House of Representatives
26 February 1976

30th Parliament · 1st Session

  1. House of Representatives
  2. 30th Parliament
  3. 1976

Mr SPEAKER (Rt Hon. B. M. Snedden, Q.C.) took the chair at 10.30 a.m., and read prayers.

page 309

DEPUTY CHAIRMEN OF COMMITTEES

Mr SPEAKER:

– Pursuant to standing order 18,I lay on the table my warrant nominating Mr Armitage, Dr Jenkins and Mr Martin to act as Deputy Chairmen of Committees when requested so to do by the Chairman of Committees.

page 309

PETITIONS

The CLERK-Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers:

Metric System

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth-

That the plan to obliterate the traditional weights and measures of this country is causing and will cause widespread inconvenience, confusion, expense and distress.

That there is no certainty any significant benefits or indeed any benefits at all will follow the use of the new weights and measures.

That the traditional weights and measures are eminently satisfactory.

Your petitioners therefor pray:

That the Metric Conversion Act be repealed, and that the Government take urgent steps to cause traditional and familiar units to be restored to those areas where the greatest inconvenience and distress are occurring, that is to say, in meteorology, in road distances, in sport, in the building and allied trades, in the printing trade, and in retail trade.

And your petitioners as in duty bound will ever pray. by Mr Staley and Mr Jarman.

Petitions received.

Income Tax: Land and Water Rates

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia repsectfully showeth: That the undersigned persons believe that-

The $300 limit on income tax deductibility in respect of personal residential land and water rates is unrealistic and is a discriminatory income tax penalty.

Your petitioners therefore humbly pray that the Government will take steps to see that the aforesaid limitation is removed entirely or substantially increased.

And your petitioners as in duty bound will ever pray. by Mr Connolly.

Petition received.

Television Service for Pannawonica, Western Australia

The Honourable the Speaker and Members of the House of Representatives in Parliament assembled.

The humble petition of 203 electors and residents over the age of 18 years in the division of Kalgoorlie sub-division of Gascoyne requests that, as Cliffs Robe River Iron Associates have indicated to Telecom Australia their preparedness to make the required capital contribution for the provision of a television service to the town of Pannawonica, urgent action be taken to provide such service. by Mr Cotter.

Petition received.

Banyena Post Office

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of the Banyena district respectfully showeth:

That we wish to protest most vigourously at the proposed closure of the Banyena Post Office.

This closure will cause considerable inconvenience to all residents in the area in that the nearest Post Office in one direction would be 10 miles distant from the Banyena settlement, and, in the swing of the perimeter, 19 miles, 16 miles and 1 3 miles from other Post Offices in the area.

This rural community plays an important part in the economy of the nation, and the petitioners therefore humbly pray that the proposed closure will not be implemented. by Mr King.

Petition received.

Television and Radio Licence Fees; Medibank and Pharmaceutical Benefits

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled.

The petition of the undersigned citizens of Australia respectfully showeth-

That the new Government during the recent election campaign, promised lower taxation and more money in people’s pockets.

Your petitioners therefore humbly pray-

That the House of Representatives will take immediate steps to prevent the introduction of television and radio licence fees, the imposition of a tax levy for Medibank and the introduction of higher charges for drugs dispensed under the Pharmaceutical Benefits Scheme.

And your petitioners as in duty bound will ever pray. by Dr Klugman.

Petition received.

Cadet Corps

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 three service cadet forces have great value in the development of the youth of Australia.

That the disbanding of the cadet forces will disperse accumulated expertise and interest of those involved, and in some cases negate the efforts of many people over many years.

Your petitioners therefore humbly pray that the Government will reconsider its decision and that the Government will reinstate the cadet forces.

And your petitioners as in duty bound will ever pray. by Mr McVeigh.

Petition received.

Income Tax

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 existence of a system of double taxation of personal incomes whereby both the Australian Government and State Governments had the power to vary personal income taxes would mean that taxpayers who worked in more than one State in any year would-

  1. be faced with complicated variations in his or her personal income taxes between States; and
  2. find that real after-tax wages for the same job would vary from State to State even when gross wages were advertised as being the same; and
  3. require citizens to maintain records of income earned in each State.

Your petitioners therefore humbly pray that a system of double income tax on personal incomes be not reintroduced.

And your petitioners as in duty bound will ever pray. by Mr Morris.

Petition received.

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QUESTION

QUESTIONS WITHOUT NOTICE

page 310

QUESTION

POTATOES

Mr YOUNG:
PORT ADELAIDE, SOUTH AUSTRALIA

-I draw the attention of the Minister for Business and Consumer Affairs to the evidence given at an Industries Assistance Commission hearing on the potato industry in Sydney on 16 and 17 February by the Potato Industry Inquiry Committee, a Victorian Government body, in which it was stated that approximately half of Australia’s normal requirements of potatoes, namely 25 000 tonnes, was being imported into Australia and that prices for local produce had plummeted so badly that in Victoria alone 20 000 tonnes had been left in the ground. I ask the Minister: How can he reconcile this evidence with the January food price index in which the major contributor to the overall 3 per cent increase was the enormous increase in the price of potatoes? Further, if the benefit of the increased prices is not going to the growers, can he inform the House exactly who is getting the rake-off?

Mr HOWARD:
BENNELONG, NEW SOUTH WALES · LP

– I am not in a position to reply in detail to the honourable gentleman’s question.

I will have inquiries made and I will give him a more detailed reply later today.

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QUESTION

CATTLE

Mr DRUMMOND:
FORREST, WESTERN AUSTRALIA

-I address my question to the Minister for Transport who would be aware that there is a huge potential market for the shipment by air of live and chilled cattle from Western Australia to the Gulf countries. Is is a fact that Qantas Airways Ltd is endeavouring to dispose of a Boeing 707 aircraft? If so, has the possibility of using that aircraft for this trade been investigated?

Mr NIXON:
Minister for Transport · GIPPSLAND, VICTORIA · LP

– I am very pleased to hear of the potential of the trade that the honourable member mentioned. The use of a Boeing 707 in such a trade would be a commercial decision. I am sure that Qantas would be interested in anything that would be attractive to the fleet. I will raise the question with Qantas to see whether there is some potential in its entering a market of this nature. Consideration would need to be given to whether the economics of air freights are better that the economics of sea freight. I know there are prospects at the moment of setting up a regular trade between that part of the world and Australia by a shipping company. These matters will be taken into account, I have no doubt, by Qantas when it considers the question.

page 310

QUESTION

NATIONAL ESTATE

Mr UREN:
REID, NEW SOUTH WALES

– My question is directed to the Prime Minister. He would be aware of the inquiry into the national estate which was chaired by Mr Justice Hope and that the Hope Committee recommended the setting up of a heritage commission to protect and enhance the national estate. Legislation for the Australian Heritage Commission was introduced into both Houses and passed by both Houses. Does the Government intend to abandon the Heritage Commission and return to the bulldozer mentality that prevailed under the Liberal-Country Party Government between 1950 and 1972?

Mr MALCOLM FRASER:
Prime Minister · WANNON, VICTORIA · LP

-This Government is concerned for the national estate and for the objectives of the Heritage Commission. Originally, as was endemic under the previous Administration, there were somewhat extravagant proposals concerning the nature of the Commission and the way in which it might operate. The Minister for Environment, Housing and Community Development has been examining in recent times the proper way of establishing the objectives of the Heritage Commission in the most economical and sensible manner. There is no point in having a large bureaucracy for bureaucracy’s sake. The honourable gentleman can rest assured that the objectives of the Commission will certainly be maintained and encouraged by the Government.

page 311

QUESTION

TELEPHONE INSTALLATIONS

Mr GILLARD:
MACQUARIE, NEW SOUTH WALES

– In view of the recent union action in regard to the installation and repair of business telephones, will the Minister for Post and Telecommunications advise what action has been taken or can be taken to overcome the serious problem which now exists for the installation and repair of many business telephones, not only within the electorate of Macquarie but also throughout Australia?

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

– The ban affected about 17 000 telephone installations, 5000 of them through faults. It caused tremendous inconvenience all over Australia. In my discussions with the Australian Telecommunications Commission I have not been able to get a definite date as to when the backlog will be sorted out because the ban was lifted only on Monday. I am assured that Telecom is making every effort particularly to fix faults affecting business and commerce, and to do everything possible to reduce any inconvenience caused.

page 311

QUESTION

OPINION ON CONTEMPT APPLICATION

Mr E G Whitlam:
WERRIWA, NEW SOUTH WALES · ALP

– I ask the AttorneyGeneral a question. He will recall denying to the Deputy Leader of the Opposition on Tuesday that his Department had been requested to prepare an opinion on a contempt application which had been before the Supreme Court of the Australian Capital Territory that day and the day before and saying that therefore it was unnecessary for him to state whether there had been any discussion on this subject between himself and the honourable member for Curtin. Since the transcript of proceedings on Monday and the reasons for judgment on Tuesday record that the counsel for the honourable member had had certain conversations with the Attorney-General and the Solicitor-General, each of whom was aware of what was being done- I am sure that the Attorney will recall the quotation- I ask the Attorney why he did not frankly reveal in his answer to my deputy that he had in fact discussed the matter with the counsel for the honourable member.

