Australian manufacturing industry since it was introduced. How much has been gained by means of this ingenious piece of legislation by Broken Hill Pty Co. Ltd, Australian Consolidated Industries Ltd, Australian Paper Manufacturers Ltd and the other industrial giants. The only people who know are the Commissioner of Taxation and his staff. I maintain that the people of Australia should know. They would know if this type of subsidy benefit were provided in the way it should be, if it is necessary - not through the Income Tax Act.
The previous Liberal-Country Party Government removed the investment allowance in February 1971. The Australian Labor Party supported the removal of that allowance. However, big business which is the master of the Liberal Party and the Country Party forced the then Government to reintroduce the deduction to be effective from 14 February 1972. That the then Government caved in to the demands of its masters is understandable when one looks at the amount of this unjustifiable subsidy paid to all manufacturing interests, big and small alike.
The elimination of the investment allowance for manufacturing industries will result in a full year in an increase in tax revenue of $60m. In other words, if this deduction were to remain, it would mean a subsidy of $60m to manufacturing industries in respect of new purchases of plant. The same position applies to primary producers. The subsidy for them in a full year amounts to $10m. Primary producers have often been referred to as God’s chosen people. When one looks at the inequitable tax benefits granted over the years to primary producers, it is no wonder that this phrase has been coined.
For the record, I wish to quote the net increase in revenue which will be obtained by this legislation as it affects primary producers. The increase of revenue by the discontinuance of the provision for accelerated depreciation of plant used in primary production will amount to $ 10m in a full year. The discontinuance of the immediate deductibility of certain capital expenditure items by primary producers and the double deduction previously allowed for expenditure on clearing and developing primary production lands will amount to an increase in revenue of $17m. The discontinuance of the investment allowance to primary producers will amount to $10m in a full year. In other words, on these 3 items alone, $37m a year, but for the provisions of this legislation, would have been granted by way of subsidy to primary producers whether or not they needed it. Surely that is not an economic way of doing things. Surely, if a subsidy is needed it would be far better to have an investigation through the Industries Assistance Commission or the Tariff Board to determine in what specific area assistance is needed, if it is needed, and then grant that assistance. Then all the people can see where the assistance is going and how much it is.
The figure which I have quoted as the amount of assistance which has been given by means of legislation to primary producers has not taken into account other benefits which primary producers still enjoy and will continue to enjoy because those advantages have not been removed by this legislation. Of great assistance to primary producers are the averaging provisions of the Income Tax Assessment Act. The averaging provisions for primary producers in Australia for the current year will grant benefits to primary producers of approximately $30m. So they are not doing too badly. As I said previously, if subsidy assistance is necessary, be it for manufacturers or primary producers, the most effective and proper way of providing it is to have a case heard before either the Tariff Board or the Industries Assistance Commis sion where the full facts can be brought out and the results of that inquiry made known to the people of Australia - the tax paying public. We should not have a situation where one section of the community is carrying another and that situation, I am afraid, has been in existence for many years. One of the purposes of this legislation is to end that type of inequitable assistance which until now has been granted to certain sections of the community.
I commend the Treasurer for providing in this piece of legislation for the taxing of casual profits from the sale of property within a year of acquisition. Possibly this is the first step in the institution of a capital profits tax. As honourable members will know, there is presently an inquiry taking place before what is known as the Asprey Committee. One of its terms of reference is to look at the possibility of instituting a capital gains tax. I would like to see it instituted. I am hopeful that when that inquiry is concluded the committee will recommend the introduction of a capital gains tax and that this Government will institute it. Exemption from taxation on profits derived from the sale of property within a year of acquisition has been granted to a person who finds it is necessary to sell his own residence because of a change of business or a change of employment. I think that is the only exemption that should be granted, notwithstanding the remarks of the Deputy Leader of the Opposition (Mr Lynch) this evening who cried crocodile tears over poor little ladies who are forced to sell their houses on the Mornington Peninsula and go to the Gold Coast. I could not see the merit of his argument. I have never been to the Mornington Peninsula but I have been to the Gold Coast and I have a shrewd idea that they are not forced to go there for reasons of health.
I again commend the Treasurer for removing, by the Income Tax Assessment Bill (No. 5) 1973, the differential tax rate applicable to private companies and public companies. It is proposed over a period of 2 years to bring the private and the public company rates into line. I know, from experience I had in another place before coming here, of the number of tax lurks which were used in the formation of private companies. One way by which such tax lurks can be eliminated is by eliminating the differential rate so that private and public companies pay taxation at the same rate. This is possibly the first step taken by the Labor Government in the institution of a new look in taxation legislation. I am hopeful that when the Asprey Committee brings down its report and it receives the attention of the Government the whole of our taxation legislation will be streamlined and more equity brought into the Income Tax Assessment Act. I hope we will have a simpler Act and an Act which is easier to understand. When that happens I am certain that the tax paying public of Australia will get the benefit rather than, as I pointed out earlier in my remarks, certain privileged sections of the community.
– Never before in my experience in this place has such widespread concern and widespread objection been expressed concerning any piece of legislation as has been placed before me as a Federal member of Parliament in respect of this Income Tax Assessment Bill (No. 5). I suppose I should not be surprised by such reaction because this Bill and its provisions affect almost every Australian in one way or another. In my speech I intend to refer specifically to the effect that the legislation will have on sections 57aa, 57ab, 75, 76 and 82 (3) of the Act. As honourable members will be aware these sections concern the accelerated depreciation rates and write off provisions referring to primary production. I think it would be fair to say that this Bill owes much of its origin to the Coombs report. The Coombs report gives as its reason for substantially altering the provisions of those sections of the Act to which I referred a moment ago that those sections have given an unnecessary stimulus to the activities of what are generally referred to as Pitt Street or Collins Street farmers.
It is clear from studying the Coombs report that the withdrawal or the drastic reduction of the substantial concessions contained in these sections of the Act has been due to the anxiety of the Government to catch up with the activities of that form of primary producer. However, the fact is that the Government has been unprepared or unable to give a definition of a Pitt Street or Collins Street farmer. I refer to a question which I asked the Prime Minister (Mr Whitlam) in response to an answer which he had given, I think to the Leader of the Australian Country Party (Mr Anthony). I asked the Prime Minister to give me the definitions which he proposed to apply to those who were Pitt Street or Collins Street farmers and of those which he was pleased to refer to as genuine primary producers. In his anwer to the question of the Leader of the Country Party, the Prime Minister indicated that no genuine primary producer had suffered any disadvantage under the proposals introduced by his Government.
When I asked the Prime Minister this question without notice, with characteristic modesty he referred it to the then Acting Treasurer (Mr Hayden), the Treasurer (Mr Crean) being away at the time. The acting Treasurer went into a great rigmarole about the featherbedding - I think that was the word he used - of Pitt and Collins Street farmers, but as his answer proceeded it became clear that he was unable or unprepared to give any definition of what constituted a genuine primary producer as distinct from those classified as Pitt or Collins Street farmers. Leaving aside for the moment whether such a definition is possible, there is a need to examine the extent of the inuflence which these Pitt Street and Collins Street farmers have exerted over the Australian economy and, in this context particularly, the economy of the primary industry sector, vis-a-vis the genuine producer, because if this is not known how can the Government make a series of decisions having very serious effects on all primary producers, not only those whom it is pleased to classify as Pitt Street or Collins Street farmers? For example, the Government claims - this is expressed in quite clear terms in the Coombs report - that the abuses of the previous concessions by Pitt and Collins Street farmers were the cause of the withdrawal or drastic reduction of those concessions. It is therefore essential to know what proportion of primary production comes from these sources; otherwise, it is impossible to come to a considered judgment on whether the withdrawal of the concessions is justified. That is the first substantial point I make.
The second is that, by its own admission, the Government either has made no attempt or is unable to get the information which would be essential for it to make a considered judgment on this issue. It is therefore selfevident that, in the absence of this information, the judgment was not a considered one. This judgment was not unique; it merely joins a long list of hasty, off-the-top-of-the-head decisions which have been made by this Government. But the great importance of this is that it will have a significant effect not only on the profitability of the operations of primary producers themselves but also on the cost of many food items to Australian consumers.
I now turn to the cost of the concessions to revenue. As I interpret the Coombs report, the total cost is estimated to be approximately $27m. But I remind the House that the Government cannot or will not provide any estimate of how this amount is divided between those who earn their living off the land and those for whom their primary producing activities are a sideline; but there is a second and equally significant deficiency in the Government’s approach to these issues. On 30 August - nearly 3 months ago - I placed a question on the notice paper to the Treasurer (Mr Crean) which consisted of 2 parts. The first part requested the detail of the depreciation rates applying to various items before and after the Budget. Since then these rates have been publicised, but I have not been officially notified of what they are through an answer to my question on notice. I think it would have been ordinary courtesy to inform me when the information was made available publicly. But that is not my main objection.
The second part of my question is the most important. It sought details of the gain to revenue by the alteration of the rates of depreciation on each item. The sections of the Act to which I have referred - sections 57aa, 57ab, 75, 76 and 82 (3) - cover a very significant range of items. In the absence of any answer after nearly 3 months, I am forced to assume that the information is not available. Certainly it cannot have been available to the Government when it made its Budget decisions; otherwise, why could I not have been provided with the answer to this question long before now - indeed, immediately the Budget was delivered in this House? So I think it is reasonable to assume that we now know that the Government was unable to distinguish between those whom it wished to penalise by the introduction of this measure - that is, the Pitt Street farmers - and those whom the Prime Minister claimed in his answer to the Leader of the Country Party it did not want to see disadvantaged - that is, in the Prime Minister’s words, the genuine producers. The Government did not even know the cost of each of its proposals. I put to the House that this is incredible.
It makes absolute nonsense of the Government’s oft repeated assertion that it would only take decisions after a most careful cost- benefit analysis of any proposals that it put forward. Here we have decisions which will have a direct effect on thousands of producers themselves and an indirect effect on millions of consumers in Australia through increased cost of production of food. The Government does not even know the basis on which it made its decision or, if it does know, it has not seen fit to inform me in answer to the question which has been on the notice paper for nearly 3 months. What a way to govern! It would be laughable if it was not so serious - serious because it has exposed the hopeless inability of this Government to appreciate, or apparently even to attempt to assess, the consequences of its policy decisions.
In my speech during the Budget debate i drew attention to the inconsistency of the Government’s approach. On the one hand, it acknowledged- that the only way to contain food price rises is to produce more food. Yet practically everything it has done since coming to government will discourage and. in some cases, remove altogether a producer’s ability to increase his productivity by sound management practices. Nothing could illustrate this better than the removal of the write-off provisions for water conservation, soil conservation and fodder storage. Expenditure on these items is absolutely central to the safe - I emphasise the word ‘safe’ - increase of stocking rates and agricultural production generally. Nothing could be more central to the conservation of the nation’s greatest asset, that is, the soil itself. How short-sighted can we get? The only conservation which will come out of these measures is storing up trouble for the Government which introduced them.
What has been the cost to revenue of the water and soil conservation concessions? We do not know, and neither did the Government when it made its decisions. The same applies to all the other individual measures. There is no possibility of drawing up a table of priorities based on the cost of each proposal balanced against its benefits. There is just a blanket withdrawal of all concessions.
Let me give another example of the gross inequities and anomalies which will result from this legislation. Let us take the case of a young man who has raised enough money to put down payment on a partly cleared block of bush land. It is not viable as an agricultural unit in the existing circumstances. But by hard work this man earns extra money, perhaps as a shearer, perhaps as a fencing contractor or by doing other similar work, and raises enough money to employ a contractor to clear the rest of his block and make it an economic proposition. I want to emphasise that a young man in that position is able to do this only if the money he pays to the contractor is fully deductible in the year in which he pays it. In other words, these are the only circumstances - it is the only way - in which he can become independent. It will become virtually impossible to do so under this legislation. It will be impossible for the battler, to use a good old Australian term, to become the owner of his own farm.
– With due respect I think you are wrong.
– I accept the Minister’s interjection and will respond to it in this way: I have just described why I think it will be impossible for the battler to own his own farm. It will not be impossible for the man who does not have to earn his living off the land to spend this extra money on fodder storage, water conservation and soil conservation. He will be able to spend this money because he does not have to earn his living off the land. His land holdings are a subsidiary to his main enterprise which may be in some field of professional endeavour. They are the people whom the Coombs report says that this legislation is aimed at. They are the only people under the conditions now being imposed who will be able to take advantage of what minimal concessions remain - the people who do not have to earn their living off the land as opposed to those who do. Sir, nothing could illustrate more clearly the damaging effects of this legislation. Nothing could illustrate more clearly that the Government just does not understand the Australian ethic. This legislation will destroy what was a realistic and achievable dream of many young Australians. It gives me no pleasure to say that, Mr Deputy Speaker, and it stands as a condemnation of the Government that that will be the result of its legislation .