Mr ELLICOTT:
Attorney-General · WENTWORTH, NEW SOUTH WALES · LP

– The answer to the question is this: When I answered the Deputy Leader of the Opposition on Tuesday I understood his question to be framed on the basis that advice had been sought from my Department and that the other questions flowed from that. On that basis I did not answer the rest of his question. That is the explanation I gave, that is the explanation I give, and that is the answer to the honourable member’s question.

page 311

QUESTION

DEPARTMENT OF REPATRIATION

Mr BRADFIELD:
BARTON, NEW SOUTH WALES

– My question is directed to the Minister for Repatriation. Has the Department of Repatriation, as part of the Government’s cutbacks in spending, closed any of its institutions? If so, which institutions are involved and what arrangements have been made for the welfare of the patients and staff at those institutions?

Mr NEWMAN:
Minister for Repatriation · BASS, TASMANIA · LP

– We have conducted a complete review of all hospitals and auxiliary hospitals run by the Department of Repatriation. It has been decided as a result of that investigation to close one auxiliary hospital, the Birralee hospital in South Australia. This hospital was reopened in December 1974, I think, to accommodate long term chronic patients. The aim was to hospitalise 45 patients at Birralee. Because of serious difficulties with the site and difficulties in recruiting staff to the hospital we have been able to accommodate only 28 patients and the average occupancy has been only about twenty-five. There have also been serious difficulties with maintenance costs and minor new works. All in all the cost of keeping a patient there is about $16,000. For these reasons we have decided to close Birralee.

Mr Bryant:

– You cost more than that.

Mr NEWMAN:

– I think those are pretty important facts and certainly substantiate the closing of this hospital. As to the staff and patients, all the staff will be offered positions in the general hospital at Daw Park. If they want them they can have them. The patients now at Birralee will be placed either at Daw Park or in other nursing homes in the State.

page 311

QUESTION

CRUDE OIL PRICES

Mr KEATING:
BLAXLAND, NEW SOUTH WALES

– I ask a question of the Minister for National Resources. Has Esso-BHP approached the Minister in either a formal of informal manner since the election and sought a further increase in the domestic price of crude oil? Did Esso-BHP argue that without a further increase in price development of the Flounder well in Bass Strait could not go ahead?

Mr ANTHONY:
Deputy Prime Minister · RICHMOND, NEW SOUTH WALES · NCP/NP

– The answer is yes. This and other oil companies have been to see me and have pointed out to me that it is impossible to develop new fields while the present price of crude oil remains. My reply to these people has been that the matter will be considered by the Government.

page 312

QUESTION

SUPERPHOSPHATE BOUNTY

Mr KING:
WIMMERA, VICTORIA

– I direct a question to the Minister for Primary Industry. He will recall representations from a number of Government supporters regarding anomalies created by the reintroduction of the superphosphate bounty. Has he had an opportunity of examining the issues involved? If so, with what results?

Mr SINCLAIR:
Minister for Primary Industry · NEW ENGLAND, NEW SOUTH WALES · NCP/NP

-There has been a long established practice in many States of very forward orders being placed for the supply of superphosphate. This is particularly so in Western Australia and members from that State have identified to the Government’s satisfaction problems that ensue from the superphosphate bounty being available only on orders placed after 1 1 February. As a result the Government has accepted the submissions by the honourable member and many others who have found that there has been a serious disruption due to the bounty being available only in respect of orders placed. The bounty will henceforth be available on sales made either directly by manufacturers or by dealers to users on or after 1 1 February.

page 312

QUESTION

SCHOOLS COMMISSION

Dr J F Cairns:
LALOR, VICTORIA · ALP

-Does the Prime Minister know of reports from apparently reliable sources that, as a result of the $9m cut in the budget of the Schools Commission, at least 30 child care centres in Victoria will have to close and that they could be kept open with additional funds of $1.5m? Can he say whether those facts are true? If so, how many child care centres in Australia as a whole will have to be closed and what would be necessary to keep them going? Will he guarantee to the House and to the people that sufficient funds will be provided to keep these child care centres operating?

Mr MALCOLM FRASER:
LP

– I have not been advised of the alleged fact contained in the honourable gentleman’s question but I will guarantee to examine the matter, obtain a report and let the House know.

page 312

QUESTION

SURVEILLANCE OF COASTLINE

Dr RICHARDSON:
TANGNEY, WESTERN AUSTRALIA

-My question is directed to the Minister for Defence. In view of the changing nature of our defence posture and major new developments in naval weaponry, is there a strong case for rapidly ordering a new fleet of patrol boats with long-range detection systems for surveillance of our north-west and northern coastlines?

Mr KILLEN:
Minister for Defence · MORETON, QUEENSLAND · LP

– I could give the honourable gentleman a very short answer and say: ‘emphatically yes’. There is a very substantial case for ordering more patrol boats. I hope that the honourable gentleman’s question will encourage a wider and, if I may say with respect, a better informed public debate about an issue which is growing perceptibly in intensity. Without anticipating the outcome of the Law of the Sea Conference, if that Conference should confer upon littoral states an exclusive resources zone of some 200 miles, the problem for this country will be very significant indeed. The Government has received tenders for a patrol boat definition study from 11 tenderers. They are currently being considered. I am seeking ways and means of accelerating the examination of the tenders. 1 hope that within the next few months we may have moved perceptibly towards a position where a decision can be made as to the type of patrol boat.

page 312

QUESTION

SOFTWOODS

Dr JENKINS:
SCULLIN, VICTORIA

– My question is addressed to the Minister for Primary Industry. Has a decision been reached to continue the softwoods agreement with the States after the legislation expires this year in either an interim or a more permanent manner? If not, why not, and how will this affect future supplies of softwoods in Australia and employment in country areas? If so, in any such agreement are environmental safeguards included?

Mr SINCLAIR:
NCP/NP

– The question of the extension of the softwoods agreement with the States has been under very close consideration. A number of problems emerge from the practice that has been established. One of them is that, whereas there is tremendous opportunity for private on-farm establishment of plantations, this has not been encouraged to any degree. The Government wishes to see whether this could be encouraged to a greater extent than has been the case. Equally there are ecological problems to which the honourable member adverted in his question. These are matters which will be taken into account when the question of the extension of the softwoods agreement is finally concluded. At this stage no final decision has been reached. There is a need to re-assess the availability of softwoods, as is obvious from the Borrie report and forward projections of Australia’s population growth.

page 313

QUESTION

UNEMPLOYMENT BENEFITS: WORK TEST

Mr FALCONER:
CASEY, VICTORIA

– I address my question to the Minister for Employment and Industrial Relations. I refer to the new work test which is applied to people receiving unemployment benefits. Can the Minister say what has been the result of the new work test as it has been applied by officers of the Commonwealth Employment Service? Have there been many complaints about the operation of the work test? Can the Minister outline the avenue of appeal open to any recipient of unemployment benefits who feels that he or she has been disadvantaged by the interpretation of the work test by an officer of the Commonwealth Employment Service?

Mr STREET:
Minister Assisting the Prime Minister in Public Service Matters · CORANGAMITE, VICTORIA · LP

– The question of the payment of unemployment benefit is now of great economic significance. The amount being paid is currently running at the rate of $500m a year. The Government therefore last month took action to try to prevent abuses of this benefit without in any way affecting the rights of those genuinely seeking work. The Government took that action in 3 specific areas. Firstly, to try to overcome the problem of multiple registrations, that is, people who claim benefits from more than one office, we now require proof of identity. Secondly, unemployment benefit will not normally be available to people who deliberately make themselves unacceptable to employers. I emphasise that word ‘employers’ because there has been some suggestion that officers of the Commonwealth Employment Service make this judgment. They do not, of course; it is made by the employers. Thirdly, there are people who deliberately choose not to move from areas where employment prospects are poor to areas where they are offered a job or on the other hand, people who deliberately move to an area where they know jobs will not be available. Action has been taken in all these areas to stop abuse of the system. The guidelines have been in operation only since last month and it is too early yet to be definite about their results. However, there are encouraging signs of a reduction in the number of people receiving unemployment benefits.

I cannot be precise about the reason for the drop. The new guidelines have undoubtedly been an influence, so too perhaps has been the absorption of school leavers into the work force. This will become clearer as unemployment figures are released. The February figures should be available, I hope, at the end of next week. So far as my Department is aware, no complaints of any significance have been received about the operation of the guidelines. The honourable member also asked what appeal provisions are available to people whose unemployment benefit application has been terminated or rejected. Such people are notified in writing of the reason for the termination or rejection and they are then able to appeal to the social security appeals tribunal in their State. These tribunals normally consist of two independent members, usually a lawyer and somebody qualified in the social welfare field, and a person seconded from but not acting for the Department of Social Security. I emphasise that the new guidelines in no way impair the rights and protection of those genuinely seeking work.

page 313

QUESTION

CORPORATIONS AND SECURITIES INDUSTRY LEGISLATION

Mr STEWART:
LANG, NEW SOUTH WALES

– My question is addressed to the honourable member for Kingsford-Smith and relates to the notice standing in his name for general business Thursday No. 4 concerning the presentation of a Bill relating to corporations and the securities industry. Is the honourable member aware of the great loss and suffering caused to many Australians by the spectacular failures of financial corporations and partnerships engaged in the securities industry? In view of the fact that a person who incurs a debt as a member of a partnership remains liable for that debt after he has left the partnership, and that directors of corporations which are creditors of failed partnerships have a duty to their shareholders to pursue all persons who were partners in the partnership at the time the debt was incurred to seek satisfaction of that debt, I ask whether the honourable member’s Bill will ensure that white collar crime of this type would be more difficult to perpetrate in the future and that persons who deceive the public in security transactions are brought to justice.

Mr LIONEL BOWEN:
KINGSFORD-SMITH, NEW SOUTH WALES

-This is a very good question. It relates to the great gap we now have by not having any legislation to control corporations, particularly those dealing in securities. Other federations in the world have such legislation. It is significant that when we attempted to introduce this legislation on a previous occasion it was rejected by the present Government when in Opposition It is on record that it was introduced following a very extensive Senate committee investigation which clearly showed that in many cases- I will name one, Patrick Partners- people made profits and fortunes. I want to submit that on that occasion the word ‘profit’ was a dirty word; profits should not have been made. Many people in this House have constituents who are now saying: What happened to the money that they gave -

Mr SPEAKER:

-Order! The honourable gentleman is entitled to respond to the question in terms that will be used in the legislation. At this stage he is not entitled to argue about the need for the legislation. He has given notice in relation to it. When the matter on notice is called on he will be able to present the arguments in principle.

Mr LIONEL BOWEN:

-Very well, Mr Speaker, but you will notice that I was asked whether the legislation will protect people in that fashion. I want to make the submission that it will. I want to indicate how it can do it. On that basis -

Mr SPEAKER:

-You have persuaded me that your intention is that it shall. That answer has been given. I am ruling that you are not entitled now to proceed to give the reasons for stating that it shall protect business.

Mr LIONEL BOWEN:

-No, Mr Speaker, but I want to indicate -

Mr Scholes:

– I take a point of order, Mr Speaker. Standing order 145 provides that the answer to a question shall be relevant to the question. The ruling has always been given in this House- unless you intend to change that ruling; consistency must be applied- that provided the answer given by a Minister or the person answering the question is relevant to the question, the answer is in order. There are restrictions on questions which can be asked; there are almost no restrictions on the answers given to questions. That has been a bone of contention for some time, but I think it is a matter for the Standing Orders Committee and not a matter for ruling. Both my predecessor and I asked that Committee for guidance on that matter and never got it. My point of order is that you cannot rule that a non-Minister who is allowed to answer a question does so under standing orders different from those applying to a Minister.

Mr SPEAKER:

– I am ready to rule on the point made by the honourable member for Corio. If the Leader of the House (Mr Sinclair) or the honourable member for Angas (Mr Giles) have subsequent points of order to raise I will call upon them to make their points of order. The honourable member for Corio indicated his view that the answer to a question ought to be relevant to the question. He is certainly right in stating that point of view, and I uphold that part of his point of order. But that is not the issue. The issue here is how far the honourable member for

Kingsford-Smith can go in explaining what are his intentions in relation to a Bill before the Bill is presented. At this stage he simply has a notice on the notice paper and nothing more than that. I am ruling that he cannot give the arguments he will present in support of the Bill when notice No. 4 is called on. All he can do at this stage is indicate whether it is his intention that the Bill, when it is introduced on General Business day No. 4, will protect the persons referred to in the question. I so rule.

Coming to the second point raised by the honourable member for Corio, I draw his attention to the fact that I know that standing order 145 says that an answer shall be relevant to the question. However, I would also remind the honourable gentleman that the last 2 lines of standing order 144 state:

Questions cannot anticipate discussion upon an order of the day or other matter.

If I permitted the honourable member for Kingsford-Smith to respond to the question in the manner in which he intended to respond, he would be anticipating the discussion. The third point I make is that, as the honourable member for Corio pointed out, he and his predecessor wanted guidance from the Standing Orders Committee but never got it. That is a very good reason for me to make a ruling now and not to wait for advice from the Standing Orders Committee. The Standing Orders Committee does not sit in this chair, as the honourable member for Corio well knows; the Speaker does. The Speaker has to rule without notice of what is coming up. He has to rule at the time. I have so ruled. If the honourable gentleman wishes to dispute my ruling he has the opportunity to do so.

Mr Scholes:

– I rise on a further point of order, Mr Speaker. The final 2 lines of standing order 144 deal with the person who is asking the question; they are not at all applied to the person who is answering the question and never have been in this House.

Mr SPEAKER:

-That is so. I acknowledge what the honourable gentleman says. The 2 lines relate to the question being asked. There is no specific guidance in relation to the answer except to be found hidden away elsewhere in the Standing Orders. There is not such a specific provision in relation to the answer. I have ruled as I have ruled. If the honourable gentleman wishes to dispute the ruling he has the opportunity to do so.

Mr LIONEL BOWEN:

– Within the confines of what we are discussing I was indicating, Mr Speaker, that this legislation is necessary. No such legislation is now available in the federal sphere. I indicate that we now have this power, particularly following the High Court decision in the concrete pipes case which was delivered some time back. The real tragedy -

Mr SPEAKER:

– Order ! The honourable member is now giving the reasons why the legislation is to be introduced. Those reasons can be argued forcefully and fully when the honourable gentleman gets the call on general business day No. 4 and he can proceed to the second reading speech.

Mr LIONEL BOWEN:

-I do not want to argue with you, Mr Speaker. I was indicating, with respect, that there is need for legislation. But I have to indicate what the legislation we have in mind will embrace by way of power and control.

Mr SPEAKER:

-The honourable gentleman will make that point in the second reading speech, not in answering a question. The honourable member will resume his seat.

page 315

QUESTION

HANDLING OF MUSICAL INSTRUMENTS AT AIRPORTS

Mr BAUME:
MACARTHUR, NEW SOUTH WALES

– My question is addressed to the Minister for Transport. The Minister may be aware that on Sunday evening last an Australian orchestra returned to Sydney Airport from a highly successful cultural exchange tour organised by Musica Viva and the Department of Foreign Affairs. I ask the Minister: Could arrangements be made, as they are in every other major city throughout the world, for a member of such an orchestra to be allowed to supervise the unloading of musical instruments by airport baggage staff to ensure that damage is not done to the instruments? For the Minister’s information, I mention that this permission was not granted in Sydney on Sunday night and these instruments bumped their way up the baggage chute at the risk of serious and expensive damage.

Mr NIXON:
LP

– I am concerned to hear that there was a prospect of damage to the instruments of the Sydney String Orchestra. My understanding is that normally arrangements are made for somebody from the orchestra or body concerned to be able to help unload the instruments on the sort of occasion the honourable member described. I am unable to tell the honourable member why the same arrangement was not made on this occasion. I understand that the orchestra for some reason or other flew with Thai Airways instead of Qantas. I do not know whether any parochialism was shown in respect of that but I shall investigate the matter and give the honourable member a report at a later date.

page 315

QUESTION

PRIVATE USE OF AIR BASE

Mr E G Whitlam:
WERRIWA, NEW SOUTH WALES · ALP

– I ask the Minister for Defence: How did it come about that a private commercial organisation was allowed to- use Laverton air base for a motor cycle race meeting and to charge for admission to this defence facility? What investigations were made into the financial standing of this organisation which soon afterwards went into liquidation leaving overseas competitors stranded and their racing machines impounded? Since the organisation’s souvenir program prominently proclaims the support of the Prime Minister and the Minister for Employment and Industrial Relations, will he ensure that Australia’s standing overseas is not again prejudiced by allowing official facilities to be used by organisations with exalted patronage but insufficient assets?

Mr KILLEN:
LP

– In reply to the honourable gentleman, may I say that I am touched indeed by the solicitude that he now holds for the nation’s standing abroad. I regret that I cannot answer my honourable friend in the particular, but I give him a firm assurance that I shall at once set in train such inquiries as may be appropriate. But I remind him of the fact that this would not be the first occasion on which Service establishments have been used for the purposes of raising money for charity.

page 315

QUESTION

BASS STRAIT FREIGHT RATES

Mr HODGMAN:
DENISON, TASMANIA

-Can the Minister for Transport advise the House of what progress is being made on the preparation of a freight equalisation formula for Bass Strait freight rates and when an announcement may be expected?