– The Treasurer (Mr Crean) is unavoidably absent this evening on official duties and he asked me to make this short statement on his behalf:
I recognise that there has been a great deal of concern in the winemaking industry about the effect on the industry of paying* additional tax over the next 5 years until the valuation of stock in that industry is brought into line with the valuation of stock in other industries. Because of the special under-valuation of stock in the past, tax payments by this industry have been deferred at the expense of the other taxpayers of this nation. Let me make it clear that I have recently received messages from representatives of the industry that they realise that there was a discrimination in their favour in the old section 3U, that they recognise that this discrimination could not continue and that they realise that in no way is .mis removal of the discrimination and the payment of the deferred tax over 5 years to be construed as a substitution for the repealed wine tax.
The winemakers’ concern relates to what additional amount from that deferred tax can be absorbed each year by the industry without the individual companies, which to such a large extent give the industry its special character, being left open for takeovers or otherwise to be forced out of existence. I state clearly that I understand that concern and share it. In no way does the Government, in bringing equity to these taxation aff airs, want to be responsible for a change in the form and character of this important Australian industry. In fact some believe that the removal of this discrimination will make wine making companies less attractive for takeover. I have received representatives from the industry introduced by ‘the honourable member for Angas (Mr Giles). I have received valuable submissions from my colleagues, the Minister for Labour (Mr Clyde Cameron), the honourable member for Kingston (Dr Gun) and the Premier of South Australia, Mr Don Dunstan. In particular, I have received valuable advice from my colleague, the honourable member for Adelaide, (Mr Hurford), who has spent considerable time with officers of the Taxation Office in discussions on the technicalities of this complicated subject.
It is my belief, now shared by my coinages, that the concern has been promoted by a misunderstanding of the effect of this legislation. The Coombs report on the ‘review of the Continuing Expenditure Policies of the Previous Government, June 1973’ estimated - and published the information - that the value of the deferred tax enjoyed by this industry at 30 June 1973 was $15m. The fears of the industry have been based on an estimate of well over double this amount. With the help of the honourable member for Adelaide, we have had as much communication as possible - there are limitations due to the secrecy provisions applicable to the Taxation Office - with the wine makers. I have reason to believe that their worries have been removed, or at least reduced immeasurably. My advisers can find no reason to alter their original estimates, and I remind honourable member’s that the deferred taxes are to be eliminated over a 5-year period.
There are 2 other particular points I wish to make. Firstly, taxpayers who are placed in a difficult financial position, even though the extra tax burden is being spread over 5 years, will be treated by the taxation administration with the sympathy always afforded in .these circumstances. Secondly, in adopting a stock valuation basis for wine makers, no pitch of perfection in valuation not asked of other industries will be sought. This is a practical matter to be determined by practical and reasonable methods. Whatever consultation and co-operation is needed to settle this matter has been and will be offered by the administration. I say this because of the fear abroad, which I have already mentioned, that some arbitrary and over-theoretical standards will be imposed on the valuations. I repeat: This is simply not right and the industry will be given every consideration while over the next 5 years its taxation situation is brought equitably into line with the taxation position of the rest of the industry. If any unforeseen circumstances arise which result in the position being different from that I have outlined, the wine making industry may be assured that the situation will be reviewed sympathetically.
I repeat that I have made this statement on behalf of the Treasurer who is unavoidably absent.
– The Bills before the House this evening are extremely important. They affect most people in Australia and arise from matters which were referred to in the Budget on 21 August last. That was the first Australian Labor Party Budget for some 20-odd years. Of course, Labor undid many things which had been done over that period. The first question I ask the Government is: Where is its mandate for these moves? On many occasions when matters have been raised in this House and outside it we have heard .that the Government has a mandate. Where is its mandate for certain taxation alterations in regard to the gold mining industry in Western Australia? Did members of the Government Party go to Kalgoorlie before the election and say that this is what they would do if they were put into power on 2 December 1972? No; I heard nothing of this. The Government has no mandate for this measure. As far as I know, it was never stated that the Government would take this action. The gold mining industry in Western Australia was coming through a very difficult period; it could see fresh light because of certain things which were happening in relation to the price of gold. But, just when this was happening, the Government imposed this tax. I understand that the Government has seen the light and that it will make some alterations during the course of the debate on this measure. I certainly hope that that is correct.
As far as the wine industry is concerned - we have heard quite a lot about it tonight - what is the Government’s mandate? Considering all the speeches about this industry made in this House over the last year or two before the Government came into power, it did the very reverse of what it said it would do if it were in power. Where was there a mandate for this? Did the Government have a mandate? Practically all these measures hit at private enterprise in Australia and hit at Australians - not people overseas. Above all, of course, they hit at primary industry which was the prime target of this Budget.
The honourable member for Banks (Mr Martin) referred to the investment allowance which has been removed from the taxation schedule by these measures. This has been referred to by previous speakers but I just want to say that the honourable member for Banks referred to the investment allowance and all the advantages that it gave to industry. He referred to the big companies such as the Broken Hill Pty Co. Ltd. Does the Labor Party not realise that the bulk of people employed in this country are employed in industry and that one of the reasons for introducing the investment allowance was to increase the opportunities for business and workers in the industrial world? If one looks at the figures for the last few years to see what has happened about job opportunities in Australia, one will find that this has been very successful. But no, the Labor Party does not in any sense at any time refer to this aspect of the matter. Australia could not possibly have employed 5.5 million people, or whatever the number is, but for the policies of encouraging industry which had been followed over a number of years. The Treasury knows this perfectly well. But that incentive has completely disappeared. The honourable member for Banks said that this was only the start of what the Labor Party intended to do and that there was more to come, that the Government has the implementation of the Coombs report to complete. The honourable member for Banks said tonight that this was the first year and only the start. No doubt the people of Australia will be extremely interested to know what the rest is to be if the Government gets the opportunity. We had a special allowance for machinery in primary industry. That has been removed and this has been a severe blow to primary industry. This was another leg on which to build Australia and to earn foreign capital. Statements were made ten to fifteen years ago by the then Minister for Trade that if this country wanted to pay its way it had to export more. Certain figures were given. We reached that point in mid-1972. Not only primary industry and the people generally were benefiting from these exercises, but also the factories that were being built to produce machinery to bring about the position in which we find ourselves today. If the Government continues to destroy the incentives for private enterprise and private industry then I feel very concerned for the people of Australia.
I have mentioned that in June 1972 we started to pay our way. We have reached that position so far as our current account is concerned. That position still held till the figures for the last quarter were produced; I think the relevant figure was about $41m. But the capital account has gone. It disappeared completely, and it went in the first 3 months of this year, as I outlined to the House in a speech earlier in the year. We lost $ 1,000m over a 3-month period. In the last quarter it was down a further $18m. This situation that we are in at the moment is being held by the current account - by our primary industries in the main, and by the exporters in the mining world who have been encouraged to come to this country with their capital and with their know-how and expertise to help this country to develop and to employ those people whom we wanted to employ. The primary industries have helped very largely in that field, and to remove these taxation conces sions from all of those industries - that is, all of the industries that are in fact-
Mr DEPUTY SPEAKER (Mr Scholes)Order! It being 15 minutes past 10 p.m., in accordance with the order of the House of 1 March, I propose the question:
That the House do now adjourn.
– It is not often that I take up the time of the House by speaking in the adjournment debate, but I feel compelled to do so at this stage because of certain things that have happened in this House in recent weeks. Let me say from the outset that I accept the fact that it is a government’s right to move the gag, to use the guillotine, to take the measures and adopt the means that are necessary to complete the business before the House according to the timetable that the Government feels it should adopt to have its business finalised. I think this was admitted and accepted by the Leader of the House (Mr Daly). I think he also accepted the fact that it is the task of the Opposition to use at every opportunity the means and the methods of opposing the Government’s program and the Government’s plan. I might say that every time the Leader of the House moves the gag or uses the guillotine the seat which I occupy shudders, because this seat was occupied in the previous Parliament by the former honourable member for Sturt, who was a Labor member. I think that everyone in this House remembers the number of occasions on which the honourable member rose in wrath whenever the gag was moved or whenever he was not allowed to make a speech that he felt was necessary.
I do think that this is a matter of serious concern to the House. The Opposition has had made available to it very limited time in which to put forward its point of view. One of the great features of a democratic system of government is that there is in the Parliament an Opposition, and the duty of that Opposition is to present an alternative to the proposals put forward by the Government, to criticise those proposals and to present the point of view of the sections of the community and the electors that Opposition members have the privilege to represent. In recent times there has been, to my mind, too much pressure from the Government and from the Leader of the House in moving the gag and limiting the time made available to the Opposition.
I speak of 2 points in particular, although there are many others that could be mentioned in this regard. The 2 points that I want to make to illustrate what I am saying are related to the estimates for the Department of Defence and the estimates for the Department of Minerals and Energy. These departments are concerned with 2 matters of vital concern to the people of Australia. I do not say that the estimates for the Postmaster-General’s Department, the Prime Minister’s Department, the Parliament and the other departments are not important, but, as I say, I take these 2 departments to illustrate the point I am trying to make. They are 2 vital departments. I refer to the Department of Defence first of all. We have had 3 statements from the Minister for Defence (Mr Barnard). One was delivered somewhere back in May - I think it was 30 May - one was delivered on 22 August and the other on 20 November. This House has not been given an opportunity to debate those statements. This House and the Opposition have not been given an opportunity to put forward their points of view. It may be that, because of the number of contradictions in the Government’s defence policy, it does not want to give the Opposition time to make those contradictions obvious. I noticed in a newspaper the other day that a Royal Australian Air Force Hercules, if my memory serves me correctly, conveyed to China a bull that had been presented by the Australian Government. Perhaps that was an appropriate means of transportation because of the amount of bull in the present Government’s defence policy.
I think there was a certain amount of comment and criticism of the previous Government by .using the phrase: ‘AH the way with LBJ I think we might now coin the phrase that this Government’s policy is ‘live and die with Chou En-lai’. At this stage we have almost lowered Australia’s prestige by the attitude that we have shown towards Communist China. I am not, by any manner of means, saying that we should not have an association, that we should not trade or that we should not talk with Communist China, but there is no necessity, to my mind, for us to go as far as we have gone in our attitude to Communist China at the moment.
– We have kowtowed.
– As my colleague the honourable member for the Northern Territory said, we have kowtowed to them. Our forces must be strong. We must be sufficiently self contained to make credible our capacity to defend our country and to assist our friends. We have not been doing that. I wonder whether this is one of the major reasons why there has been this limitation of time, particularly on the Defence estimates.
Let me illustrate the point which I desire to make. I have said that I appreciate and accept that a government should be allowed to use the guillotine and to apply the gag in order to get its business through, but reasonable time should be given to the Opposition on the estimates of the Department of Minerals and Energy. Two Opposition members were given the opportunity to speak. The Minister for Minerals and Energy (Mr Connor) spoke. He had unlimited time in which to speak. I do not think that we should assess this matter on the time factor alone. Two Opposition members were given the opportunity to speak. On the Defence estimates 3 Opposition members were given the opportunity to speak. I think I have given sufficient illustration of the importance of these 2 departments to Australia. The Department of Minerals and Energy is important. At a time when we are talking about a world shortage of fuel and when there is consternation in regard to this shortage, surely the Department of Minerals and Energy is of vital importance to this country. I do not deny the importance of the other departments. Two Opposition members were given a chance to speak. The Department of Defence is another vital department to this country. Three Opposition members were given a chance to speak.
I am a little disappointed at the attitude of members of the media in the sense that this matter has not, to my mind, been given the publicity which it should have been given. In this Parliament the essence of democracy rests on the Government and the Opposition. If we forget that fact it will be a tragedy in Australia’s history. I sugest that the Leader of the House give consideration to some of the actions which he has been taking in regard to the business of the House. The Opposition is an integral part of this parliamentary system. Opposition members should be given their rights. I do not expect that all Opposition members be allowed to speak. No one would expect that. A reasonable amount of time should be allotted for each debate so that Opposition members may present their point of view and also the point of view of the people whom it is their privilege to represent.
– Tonight I shall continue the speech which I was making last night. I was at the point of seeking permission to have incorporated in Hansard the table which I have in my hand. I ask for leave to have it incorporated.
-Is leave granted? There being no objection, leave is granted. (The document read as follows) -
– I thank the House. This table is of fundamental significance with respect to the incomes referendum. I make no further comment, other than to say that the average increase in profit as shown in this table is about 21 per cent. I will not read the sectors. The table does not contain a complete set of figures. Many qualifications could be made, but the figures accurately present business conditions and the trends therein, and they accurately present the way in which shareholders are benefiting at present. The average increase in profit in the 6 major public rural companies is now 97.9 per cent. We could add the other rural companies in the same criteria. For instance, the profit of Australian Fertilisers Ltd rose by 97.8 per cent. We could also add the other figures for banking and finance. The profit of the National Bank of Australasia Ltd rose by S3 per cent, the profit of the Bank of Adelaide by 37 per cent, the profit of the Bank of New South Wales by 52 per cent and the profit of United Dominions Corporation (Australia) Ltd by 62.4 per cent. I would also like to turn to the rural sector in terms of the debt situation. I have extracted these figures from the Reserve Bank’s bulletin of October 1973. It shows the movements in deposits and advances for the rural sector. In 1970-71 rural deposits were minus $27m and rural advances were minus $4m.