Mr NIXON:
LP

-The House will know that in both the Prime Minister’s policy speech and in the Governor-General’s Address mention was made of the Government’s intention to introduce a freight equalisation scheme for industries in Tasmania. The honourable member will be pleased to know, or he may well know already, that officers of my Department have been to Tasmania on a couple of occasions to have discussions with the Chamber of Manufactures, the Chamber of Commerce and a variety of industry groups. As a result of those visits legislation is being prepared to go to the Government for consideration. I am hopeful that consideration will be able to be given to this matter within the next couple of weeks.

page 316

QUESTION

VISITOR VISAS FOR CYPRIOTS

Mr INNES:
MELBOURNE, VICTORIA

– Is the Minister for Immigration and Ethnic Affairs aware that the Australian office in Cyprus is refusing to issue visitor visas to legitimate tourists seeking to visit Australia? Will the Minister inform the House whether the failure to issue visas is related to the Government’s closing down of the consulate in Nicosia, which is widely condemned by our own Cypriot community? Has the Minister deliberately set out to reverse the policy of the previous Government of sympathetic and speedy assistance to Cypriot refugees with links in Australia?

Mr MacKELLAR:
Minister for Immigration and Ethnic Affairs · WARRINGAH, NEW SOUTH WALES · LP

– I shall answer the last question first. No, the Government certainly has not sought to impede the ability of legitimate refugees from Cyprus to come to Australia. Secondly, as the honourable member would know, it is the responsibility of people on the spot to assess the applications for visitor visas, to decide whether or not an application is a bona fide request to travel to Australia as a visitor. In the past, visitor visas have been abused. People have come here, saying that they were coming as visitors, but in fact have come with the intention of making permanent residence in Australia. So it is the responsibility of the people on the spot to make the decision. I am not aware that, as alleged by the honourable member if I understand him correctly, all people applying to the Cyprus office for visitor visas have been refused. I doubt that that would be the case, but I shall investigate the matter.

page 316

QUESTION

POSTAGE COSTS

Mr O’KEEFE:
PATERSON, NEW SOUTH WALES

– I ask the Minister for Post and Telecommunications: Is it a fact that high postage costs are causing considerable financial problems for business and the community? Is it also a fact that many firms and private people are delivering accounts and correspondence in local areas and that the Australian Postal Commission is thereby missing considerable business? Is it further a fact that a considerable proportion of correspondence is directed to post office boxes and that this should be less expensive as regards mail sorting? Will the Minister investigate the proposition of having a local delivery rate- a reduced postage fee- for this type of mail?

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

-It is true that the increase in postage costs, which is of course a decision of the independent Australian Postal Commission, has had an effect of reducing the volume of work going through the Postal Commission. In the Budget documents which I have seen, the Commission allowed for a decrease in the volume of business because of its increased charges. There is no doubt that many businesses, both small and large, are today delivering, particularly within capital cities. This means increasing loss of business to the Commission. It is true that a lot of mail is delivered to post office boxes. As to the investigation of some reduction for local delivery, I have indicated that I want to discuss this matter with the Commission. It is not the first time that it has been raised. It will be discussed with the Commission in the next week or two.

page 316

QUESTION

MR HENRY FISCHER

Dr KLUGMAN:
PROSPECT, NEW SOUTH WALES

– I direct my question to the Minister for Foreign Affairs. I refer to the Mr Henry Fischer who was mentioned in a report by the Department of Foreign Affairs which was referred to yesterday in this House. It was said in the report that he met and hosted 2 Iraqi visitors to Sydney. Is that Mr Henry Fischer employed by the Scarf Memorial Foundation, a tax-exempt company, because, as Mr Scarf put it in today’s newspapers, he had political nous and knowhow? Was he previously publisher and editor of the Australian International News Review, a profascist, anti-semitic monthly?

Mr SPEAKER:

-Order! The question is out of order. You must not reflect upon a person, by name, in a question.

Dr KLUGMAN:

-A magazine!

Mr SPEAKER:

-But you described the magazine in terms which quite clearly are a reflection on the person named. I point out to the honourable member that the standing order is quite clear. I do not want to prevent him seeking information. I draw his attention to standing order 153 which states:

Questions shall not be asked which reflect on or are critical of the character or conduct of those persons whose conduct may only be challenged on a substantive motion, and notice must be given of questions critical of the character or conduct of other persons.

Notice has not been given. The honourable member described the person as holding a position on a newspaper and then he described that newspaper as being of a certain character. It is not known to anybody here whether that newspaper does have that character and by applying that term to it the honourable member is reflecting on the person. I will allow the honourable member to proceed with his question but having drawn his attention to the standing order I ask him not to reflect upon a person.

Dr KLUGMAN:

-I am sure that the rest of the question, although it is controversial, possibly, is not offensive. Let me put it this way: It is politically controversial but not otherwise. Was he a prominent member of the Basic Industry Group which was set up to destroy the Country Party? Was he the president of the Beauty Point branch of the Liberal Party and has he claimed that he was instrumental in replacing a previous small ‘ 1 ‘ Liberal with Mr MacKellar as the endorsed Liberal candidate for Warringah?

Mr PEACOCK:
Minister for Foreign Affairs · KOOYONG, VICTORIA · LP

-The Prime Minister yesterday gave the details of the contact of the Department of Foreign Affairs with Mr Fischer. As for all the other factors that are relatively unknown, or are known to some persons, I suggest that the honourable member ask his question of the Leader of the Opposition, who clearly has had more detailed dealings in recent times than we have had.

page 317

QUESTION

RULES OF EVIDENCE

Mr Donald Cameron:
GRIFFITH, QUEENSLAND · LP

-Has the attention of the Attorney-General been drawn to the move by the Queensland Government to change the rules relating to the admissibility of evidence? This followed a recent report. Is the Minister aware that the report suggested that tape recorded evidence become admissible as evidence in court? In view of the promise of the Government to refer the question of privacy to the Law Reform Commission, can the Minister indicate when this is likely to be done? Could he make an approach to the Queensland Government before it does alter those rules to suggest that the Commission have an opportunity to consider privately this very vital and important individual liberty?

Mr ELLICOTT:
LP

– My attention has not been drawn to that report. However, the question of privacy is being kept well in mind. I think it was indicated that before the question of privacy was referred to the Law Reform Commission it would be discussed at a meeting of the Standing Committee of Attorneys-General. That meeting, subject to matters such as air strikes, which prevented a meeting on legal aid taking place last Friday, will take place on Friday, 5 March. As a result I hope to be able to settle terms of reference on the question of privacy to be referred to the Law Reform Commission. The question of the use of tape recordings as evidence in proceedings is a very important one. Advanced technology does affect the rules of evidence and the admissibility of evidence which is different from conventional evidence. Insofar as that is relevant to the question of privacy, I would think that it would automatically come within the purview of the Law Reform Commission’s consideration. Insofar as it does not, I understand it is a question which is being given consideration by some officials in my Department. I do not have precise details, but I am aware generally of the fact that some consideration is being given to that question.

page 317

QUESTION

INDUSTRIES ASSISTANCE COMMISSION STAFF

Mr FRY:

-Will the Minister for Business and Consumer Affairs give an assurance that no redundancies, retrenchments or transfers will be made in respect of present staff of the Industries Assistance Commission? Will he give a further assurance that no amalgamation of the IAC or parts of the IAC will take place with any department or any other statutory authority which might result in redundancies, retrenchments or transfers of IAC staff?

Mr HOWARD:
Minister for Business and Consumer Affairs · BENNELONG, NEW SOUTH WALES · LP

– I assume that the honourable gentleman’s question arises out of a meeting of the Industries Assistance Commission’s staff, which was reported in the Canberra Times this morning. I have been asked certain things as a result of that meeting. I can give an assurance that there will be no redundancies or retrenchments of any IAC staff. The question of any transfers or other rearrangements is still under consideration. I can assure the House that there is no question of the IAC being treated differently from any other department or any other statutory commission in the context of the Government’s review of the continuing operations and the continuing needs of statutory bodies.

page 317

QUESTION

SKIM MILK POWDER

Mr LLOYD:
MURRAY, VICTORIA

– I draw the attention of the Minister for Primary Industry to the already depressed state of the manufacturing sector of the dairy industry. Prices presently received by farmers are 20 per cent or 30 per cent less than the prices received last year and are now at the same level as they were 25 years ago. In spite of Australia’s having the most efficient dairy industry in the world, next to New Zealand, this is an insufficient return in the present inflationary situation. Is the Minister aware that because of the common agriculture policy of the European Economic Community and the present world over-supply of skim milk powder the price to farmers could fall to that received in the Depression 40 years ago, with a complete breakdown of orderly marketing of city milk and disastrous social and economic consequences for rural Australia?

Mr SINCLAIR:
NCP/NP

-It is quite true, as the honourable member suggests, that there is a very critical problem emerging in many of the milk producing areas of Australia, particularly those which are dependent upon producing milk for manufacturing purposes. The marketing position can be described as nothing less than appalling. There is already in the markets of the world quite wide signs of price cutting. For countries such as Australia, which has endeavoured to maintain the General Agreement on Tariffs and Trade minimum prices for products such as skim milk powder, there are disadvantages, and sales are being forgone simply because we are seeking to maintain internationally a minimum price which will yield a reasonable return to producers. The problems of the milk industry have been under very close scrutiny within the industry itself. The Australian Dairy Corporation produced a plan which was designed to alleviate some of the marketing problems. There are difficulties not only in that plan but also in the differences between States and within States.