In 1970-71, rural deposits were $64m and advances were minus $31m. In 1972-73, rural deposits were $2 15m and advances were $88m.
The rural debt situation which I have pointed to is an indication of confidence by farmers in the immediate future. Between 1960 and 1970, gross rural debt to major institutional sources of farm credit rose from $974m to $2,082m. However this rapid increase in debt was not sustained in 1970-71 and 1971-72. During these years of relatively low farm incomes rural debt rose only slightly to $2,098m in June 1972.
Complete information on changes in rural debt during 1972-73 is not yet available. It appears, however, that the increase in farm income has tended to restore confidence in the future of rural industry and consequently, farmers have generally been more willing to borrow and lending institutions have generally been more willing to lend to farmers. In the 12 months to July 1973, new lending to the rural sector from the major trading banks amounted to $636m compared with only $284m in the corresponding period to July 1972.
It appears that the increase in farm income has also resulted in higher levels of repayment of existing debts. Despite the increased rate of new lending, trading bank advances outstanding to rural industry declined between, January 1972 and January 1973 from $934m to $9 19m. Some other components of rural debt, including loans outstanding from pastoral finance companies and assurance societies were also lower in the early months of 1973 than in the corresponding months of 1972. The improved financial situation in the rural industries has also been reflected in farmers’ deposits with major trading banks. These deposits increased from $8 14m in January 1972 to $l,001m in January 1973. This is the first year since 1968 that farmers’ deposits with the major trading banks have exceeded their debts to these institutions. The reason that I have been so keen to incorporate so many figures into the Hansard record is that I wish to put something on the record to rebut completely the arguments that some of the Country Party candidates used for last Saturday’s New South Wales State election.
– I must draw the attention of the House and, indeed, the attention of the Australian public to what must be one of the most incredible decisions yet made by this incredible Government. The matter is the Commonwealth free milk scheme. The previous Government, alert to the importance of this well tried scheme, renewed and extended its operation until 1980. Now, this Government in a decision based apparently completely on economic grounds, intends drastically to modify the scheme from 1 January 1974. Clearly this Government has taken such a sweeping decision without regard to the health and well being of Australia’s young school children.
The modified scheme, as it will operate from 1 January, means that free milk will be provided only for children attending specified schools. These schools will be selected on a needs basis to be decided by State health authorities. For instance, in my home State of Victoria, this new scheme will save somewhere in the region of $3m annually. But can such a saving and such a blatant attack on the health and well being of school children be considered in entirely monetary terms? Can a government experiencing such difficulties in managing Australia’s economy blatantly say: OK, let us slash a few million dollars off the milk scheme’, thus leaving hundreds of thousands of Australian school children without the nutritional value that time has proved so important to their mental and physical development?
Of course, the tragedy of this scheme is that it will hit country areas in 2 ways. Firstly, it is apparent that State health authorities will have to follow the reasoning that country children with their economic standard and possibly greater access to protein from milk than, say, children in densely populated inner city areas will be the first to be able to forego the milk. This is a rationale forced on State authorities by the necessity of the Government’s clamp down. Secondly, country dairy producers will immediately lose what has become an important part of the dairying industry’s economy. No one would suggest that the scheme was financed by the Commonwealth for the benefit of the dairying industry. Nevertheless it does play an important part in the industry’s long term economy. For instance, ready availability of school milk in some areas has played an important part in helping the child acquire a taste for and an appreciation of the value of milk in later life.
I draw the attention of the House to a report on this devastating decision of the Government, by one of the world’s foremost dairying industry experts, M:: G. Loftus-Hills, who, until recently, was chief of the Division of Dairy Research at the Commonwealth Scientific and Industrial Research Organisation. The report reads:
The statistics on national food consumption show only marginal changes since 1948 when nutritionists in a national survey regarded school milk as a tremendously important aid to good national nutrition. Since then several surveys have indeed been carried out on nutritional levels in schools and these all show the continuing need for school milk.
The generally poor knowledge of nutrition in the community, the persistent commercial pressures to buy food products of relatively poor nutritional value, the common absence of both parents at work, and the increasing tendency to let the child choose foi itself, all point to the fact that even in our affluent society such a positive and pertinent step as the provision of school milk is essential if good nutrition of the young is to be assured.
I turn to the Coombs report. The section of the Coombs report on which the Budget decision is based shows a frightening absence of facts. The relevant extract is as follows:
There is substantial agreement among health authorities that continuation of the scheme cannot be justified on purely nutritional grounds and there are expert views to the effect that any benefits to the diet from a free milk scheme are likely to be minimal beyond the age of seven, even at ages up to and including 7 years of age, its general usefulness has been questioned on the basis of current income levels and on the grounds that adequate nutrition can be provided for children from other sources.
The facts are that whatever Dr Coombs says can be done is not being done. I quote from an authoritative opinion on nutrition, with supporting evidence of school surveys, which flatly contradicts Dr Coombs statements. It reads:
The Coombs report seeks additional justification for its recommendations by pointing out that the school milk system was discontinued in the UK in 1970. The report does not mention the severe criticism of that decision by nutritionists. In ‘New Scientist’, July 1971 Dr George Lynch and Dr Sylvia de la Paz of the Social Nutrition Research Unit at Queen Elizabeth College, London, report that their survey of 4,000 children showed a significant proportion malnourished and many more relying on school meals and free milk to make a poor diet adequate. In accompanying editorial comment the ‘New Scientist’ says ‘But the decision to withdraw free school milk for 7 to 11-year-olds in Britain is an outrageous sacrifice of straightforward fact and, more importantly, children’s health, to what looks like a simple but vicious principle of penny pinching*.
That is something at which this Government is good. The question could well be asked: What facts are available in Australia? In 1963 the New South Wales Department of Health carried out surveys of the daily diets of 1,000 ten-year-olds, and followed this in 1965 with a study of food eaten at school by 3,900 ten to twelve year olds in all socio-economic groups. In its conclusions, the report states:
School milk was shown to be important in providing protein which would otherwise be deficient in the diets of many children, particularly those from less affluent homes. It should continue to be made available and children encouraged to drink it regularly.
– Oh, you are not still going on, are you?
– I think that the honourable member for Blaxland probably has lacked a little milk in his diet. That virtually is the detailed report in full by Mr Loftus-Hills. We on this side of the House are well aware that in its short term of office, this Government has been eroding the benefits and standards of rural life and industry so carefully guarded by the Australian Country Party and past governments since Federation. Just how serious this Government’s attack on primary industry has been in so short a time is illustrated by a statement by prominent Australian Sir Norman Giles, chairman of Elder Smith-Goldsborough Mort Ltd, a firm favourite, I understand, with the Australian Labor Party. He observed in South Australia last week that Australia has been built on the foundations of its rural industries. He said:
Apparently these industries are to be rewarded now by the greatest financial attack on them by any government in our history.
I ask that this Government again carefully consider the implications of such drastic legislation in the light of the mounting mass of expert opinion that says school milk supplies should continue. If Government supporters in this House do not have the courage of their convictions to reject legislation proposed by the Treasurer (Mr Crean), I hope that men of conviction in another place will take more appropriate action.
– I want to deal with a couple of matters this evening, one of which was occasioned by a Press release which went out last night and a couple of Press reports as well as a comment earlier by the honourable member for Angas (Mr Giles), indicating that the Liberal Party seemed to be enjoying some sort of euphoria at the prospect of winning the seat of Robertson at the next Federal election. I have no objection to anyone claiming that they are going to knock me off at the next election. That is a perfectly legitimate charge to make. But I wish when they make their analysis of electoral figures, which is somewhat similar to their economic analysis, they would be slightly more accurate. I thought I would read for the benefit of the psephologists on the other side of the House-
– Our calculations are always conservative.
– I would imagine that the honourable member for Chisholm who is a noted political scientist will enjoy this. I thought I would read into the record the figures relating to seats contained within the electorate of Robertson at the recent State elections. There are 3 State seats in the electorate of Robertson. One is the new seat of Gosford which was carved out for the Liberal Party and which is the one remotely Liberal area in the whole electorate. The figures relating to the Gosford electorate were: Mr Brooks, Liberal, received 10,319 votes or 52.4 per cent of the vote; Mr Dunbar, Democratic Labor Party received 637 votes or 3.2 per cent of the vote; and Mr McGowan, Australian Labor Party, received 8,744 votes or 44.4 per cent of the vote. There is another State seat called Peats which is also totally within the electorate of Robertson and the figures relating to this seat were: Mr Hallett, Liberal, received 10,458 votes or 42.1 per cent of the vote; and Mr O’Connell, Labor, received 14,397 votes or 57.9 per cent of the vote. The figures for the third seat of Munmorah, two-thirds of which is in the electorate of Robertson, were as follows: Mr Connolly, DLP, received 1,262 votes or 5.1 per cent of the vote; Mr Jackson, Liberal, received 7,649 votes or 30.4 per cent of the vote; and Mr Jensen, Labor, received 16,215 votes or 64.5 per cent of the vote.
Briefly, the split up on a two-party preferred basis was: Gosford - Labor 45.5 per cent of the vote and Liberal 54.5 per cent; PeatsLabor, 57.9 per cent of the vote and Liberal 42.1 per cent; and Munmorah - Labour, 66 per cent of the vote and Liberal, 34 per cent of the vote. All I can say is that if we are going this bad in Robertson, please God I will go that bad for the next 20 years. The Labor vote was roughly 57 per cent of the total vote in Robertson, so I would ask the Leader of the Opposition (Mr Snedden) to go back to school to learn about mathematics.
I will not particularly enjoy the next matter I want to raise, lt deals with a very dear friend of mine, Mr Jack Hallam, with whom I was brought up in the town of Griffith as a young man and with whom I have stayed on a number of occasions. He is a member of the Legislative Council in the New South Wales Parliament. During the course of the recent State election campaign in the seat of Murray a proposition was put to the Labor candidate, Mr Doug Drew, in relation to Labor Party preferences. The proposition was made by the independent Australian Country Party candidate, Mr Bruce Jeffrey. It involved a request that Mr Drew allocate his preferences to Mr Jeffrey who in return would provide $1,000. Mr Drew, who had no authority to allocate preferences, very properly made a full report to the Australian Labor Party officers. Mr Drew at no time made any statement about this matter, nor did he name anyone. But widespread rumours circulated and he then stated simply that he had made a report to the Labor Party officers and that this report did not concern discussions he had with Mrs Mary Meillon, the State member for Murray.
Still the rumours persisted and some found their way into the Press. In the meantime the proposition had been judged corrupt. To clear the names of the innocent candidates the honourable member for Blaxland (Mr Keating) raised the matter in the House on 8 November. He made it clear that the allegations concerned the proposition put to Mr Drew by Mr Bruce Jeffrey and no one else. The honourable member for Murray (Mr Lloyd) issued a challenge that any evidence should be turned over to the Attorney-General (Senator Murphy) for proper action to be taken. That was a proper step for him to take. But he went on to make completely unsubstantiated allegations against Mr Drew in connection with a previous by-election.
– That is the honourable member for Murray in this place.
– That is the honourable member for Murray in the House of Representatives. It is quite incredible, if he had any evidence of wrong doing, that he did not raise it during the by-election when his candidate was defeated. The honourable member for Blaxland accepted his challenge and on 15 November he produced the evidence in this House, took legal advice on the matter and turned the evidence over to the AttorneyGeneral for proper examination.
There the matter should have rested until a proper inquiry was made. But I find that under the guise of a personal explanation the honourable member for Murray made an incredible attack on 2 members of Parliament. He said, without any evidence whatsoever, that Mr Drew had offered a bribe. Then he contradicted himself and said that it was offered on Mr Drew’s behalf by 2 State members of the Australian Labor Party, Mr Jack Hallam and Mr Lin Gordon. In Deniliquin they made an offer of $3,000 for Country Party preferences, so he said. Then he stooped to the most incredible depths to involve Mrs Laurel Drew, the wife of the Labor candidate, by saying that she had offered bribes on behalf of her husband. He then alleged that the New South Wales Country Party Leader, Sir Charles Cutler, was a witness to all this.
The attack on 2 outstanding members of Parliament without a tittle of supporting evidence is bad enough, but to go into the gutter to attack the wife of a man in public life is to strike an all time low in Australian politics. The documented taped evidence against Mr Jeffrey is in the hands of the Attorney-General. Legal opinion has already been given that it is an open and shut case of bribery and that even if Mr Jeffrey had won the seat it would have been stripped from him by the Court of Disputed Returns. But the reckless allegations made by the honourable member for Murray are in an entirely different context. He has attacked a widely respected wife and mother, her husband and 2 members of the New South Wales Parliament who enjoy reputations second to none. Mr Lin Gordon, member for Murrumbidgee, has categorised the attack as malicious political lies. Mr Jack Hallam, MLC, has described the charges as the product of a totally dishonest and cowardly man. They invite the honourable member for Murray to do the decent thing and apologise. But if he persists in this baseless charge he should have the courage and honour to produce his evidence, take it to the proper authorities and repeat his charges outside the Parliament. Unless he can produce this evidence and unless he has the honesty to repeat his charges outside the Parliament so that they can be tested in a court of law I can only describe his actions as dishonourable and cowardly. Let him rise with an apology before it is too late for him to do so.