I am hopeful that within the next few weeks it might be possible for the industry itself to come to some firm conclusions as to the best basis of assistance a government should provide and then, in conjunction with the States, to see whether it might be practicable for the Commonwealth Government to help to alleviate the present quite serious position of individual producers. I know the honourable member’s concern. It is shared by many others throughout Australia. Essentially it is a question of how those individuals who are entirely dependent upon a dwindling return can survive in spite of the overall inflationary circumstances. We will do what we can to assist them as soon as we can.

page 318

QUESTION

COAL: AUSTRALIAN PARTICIPATION

Mr JACOBI:
HAWKER, SOUTH AUSTRALIA

– I address my question to the Minister for National Resources. As the Minister is aware from reliable reports that it will cost about $200m to develop the Norwich Park coal reserves and about $6 50m to develop the ThiessPeabodyMitsui consortium’s Nebo coal project, can he inform the House how his Government’s policy of at least 50 per cent Australian participation is to be achieved? Will he further advise the House how the 8 per cent equity needed to raise the Australian participation in the Hail Creek coal project to the 50 per cent level fixed by his Government is to be achieved?

Mr ANTHONY:
NCP/NP

– I have had discussions with all the companies involved in what is known as the central Queensland coalfields. This area involves 3 coking coal fields and one steaming coal field. We have stated to all of these people that it is our intention that these projects should be developed with at least 50 per cent Australian equity. The honourable member questions whether it will be possible to obtain 50 per cent Australian equity. I am surprised that he should ask that question when the previous Government demanded 100 per cent Australian equity. However, I am confident that as a result of the negotiations that I have been having with these people it will be possible to obtain at least 50 per cent Australian equity in each one of these projects.

page 318

QUESTION

IRAQI VISITORS

Mr BRADFIELD:

– I direct my question to the Prime Minister. Having had past experience as Leader of the Opposition, in which position the Prime Minister is unlikely to serve again, will he say whether he would have been able to find the time to engage in a social breakfast with people he had not met before and for no apparent reason, just 3 days before a Federal election?

Mr MALCOLM FRASER:
LP

– It would seem to indicate a rather odd order of priorities, especially if I had not met the gentlemen before. I would have wanted at least to know one of them very well. But the circumstances do not arise. I think other people have a quite strange way of doing business with quite strange people.

page 318

LAW REFORM COMMISSION

Mr ELLICOTT (WentworthAttorneyGeneral) Pursuant to sub-section 35 (3) of the Law Reform Commission Act 1 973 I present the annual report of the Law Reform Commission for 1975.

page 318

LEGISLATIVE DRAFTING INSTITUTE

Pursuant to section 28 of the Legislative Drafting Institute Act 1 974 1 present the annual report of the Legislative Drafting Institute for the period from 9 December 1974to30 June 1975.

page 318

AUSTRALIAN ECONOMY

Discussion of Matter of Public Importance

Mr SPEAKER:

– I have received a letter from the honourable member for Adelaide (Mr Hurford) proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The actions of the Government in jeopardising the steady recovery of the Australian economy.

I call upon those members who approve of the proposed discussion to rise in their places. (More than the number of members required by the Standing Orders having risen in their places)

Mr HURFORD:
Adelaide

-What we want at the moment in this country more than anything else is consumer confidence. We want a consumer-led recovery so that the men and women who are unemployed can get back to work and so that the under-employed resources can be used more. Instead of this, the Government is putting in jeopardy the whole of the steady recovery which was in train. In the grab for power, day one, the present Prime Minister (Mr Malcolm Fraser), then Leader of the Opposition, announced that the Senate would defer the passage of Appropriation Bill (No. 1) and Appropriation Bill (No. 2)- the Budget Bills arising from the Australian Labor Government. The main excuse given for doing this was economic mismanagement. In fact, what has happened since this grab for power is that the steady recovery which was emanating from Budget measures has been, I repeat, put in jeopardy. We in the Opposition are not suggesting that this country is not suffering from a sick economy. Of course it is. But we are suggesting that all the signs showed that that sick economy was on the way back to health. The latest unemployment figures were very heartening in this regard. Furthermore, one only has to look at the surveys of business confidence, such as the surveys of the investment decisions of businessmen, and all those surveys taken while the Australian Labor Government was in charge of this country. Those surveys showed that confidence was slowly returning. I repeat, there was a steady recovery. Now we on this side of the House suggest that it has been put seriously in jeopardy.

Let me go through the measures to which I am referring when I suggest that this recovery has been put in jeopardy. The first is the increase in the liquid assets and government securities ratio. I will return to that later. The second is the delay in the announcement of the decision not to devalue our currency. The third is the present interest rate policy. On the fiscal side there is a mania about Budget deficits, so well outlined by the honourable member for Mackellar (Mr Wentworth). In addition to that we have the chopping and changing in the investment allowance. Superimposed on that is the wages policy, the sacrificing of the hard-won industrial peace. The honourable member for Gellibrand (Mr Willis) will be covering that side of the argument in this debate.

I have only just been told that the honourable member for Fraser (Mr Fry) will not be allowed into this debate to talk about details of government spending cuts. I understood that the arrangements between the Government and the

Opposition were that 2 hours of debate on matters of public importance would be allowed each week. That would mean a debate on one day with 2 speakers from each side and on another day with 3 speakers from each side. As far as I am aware, there were only 2 speakers from either side in the debate last Tuesday. If the Treasurer (Mr Lynch) knows the reasons that the agreement for 2 hours’ debate has been terminated, will he give us those reasons?

I am pointing out that 3 months ago this Liberal-Country Party coalition came to power on promises which were very different from the actual policies which it has carried out. Its preelection document emphasised income tax cuts. It emphasised tax indexation. It emphasised the problems of companies. It emphasised the Mathews recommendations on current value accounting and all that emanated from the document. Now we have instead this talk about tightening belts, talk about the need for restraint, cutting back and so on.

Let me reiterate our belief in the need for moderating inflation. It is a necessary precondition for a return to a situation of full employment, of the full use of the resources that are available and that are now under-employed, that there should be a return of consumer confidence. I believe that the Australian Labor Government’s Budget of last August, which was so wilfully and dangerously delayed by the present Government in its passage, set the scene, as I have already said, for this steady recovery. It was expected that this recovery would be led by housing as well as consumer spending. There was ample liquidity for housing in the community in the banking system. The tax cuts from 1 January assisted in the liquid situation and should have assisted in this recovery. The indexation rise in national wages expected in February- foreseen not only by those of us on this side of the House but also foreseen by those now in Government- was another way of ensuring that there was sufficient liquidity, sufficient spending power in the pockets of the citizens of this country to assist in the recovery of our economy. The easier money was already giving rise to lower interest rates and out of more housing came more need for consumer durable spending. This was the pattern that had been set. This was the hope for this country to get us back to a situation of full employment.

The whole outlook has changed. We are now, as I said, suffering from an increase in the LGS ratio from 18 per cent to 23 per cent. The proportion of assets to be held by trading banks in liquid resources and in government securities does mean less liquidity in the banking system. As to the interest rate policy, although there was one impression given by the Treasurer in his statement at the time of announcing the Australian Government bond- the Australian savings bond, the 10.5 per cent bond- which led the community to believe that he was initiating a lower interest rate policy, every sign since then has been that that was a piece of window dressing. Indeed, interest rates are at the moment increasing across the board. It is not just a question of isolated building society rates in one State increasing. With a tightening of liquidity interest rates generally will increase.

Then there was the decision about devaluation. I believe that the Treasurer was culpably negligent in not announcing government policy a lot earlier about devaluation. In no way do we suggest that there should be devaluation. That would indeed have been very inflationary had it occurred, but following the election result on 13 December last year the rumours which had been circulating for some weeks that the Australian dollar would be devalued gathered momentum and were further heightened by the official leaking on 15 December of the capital movement figures which showed a large net outflow. Whilst the speculation could have been easily quashed at any time no announcement of the Government’s intention with respect to the Australian dollar was made until 4 January 1976. In the meantime there had been an excessively high outflow of capital in December and some $475m went out of this country and Australia’s international reserves had fallen by $600m. Of course this too has had a marked effect on the liquidity in the community, a marked effect on getting back to consumer confidence, consumer spending and the recovery which would follow.

Superimposed on all of this, of course, has been the Government’s spending cuts. The first thing I want to draw to the attention of the Treasurer is the question put to him by my colleague the honourable member for Darling (Mr FitzPatrick) 2 days ago relating to the insufficient information given to the Parliament and to the people about these spending cuts. If one totals the spending cuts so far they amount to only $275m. Through the Parliamentary Library contact with the Treasurer’s own Department one learns that perhaps there is another $9m somewhere not included in Press releases from the Government, but the most that one can find is $284m. This is excluding, admittedly, staff ceilings which relate to another $60m so-called savings. It is not good enough to talk glibly about $300m and expect a proper examination of this policy by parliamentarians, by the community generally and then give insufficient information about it.