– How about your evidence and the tape recording? Where did you get that from?
– Yes, we have got it. We have handed it over to the Attorney-General.
– I am surprised that the honourable member for Robertson (Mr Cohen) has raised this matter again. At no time did I raise it. The matter was raised by the honourable member for Blaxland (Mr Keating). On both occasions when he raised the matter I replied because I believe that if there has been gutter politics and muck spreading, it was started by the honourable member for Blaxland, who made a character assassination on a person who is not here and has had no chance to defend his honour. If anybody talks about cowardly attacks, let us look at where this matter started and where it has persisted.
One other point I wish to make is that I have been pleasantly surprised by the number of Labor Party members of this Parliament who have come to me privately and have dissociated themselves from the remarks of the honourable member for Blaxland. They have pointed out that no political party is in any position to point the finger at any other political party, and I think I have demonstrated that fairly clearly in this whole episode. They said that such an attack was personally repugant to them, and they also raised the question of the validity of a tape recording. It is still disputed whether such a tape recording exists. If it exists it is completely unsubstantiated.
I think the two other points that these Labor members of Parliament made are very interesting. The first is that a tape recording is inadmissible in evidence, and any talk of referring the matter to the Attorney-General (Senator Murphy) is hogwash, and I think ‘hogwash’ is the correct term for the gutter politics that have been used in this instance. The other point is that this happened at a time when Senator Murphy is making great statements about laws to protect the invasion of privacy through such gadgets as electronic listening devices and tape recorders. On the one hand the Labor Party is saying that it is the protector of privacy, and on the other hand, if this happened, if this conversation was tape recorded - and it has been denied that it happened - it is a breach of all the ethical rules of privacy in this country. Those statements were made by Labor members of this House.
– Do not tell lies.
– Order! The honourable member must withdraw that remark.
– I will withdraw it if honourable members opposite do not tell untruths.
– Order! That is most unparliamentary.
– Has he withdrawn that remark, Mr Speaker?
– Yes, he has.
– Thank you.
– Why does he not stand up and do it instead of lying back there like a log?
– Order! Do not exacerbate the position. The honourable member has already withdrawn the remark.
– The honourable member for Blaxland made these 2 attacks. He is the one who started it, he is the one who spread the mud in a cowardly character assassination in the events that led up to the State election. If one asks who does this sort of thing, I believe that it is the Labor Government. The members of the Labor Party are the last people who can talk about this matter because one only has to recollect what the former honourable member for Shortland said in this place about the tactics of the New South Wales Labor Party in such matters. By speaking under cover of parliamentary privilege the honourable member for Blaxland has allowed the person who has been attacked no chance to reply. The honourable member has allowed alarmist headings to be placed in newspapers in the electorate concerned in an endeavour, I believe, dishonestly to affect the outcome of the election in that seat.
If one wants to talk about charges, the only charges that one can refer to in the sense of breaking some guidelines or rules are those relating to preference selling, not to preference buying, because on 2 occasions - ‘both in a by-election and in a general election - the Labor candidate wanted to sell his preferences not only to the independent Country Party candidate but to other candidates as well.
I wish now to refer to some information that I have obtained. On Friday, 21 September last at approximately 9.30 a.m. in Napier Street, Deniliquin, between the Labor Party and Country Party offices which are both in that street, Mr Jack Hallam, M.L.C. and Mr Lin Gordon, M.L.A. approached Mr Tim Fisher, M.L.A. and Mr Bruce Jeffrey, the endorsed Country Party candidate, seeking an arrangement regarding the by-election to be held on 6 October. Mr Jeffrey asked Mr Hallam: ‘What is meant by an arrangement? Our preferences will go to the Liberals and the Liberal Party preferences will go to the Country Party, Mr Hallam said: ‘The other Party is offering a good deal. What can your Party offer?’ As I said the other day, Sir Charles Cutler was further down on the other side of Napier Street. Mr Jeffrey and Mr Fisher said that they could make no comment and that they would talk to Sir Charles Cutler. Sir Charles Cutler said: ‘Definitely, no. We will have nothing to do with any deal whatsoever’. This was then reported to Messrs Hallam and Gordon.
If one wants to dispute whether these people were in Deniliquin one should read the articles in the Mumimbidgee papers where one will see references to these gentlemen being there at the time. In the election, I repeat, once again Mr Drew was offering his preferences to the highest bidder, or so he claimed. He stated that as the price paid in the by-election was $2,000, the price would have to be higher. So much for the talk of whether it was preference buying or preference selling. If any charges are made they must be in relation to preference selling.
Also there is a question of the breach of the Australian Broadcasting Act by Labor Party supporters. On Thursday morning prior to the State election, after the closing time for all political comment, on the 8 a.m. news on 2QN, through the assistance of Labor Party people, these allegations that have been made in Parliament were broadcast in contravention of the Broadcasting Act.
I do not enjoy doing this. I did not start it. It is personally repugnant to me. But I want to make one thing perfectly clear: Nobody is going to make character assassination speeches in this place against any personal friend of mine and get away with it. I inform anybody on the other side of the House who wishes to continue this particular episode that I have considerably more information of interest to this Parliament that can be revealed. I say to the honourable gentlemen opposite: Give up. You have started a dirty business. Let us leave it there. If you want to continue with the battle, you will have somebody to fight.
– The honourable member for Murray (Mr Lloyd) talks about character assassinations. He has just put in 3 tonight. He mentioned the State member for Mumimbidgee, Mr Jack Hallam, M.L.C. He is the gentleman who the honourable member for Murray said offered preferences. There was no talk of money. Everybody around the countryside offers preferences, but not for money. The fact of the matter is that the Country Party candidate is recorded on the tape, which is now with the Attorney-General (Senator Murphy), as having offered $1,000. What I was talking about to the Parliament was an open and shut case of bribery by the Country Party which would stoop to anything to win a ballot anywhere. It did so to try to defeat the Liberal Party candidate in the State seat of Murray.
The honourable member for Murray slinks into this House on a personal explanation and defames 2 people without a shred of evidence. He just says that he has information that bribes were offered when in fact he knows that he has no evidence. He could not produce a scintilla of evidence. Yet what I produced I took to the Attorney-General’s Department. I have also said it would be produced in the New South Wales Court of Disputed Returns, should this independent Country Party candidate win. The honourable member for
Murray says he was not a Country Party candidate, yet he is defending this so-called independent. He says: ‘Oh, no, he is not one of ours’. But he rises every time to defend him. He said he was one of his personal friends.