What we do know about these cuts can be put into 3 categories. The first category is that they are sheer window dressing. I put a question yesterday to the Treasurer about the amount of socalled savings within the Department of Foreign Affairs. The question was not answered by him. It was attempted to be answered by the Minister for Foreign Affairs (Mr Peacock), but the question was evaded. I put the question now to the Treasurer: How on earth does multilateral aid, bilateral aid and food aid to countries abroad affect the level of money supply in this country? How can it be termed anything else but window dressing in this regard when it comes to the socalled cuts in government spending within Australia?

Another of the categories for this spending is the tragically unfair nature of them. There is an amount of $29m in relation to the Department of Social Security. I refer to the delay in the payment of pension increases. There is the very amount within the Department of Foreign Affairs to which I have just referred. The tragic result is that many people who need that aid in underdeveloped countries are not receiving it. It is just not good enough to hear an answer suggesting that it will be given in the next half of the financial year. If it is given in the next half of the financial year it will mean that much less will be appropriated in the next Budget for this very humanitarian purpose and it will mean that those in great need overseas will be without that aid at a time when there is desperate need.

Then there are the cuts in the Department of Health in relation to pharmaceutical benefits. There has been a decrease in the amount of money available to the Department of Health, giving rise to the increase in charges for benefits in the pharmaceutical field. Does anybody imagine that that will not hit in the most austere way those on lower incomes? Similarly the $29m for the Australian Housing Corporation is worth mentioning. This money was to plug a deposit gap for those in greatest need. So there is this category of tragically unfair inequitable cuts in government spending and all to no purpose, as will be driven home by the honourable member for Gellibrand (Mr Willis) who will follow me in this discussion- a mania about Budget deficits, a mania which should not exist during a time of underemployment of men and resources.

The third category is the economically stupid cuts. How can a cut in the amount of money available to the Department of Construction involving $6m do anything but delay a recovery in the construction industry? Does anybody on the government benches in this House suggest that there is not underemployment of men and resources in the construction industry? How on earth does it bring about a recovery when there is going to be $6m less available by this deferment of certain capital works? The same applies to the $7 5 m cut in funds for the Australian Industry Development Corporation. The Corporation may not have suggested that it wanted the money immediately, but any government really concerned about getting this country back on the rails of recovery should have seen that it made every move possible to spend that money. Those funds, which were investment funds, would have resulted in men and women in this country getting back into employment.

In summary I suggest that the recovery was coming. I hope that the Government will see the error of its ways and will not continue with this credit squeeze.

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

Mr LYNCH:
Treasurer · Flinders · LP

– The matter proposed for discussion by the House today, like the matter raised by the Opposition last week, reflects the Opposition’s basic misunderstanding of present economic circumstances in Australia. It is extraordinary for the Australian Labor Party to be criticising this Government for jeopardising economic recovery. The simple fact is that our opponents opposite are directly responsible for the present recession. I remind the House of what the International Monetary Fund said in its survey of 28 July 1975:

The origins of the Australian recession are therefore to be found in domestic developments.

That quotation is well sustained by other comment from economists both in this country and overseas.

Let me remind the House of the 1974 credit squeeze, the 25 per cent across-the-board tariff cuts, the range of measures deliberately directed against the Australian business community, the deliberate moves to expand the public sector at the expense of the private sector of this economy. The Labor Party, the party which has created the present recession, has no better answers to offer to this House today than it had during its term of office. The strategy put forward by the honourable member for Adelaide (Mr Hurford) as the shadow Treasurer in this Parliament apparently involves a proposition of no reductions in government spending, no reductions in the deficit, a 6.4 per cent wage increase, no measures to mop up excess liquidity and no taxation incentives to stimulate business investment. The policies being advocated by the other side of the House, if I comprehend them, are nothing less than a prescription for sheer economic disaster.

Let me come straight to the essential point of this debate. Until inflation and inflationary expectations are curbed there will be no lasting recovery in economic activity and no return to high levels of employment. The fact is that the honourable member for Adelaide has divorced the Opposition from any understanding of contemporary economics. I remind the honourable gentleman of what the former Treasurer told the House during last year’s Budget Speech. He said:

We are no longer operating in that simple Keynesian world in which some reduction in unemployment could, apparently, always be purchased at the cost of some more inflation.

It is clear that the Opposition today is operating in a simple Keynesian environment. The Labor Party has now made it clear that there should be no reduction in the Government deficit and no action taken to curtail the rate of monetary growth which was experienced during 1975. Indeed the honourable member for Adelaide was quite explicit on this point during his speech to the House on 19 February. The Government, for its part, rejects the Opposition’s argument without reservation. It is an argument which would condemn Australia to further inflation and to a continuing and unacceptable high level of unemployment.

The view which the Government has adopted is being recognised increasingly as appropriate by comparable economies throughout the world. More government spending, large budget deficits and easy liquidity have not provided a means of moving the economy out of recession. Recent experience has demonstrated the futility of this so-called conventional textbook medicine. The fact is that the conventional Keynesian-type prescription for economic ills is everywhere being reappraised. It is being reappraised for the most practical of reasons. In recent years, both here and overseas, not only has it not worked but it has also proved to be counter productive. The reluctance of consumers to spend higher incomes in the face of continuing high inflation has been a distinctive feature recently both in Australia and overseas. A conventional deficit spending recovery, if it got under way, starting from a double digit inflation base would inevitably entail a re-ignition of accelerating inflation. That the old orthodoxy has had its day is, I believe, widely recognised throughout the western world.

The United States Economic Report of the President of January 1976 said:

The events of the past several years have once again convincingly demonstrated that accelerating inflation causes instability and disruptions, increases unemployment, and ultimately precludes real prosperity.

The annual meetings issue of the IMF Survey in September 1975 had this to say:

Any handling of the current problem of international recession that involved a setback on the inflation front would inevitably be short-lived, representing a prelude to further economic instability.

I refer also to the Organisation for Economic Cooperation and Development Economic Survey of Australia in July 1975 which commented:

Unemployment is at an unacceptable high level and there is the risk that failure to control inflation could exacerbate the problem.

In the United Kingdom, the very home of Keynesianism, which country is presently under a Labour administration, the futility of piling on new deficits in order to reduce the unemployment created by the succession of previous deficits is belatedly being discerned. As the British Prime Minister, the Right Honourable Harold Wilson, said on 2 February:

But it would be a great mistake to act precipitately and reflate now on a massive scale. That is no easy way out of our economic problems. For the result would be yet another inflationary boom, febrile and short-lived. It would be a clutch of measures creating and reinforcing another move into depression and unemployment.

Examples could also be given from Canada, Germany and Japan, but I believe that the point has been made.

This Government, in a very short period in office, has acted decisively and, I believe, as part of a comprehensive economic program to curb a potential danger to recovery of excess liquidityfirstly, to reduce the impact of the Budget deficit on the money supply and secondly by using instruments of monetary policy to mop up excess liquidity. In this debate time does not allow an adequate outline of the strategy which underlies those Government policy actions but, with the concurrence of the Leader of the House (Mr Sinclair), I intend to take the opportunity to bring down an economic statement when it suits the convenience and the time-table of the Parliament. Let me simply say here in brief that the Government has adopted a balanced mix of fiscal and monetary policies. It has no intention of relying, as its predecessor did, on monetary policy alone to deal with the results of overspending. The fact is that this Government has inherited the inevitable result of permissive government policies. There can be no argument with the proposition that the policies of 1975 resulted in a potentially highly dangerous situation of excess liquidity. During 1975 there was a rapid growth in the volume of money in spite of the fact that there was very little real growth in the economy. In the year to December 1975 the liquidity base of the private sector increased by $2,675m, almost 4 times the average increase recorded in the proceeding 10 years. This occurred in spite of 2 quarterly collections of company tax, a major outflow of international reserves and calls to statutory reserve deposit accounts of trading banks amounting to $584m. The increase in the liquidity base of the private sector during the 6 months to December alone was almost $ 1,900m.

The fiscal irresponsibility of the previous Government was the major factor contributing to this flood of money. As the Parliament is aware, our Government has acted to bring down the growth rate of the volume of money below 20 per cent, the rate we inherited, but not to induce a credit squeeze or to impair the capacity of the private sector to underwrite a firmly-based economic recovery. I reject now, as I did during the course of the recent election campaign any suggestion that our policy could in any way be described as a credit squeeze. It is not a credit squeeze and there will be no credit squeeze caused as a consequence of the overall monetary package which the Government has brought down. I might say in relation to that particular matter that the monetary policy actions that have been taken during recent weeks were at the time of their announcement warmly applauded by the former Treasurer, the honourable member for Oxley (Mr Hayden). What the honourable member for Adelaide (Mr Hurford) ostensibly is now doing in this debate is condemning a package which his own Treasurer was prepared to applaud by saying that the new Government’s economic package is an appropriate measure at this point. He then went on to try to take some credit from the package by saying that had he been in office he would have adopted a similar approach.