The fact of the matter is that the Country Party rattled out an agreement with the Liberal Party, put the knife in the back of the Liberal Party and then tried to prostitute the electorate by offering $1,000 for the preferences of the Australian Labor Party. But the honourable member for Murray does not accept that and fight on that basis. He makes character assassinations of 2 people but does not have evidence such as I have offered. He is not taking the matter to the Court of Disputed Returns. The honourable member would not be game to say it out in King’s Hall. There is no chance of that happening, because he knows that if he did he would have a writ right around his ears. (Honourable members interjecting) -
– Order! I intend to get silence no matter what the consequences are.
– The honourable member knows that he would have a writ facing him. He has not the intestinal fortitude to do that; but he stood up on a personal explanation, abused that right and named these 2 people to whom I have referred. Not only that, but he named the wife of one of the candidates. How low can one get! He came in here and put in a man’s wife by saying that she offered something. What comeback has she got? She has not the comeback that Mr Gordon and Mr Hallam have. They can take the matter up in the State Parliament. But what chance has the candidate’s wife got? That is the depth of degradation to which the Country Party will stoop on any occasion in order to win any ballot anywhere. I propose to encourage my Party at the next election to make certain-
– Mr Speaker, I raise a point of order.
– This is a frivolous point of order, Mr Speaker. I want you to take action against-
-Order! What is the point of order?
– I ask you, Mr Speaker, to direct the honourable member for Blaxland to withdraw the insinuating remarks against the members of the Country Party wherein he said: “They would stoop to anything*.
– No point of order is involved.
– And against me-
-Order! Unless the honourable member for Blaxland specifies a member of the Country Party, he is quite in order.
– As I was saying, the Country Party will do anything. What should happen in the future is that whenever our Party’s preferences are to be distributed they ought to go to the other major party, tha Liberal Party, so as to cut this agrarian pressure group, this cheap chiselling rump, out of this place, because the quicker these hillbillies and racketeers are taken from the national Parliament the better. The honourable member for Murray said that Sir Charles Cutler, the Deputy Premier in New South Wales, also was involved in this discussion. But the candidate to whom I have referred apparently is an Independent candidate. This illustrates how independent-
– Mr Speaker, I raise a point of order. I referred to the by-election, when Mr Jeffrey was the official Country Party candidate
-Order! No point of order is involved. A point of order involves only the Standing Orders.
– Mr Speaker, it is about time you named people who take frivolous points of order.
-Order! The honourable gentleman will not reflect on the Chair.
– When I raised this matter 2 weeks ago I was not able, in two 10-minute segments, to speak, because points of order were taken. But none of them were relevant, they were not points of order at all. The fact is that this individual - I would like to give him a more explicit name than that but-
– Mr Speaker, I think he should observe parliamentary decorum and refrain from pointing a finger at me and referring to me as ‘this individual’.
– No personal reflections are allowed. I ask the honourable member for Blaxland to contain himself and not to point at people and call them individuals.
– Well, what else is he? He is an individual.
– I was about to say heeler’, but probably it is not parliamentary; so I did not use that word. The point is that the honourable member came into this place and character assassinated a couple of people; and then he says that he did not raise the muck. I was not raising muck. I was letting the people of New South Wales know that the Country Party was prepared to stoop to corruption and bribery to win seats and to hold their seats in the New South Wales State Parliament. We offered evidence to be taken to the Commonwealth Attorney-General or the Court of Disputed Returns in New South Wales.
Against this there has been, without a scintilla of evidence, this shabby, low-heel attack by the honourable member for Murray in this place against a candidate’s wife and 2 members of the New South Wales Parliament who cannot answer back at this time because that Parliament is not in session. Now the honourable member has the hide to get up and say it again. All I say is: Let him say it outside this place. Let him have the gumption to say it outside this place and see what happens to him. He knows damn well that it he does he will have a writ around his ears in 2 seconds. What I have said indicates the low-heel shabby tactics that the Country Party will adopt at any time and that it will go to any lengths to gain shabby political mileage, whether it is in the State of New South Wales or in the Commonwealth generally. The 2 major parties in Australia, the Liberal Party and the Australian Labor Party, should do everything they can to ensure that this agrarian pressure group, this rump-1 -
-Order! It being 11 o’clock, the House stands adjourned until 2 p.m. on Monday, 26 November 1973.
House adjourned at 11 p.m.
The following answers to questions upon notice were circulated:
asked the Minister for Exter nal Territories, upon notice:
– The answer to the right honourable member’s question is as follows:
Taxation: Pioneering Industries fin Northern Australia (Question No. 1021)
asked the Minister for Northern
Development, upon notice:
– The answer to the honourable member’s question is as follows:
asked the Minister for Supply, upon notice:
– The answer to the honourable member’s question is as follows:
The Company has been advised through the Australian Embassy in Lisbon that the Australian Government would not permit the sale of the military version of the Nomad aircraft to the Portuguese Air Force. Such a sale would be inconsistent with the Australian Government’s support for the United Nations resolution 2918 of 14 November 1972. However, should the company be interested in sales of the civil version of the Nomad aircraft for non-military purposes in Portugal, the Government Aircraft Factories would be pleased to consider their request.
No further advice has been received from the Company.
asked the Minister representing the Minister for Aboriginal Affairs, upon notice:
Will the Minister provide a list of the interdepartmental committees which have been established since 2 December 1972, of which officers of the Department of Aboriginal Affairs are members.
– The Minister for Aboriginal Affairs has provided the following answer to the honourable member’s question:
On 20 September 1973, my colleague, the Prime Minister, informed the right honourable gentleman in reply to a question without notice about interdepartmental committees that, if he wished to know the composition and function of any particular interdepartmental committee, and for what period of time it had been active, the Prime Minister would be happy to provide him with that information.
If the right honourable gentleman wishes to have information about a particular committee on which my department is represented, I will assist him as far as possible having regard to the Prime Minister’s answer to Questions 964 and 1057.
asked the Minister for Services and Property, upon notice:
– The answer to the right honourable member’s question is as follows:
If the right honourable gentleman is interested in a particular aspect of accommodation occupied by a department I will examine the matter to see what information can he provided.
Aircraft Noise (Question No. 1172)
asked the Minister for Civil
Aviation, upon notice:
– The answer to the honourable member’s question is as follows:
Aircraft Noise (Question No. 1173)
asked the Minister for Civil
Aviation, upon notice:
– The answer to the honourable member’s question is as follows:
asked the Prime Minister, upon notice:
– The answer to the honourable member’s question is as follows:
Cite as: Australia, House of Representatives, Debates, 22 November 1973, viewed 22 October 2017, <http://historichansard.net/hofreps/1973/19731122_reps_28_hor87/>.