Our approach is flexible. We are fully aware that while recovery in the private sector is conditional on absorbing excess liquidity, too sharp a drain would jeopardise that recovery. It is essential that financial intermediaries be able to provide volumes of finance adequate to underwrite the recovery. This is a concern that was not reflected in the former Government’s policies. Our opponents in this House, as the honourable member for Adelaide should be aware, were directly responsible for the present recession, a recession largely brought about by the 1974 credit squeeze. I recall no comment by the honourable gentleman about the severity of.that squeeze and its direct impact on the private sector at the time that his Administration brought it down. The rapidity with which the volume of money was contracted during 1974 has no parallel in Australia’s post-war history. The squeeze then was more severe than on any previous occasion when the growth in the money supply has been curtailed. I refer for example to 1961, 1965 and 1970.I seek leave of the House to incorporate in Hansard a table setting out the relative severity of the 1974 credit squeeze.

Mr DEPUTY SPEAKER (Mr Lucock:
LYNE, NEW SOUTH WALES

-Is leave granted? There being no objection, leave is granted. (The document read as follows)-

Mr LYNCH:

– As the table demonstrates, the volume of money, broadly denned, declined at an annual rate of almost 7 per cent during the 3 months to September 1974. The Opposition’s argument has no foundation. I summarise the policy which we have put forward in terms of stimulus to the economy by referring to the relaxation of the conditions applying to convertible notes, the suspension of quarterly collection of company tax and, most significantly, the implementation as from 1 January of a 40 per cent investment allowance to apply to all industries. It is a nonsense to talk about the economic policies of this Administration as though they were impairing confidence. The evidence indicates that the measures we are taking are working and recent surveys- for example, the ACMA-Bank of New South Wales survey- indicate quite clearly that confidence is returning and that business is planning to expand its activities during 1976. What in fact the Opposition is doing today is to talk the economy down and we reject completely the substance of the matter for debate before the Chair.

Mr DEPUTY SPEAKER (Mr Lucock)Order! The Minister’s time has expired.

Mr WILLIS:
Gellibrand

-The Treasurer (Mr Lynch) as usual is strong on cliches and short on logic. The fact is that this Government has a tremendous amount to live up to in the area of economic policy. It claimed right through the period of the last Government and particularly during the 2 election campaigns that the Labor Government was responsible for the economic ills of this country and solely responsible for what was happening- solely responsible for the massive increase in inflation, which we admit occurred as it occurred everywhere else, and for the recession which followed that inflation. It flowed from the assertions of the then Opposition that if it had been in government the problems would have been solved, there would have been no or very low inflation and there would not have been a recession. This is a monstrous misrepresentation of the factual situation. As the Treasurer and those on the other side of the House with any economic knowledge know, what was happening in this country was not happening in isolation. It was happening as part of the economic problems which have beset the Western world from 1973 onwards.

I do not have time to go through the details of that but it is a fact that every country was beset with much higher rates of inflation than they had ever before experienced and much higher levels of unemployment. Some countries had higher rates of inflation and others had higher rates of unemployment and it was absurd to suggest that what was happening here was happening in isolation, but this suggestion was desperately reiterated time and again by the then Opposition. The fact is that the present Government deceived the people by saying that the Labor Government was solely responsible. This Government now has a tremendous responsibility because having deceived the people it must now face the consequences of that deception and show to the nation that it can solve the economic problems and do it speedily; otherwise it will lose all credibility in this country. I predict that the Government will not solve the economic problems of this country, speedily or otherwise. Already we find the Treasurer saying that it will take some time to bring about an economic recovery, it will be a difficult process, it will be a full 3-year program, and making all the cautionary comments that were never made when the Government was in Opposition or for the month before the last election when it was the caretaker Government.

The fact is that this Government is totally mesmerised by the deficit. It is almost completely captivated by the monetarist school of economics. I say ‘almost completely’ because it does not follow that school of thought right through. If it had asked the doyen of the monetarist school of economics, Professor Friedman, what to do about wage indexation he would have told it that it needed to give the 6.4 per cent increase because he believes in full wage indexation. So if the Government is to be monetarist why does it not follow that theory right through? It does not do that. It accepts that theory in the fiscal or monetary area and it does not accept it in respect of wage fixation. The fact is that there is an enormous amount of misrepresentation about the Labor Government’s deficits. It has been repeated here time and again that inflation in this country stemmed from the deficits brought in by Labor governments. That is a lie.

The fact is that the Budget defict in 1972 brought in by the McMahon Government was $630m. That turned out to be slightly higher in the event. We budgeted then in 1973 for a deficit of $687m. That turned out to be only $293m by the end of the year. In 1974 we budgeted for a deficit of $570m. That turned out to be $2.5 billion, which was much higher than we had budgeted for. I make this point: The fact is that the rate of inflation reached its zenith before there was ever any expansion in the Budget deficit. The highest rate of inflation came at the end of 1974, and at that time the deficit was just starting to be created. It was not above the levels of normality for the previous few years. In fact, in that year 1974 we had budgeted for a notably lower deficit that the McMahon Government had in 1972. So let us have no more of this nonsense which has been reiterated here by the Treasurer, who has departed the scene, that inflation was caused by Labor deficits. It is a total untruth.

We say that the growth in the deficit in 1974-75 beyond what was budgeted for was not accounted for by the Government just throwing money around like confetti. It happened for 3 reasons. Firstly, it happened because there was a decline in receipts created by the recession. There were fewer people working and therefore fewer people paying income tax and there was a reduction in company profits. There was a higher than estimated rate of inflation which increased the costs of government administration anyway.

Also once employment started to deteriorate notably, as it did in the last part of 1974, there was an expansion in a number of government programs to try to maintain full employment. Had we not done that, the rate of unemployment in this country would have been much higher than in fact occurred. Then in 1975 we budgeted for a deficit which was at about the same level as actually occurred in the previous year; it was $2.8 billion. In fact, if the present Government had not got into power it would have finished up being something like $4.8 billion, or $2 billion higher. That was not because there was any mad throwing around of money again but simply because there was a drastic reduction in the rate of growth of wages. The Budget forecast was 22 per cent; in fact, it looks as though it will be more like 12 per cent this year. Because of that, the tax revenue was a lot less. That was the major reason for the expansion in that deficit; it was not because of wild, extravagant government spending.

The same thing has been happening with government deficits overseas. An article in the October 1974 issue of the Economist showed that the United States, which budgeted for a deficit of $58 billion, anticipated a deficit of something like $90 billion. The same thing happened in Japan, in West Germany and in the United Kingdom. Two of those countries did not have Labor governments, and they all found that they had a recession following their inflation, just as we did. Then they had a substantial decline in tax receipts because many fewer people were paying tax as a result of being unemployed, and also because the rate of increase in wages dropped drastically in all of those countries.

In the United States there is a concept known as the full employment deficit. When looking at deficits they say that one should not look simply at the fact of the deficit in isolation from the state of the economy. If the deficit is caused by recession, then one can see just how big the real full employment deficit is by anticipating what that deficit would be if there was full employment. I suggest that the really important thing is not the actual level of the deficit in the middle of a recession but what the full employment deficit is. To say otherwise is to follow the monetarist’s school fully and to bring about much higher unemployment in order eventually to bring about recovery. It is assumed that that may eventually happen. It may not; it may just get worse. It certainly would mean that there would be far higher levels of unemployment. Is the Government prepared to do that? Is it really prepared to follow through the consequences of its logic and create far higher unemployment? The Government is starting on that process right now. It is starting to create higher unemployment. It is jeopardising the recovery. By making expenditure cuts and also by starting to introduce monetary policies which are leading to higher interest rates, the Government is jeopardising that recovery. If it follows through that logic into next year we will have much higher unemployment in this country. The Government must know that to be the fact. Perhaps it is just prepared to do that, hoping that by 1978 things will be slightly better and that people will have forgotten the horrors of 1976 or 1977.

That is the logic of the Government’s position. It is one which should be of great concern to the people of this country. The Government is obsessed by a deficit and by the growth of the money supply. I simply make this point in relation to the money supply: The Treasurer said today- he has said it continually- that the money supply increased by 20 per cent in 1975. He does not say a thing about the fact that the rate of growth in the money supply was dropping during the last part of 1975. In the September quarter of 1975 the growth rate, on an annual basis, was 19 per cent. In the December quarter it dropped back to 12 per cent. In other words, the Labor Government was reducing the rate of increase in the money supply, and to talk of the annual figure for 1975 is a deception.

We do not oppose the concept of the savings bonds. We do oppose the absurdity of the 10.5 per cent interest rate which was totally unnecessary. It was hailed as a great success by the Treasurer. If it had been much more of a success it would have been a total disaster because it would have dragged the money out of the building societies and the banks, and there would have been a credit squeeze in no time. After a mere two and a half weeks it was scrapped and Series 2 was introduced with lower interest rates. It is interesting to note that the interest rate of 10.5 per cent- that miscalculation, that incompetencemeans that for the next 7 years an annual amount of $7m has to be paid in interest which would not have to be paid otherwise.

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

Mr MACPHEE:
Balaclava

-The honourable member for Gellibrand (Mr Willis) has posed the dilemma facing Australia as being one of high unemployment or high inflation. This is a bullet upon which the Government may well have to bite. What is important to note is that the reasoning which ran through the honourable member’s speech is a theme which he has pursued consistently in this Parliament, namely that if you are going to do something about the deficit then unemployment will increase. What we do know is that we have a record deficit now and we also have record unemployment. The honourable member mentioned overseas countries, including the United States, where the level of unemployment and the level of inflation have been roughly comparable at about 8 per cent. The United States apparently elected to have that level of unemployment, unacceptable though it is, in order to have a more acceptable rate of inflation. Perhaps that is the issue which this Government has to be prepared to face up to. One would be reluctant to say in these early days that that would be one of the consequences with which we would have to live. The Australian people have had a relatively full employment situation and a full employment policy for many years. It may well be that in the next few years we will have to live with a higher level of unemployment. That is one of the options which it will be hard to take. But we know that the alternative pursued by the Labor Government was a record deficit, record inflation and record unemployment, and we could not have more of the same.

The honourable member also has questioned the logic of the Treasurer (Mr Lynch). If one looks at some of the previous speeches of the honourable member for Gellibrand one sees that he has recorded his views on Budget deficits. There is something sadly astray in a line of reasoning that there is nothing wrong with the deficit in that sense because it helps to keep unemployment down when the level of the deficit is such that it is not the cause of inflation. The cause is a package of measures pursued by Labor, and that package of measures has been listed ad nauseam by us in opposition and, of course, adverted to again today by the Treasurer. The performance of the Labor Government as economic managers was abysmal, and the people have judged that well and truly. Despite all the red herrings about constitutional crises, the Australian electorate on 13 December judged it on its capacity to manage the economy. The Australian electorate must be taken as being willing to have cuts made in government expenditure and a long, slow rate of recovery which may well carry with it the consequence of a hitherto unacceptable rate of unemployment for some time.

The Opposition has shown by this debate today and by other comments made in the Address-in-Reply debate that it really learned nothing from its period in government. It ignores the notion of initiatives by this Government, because we heard the shadow treasurer today talking as though we can have some notion of imported prosperity in the way in which we allegedly had imported inflation. We know very well that the performance of the other countries to which the honourable member for Gellibrand referred has been relatively much better than Australia’s performance, even bearing in mind that each of the other industrialised countries was subject to the consequences of the oil crisis when we were 70 per cent self-sufficient. Yet we managed to so mismanage our economy that we have a higher rate of inflation than most of those countries.

The Fraser Government inherited chaos stemming from the old welfare state paternalism with handouts for all regardless of need and regardless of cost to the taxpayer. The pursuit of this policy led to the grave situation which the present Government is trying to rectify. It led to a squeezing dry of the private sector. Yet listening to members of the Opposition speaking this week and last, one still hears them talking as though the money comes from a bottomless pit. We have seen the ruin of thousands of small businesses. We have seen the collection of a record taxation revenue.

The honourable member for Gellibrand claimed also that the income tax burden which was unacceptably high in 1973-74 has been reduced as a result of the last Budget. That is true for some individuals, but the overall tax burden which has the adverse impact on the economy has in fact increased because income tax revenue in fact has increased markedly. In 1973-74 personal income tax revenue increased by 34.2 per cent. In 1974-75 the increase was 40.5 per cent. In 1973-74 the marginal tax rate on average weekly earnings was 30.3 per cent and in 1974-75 the rate was 38 per cent. So overall the total economy has had to bear an increased burden. Yet the Opposition still has the gall to advocate more of the same. About 75 per cent of persons employed in Australia are employed by the private sector- a point made repeatedly by the President of the Australian Labor Party and of the Australian Council of Trade Unions. Government tax revenue depends largely on that private sector. Social welfare payments depend largely on the well-being of that sector. Yet it has been milked dry. Reports and surveys of the previous Government, its own departments and the private sector all chronicled the decline of the private sector. But Labor did not listen. The first project of this Government was to stimulate the private sector to start the long haul back to improved conditions for employment and a decrease in the inflation rate.

When the honourable member for Oxley (Mr Hayden) was Treasurer he did provide us with a ray of hope. But even he was not able to present a Budget which really gave incentives to individuals and to the private sector in order to begin the recovery. So it is nonsense for the shadow Treasurer, the honourable member for Adelaide, now to say that a recovery was in sight when the Whitlam Government went out of office. Recovery certainly was not in sight because the previous Government had done nothing in its domestic policies to bring it about.

There has been a lot of talk about the Budget deficit and its purpose. A very delicate balance is facing the present Treasurer, namely, the question whether to cut the rate of growth of spending too harshly. If he were to do that, of course, whilst we would have the reverse of Labor’s policies we would have an equally serious consequence for the economy. But not to cut the rate of growth would result in continued acceleration of the rate of inflation which came about under Labor’s rule. One can talk about the purpose of the Budget deficit which we have inherited. It was clearly to go on having spending programs at the expense of the private sector and not to stimulate the private sector. This has been a source of money generation. The honourable member for Gellibrand can condemn the monetarists if he will but we have been fortunate that there has been a run down in our international reserves to offset to some extent the expansion of the money supply which would have continued under the record deficit which we have. That is one reason for cutting that deficit. But this run down in our reserves will not continue and it will not continue to offset the conequences of this high deficit.

The Opposition policy is a shambles. It has been demonstrated and judged by the Australian people to be a shambles. I should like to conclude not by further rebutting assertions of the Opposition but by quoting independent judges of the new Government’s policies. One is a large institutional investor who said in a circular to interested persons:

Corrective mechanisms are beginning to take effect with increasing liquidity reducing commercial interest rates and thus increasing the attractiveness of Government stock. There must therefore be some hope that the imminent loan-

This was written just before the loan was closed- will be well subscribed without any change in the present rate structure. It has appeared obvious for some time that bank overdraft rates would be reduced and current opinion strongly supports a change now. If this happens then bank term deposit rates will reduce, there will be flow on effects to Building Societies and a downward adjustment to Treasury Note rates. The present Government interest rate-

Mr Willis:

– Building Society rates went up.

Mr Willis:

– Building Society rates went up.

Mr MACPHEE:

– In New South Wales. The statement continues:

The present Government interest rate structure would look more attractive still in this context.

In answer to the honourable member for Gellibrand, what is important is the United States experience of about 18 months ago. There interest rates firmed when similar techniques to those which we have employed were applied but then, when the recovery came, slowly but surely interest rates fell. That can be what we look forward to- a slow recovery, a sure recovery in which for the time being interest rates will firm.

Mr DEPUTY SPEAKER (Mr Lucock)Order! The honourable member’s time has expired. The discussion is now concluded.

page 327

LOAN BILL 1976

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

Second Reading

Mr LYNCH:
Treasurer · Flinders · LP

– I move:

The purpose of this Bill is to provide part of the necessary legislative authority to meet a prospective deficit in the Consolidated Revenue Fund in 1975-76. A further Bill which I will be introducing shortly, the Loan Bill (No. 2) 1976, will provide the further legislative authority required to complete the financing of the deficiency in that fund. The borrowing authority provided for in this Bill and the Loan Bill (No. 2) 1976 to which I have referred is also required for the financing of the overall Budget deficit for the year. Many honourable members will, no doubt, recall that the previous Government introduced legislation into Parliament in August 1975 designed, at the time, to serve similar purposes. I refer to the Loan Bill 1975. In the event, that Bill was not passed before the dissolution of Parliament but a great deal of detailed and useful information on Loan Acts, their purposes and form, was made available to the Parliament particularly in response to questions raised in the Senate. Much of that information remains relevant to these Bills.

Obviously the Budget deficit of the Commonwealth must be financed in one way or another. Except insofar as funds are available from sources such as accumulated cash balances or other minor financing transactions the deficit must be financed by net borrowings undertaken within proper authority from the Parliament and, as necessary, from the Australian Loan Council. Underlying that overall picture is the legal division, as provided in the Audit Act, of the Commonwealth’s accounts into 3 separate funds- the Consolidated Revenue Fund, the Loan Fund and the Trust Fund. The amounts which may be paid from any of these funds is limited to the amount legally available to that fund.

The overall deficit for the year was estimated at $2.8 billion when the Budget for 1975-76 was tabled by the previous Government. Within the total there was an estimated deficiency of $ 1 . 1 5 billion in the Consolidated Revenue Fund after allowing for expenditures on a number of programs such as capital assistance grants and housing assistance to the States to be charged to Loan Fund rather than the Consolidated Revenue Fund. The Loan Bill proposed by our predecessors was designed to overcome that prospective deficiency in the Consolidated Revenue Fund by authorising the transfer of defence expenditures to Loan Fund to the extent necessary for this purpose. These transferred expenditures were to be financed by borrowings for defence purposes. Such borrowings do not require Loan Council approval.

However, it soon became very clear that the prospective overall deficit and the deficiency in the consolidated revenue fund had been grossly under-stated. By December it was apparent that the overall deficit for the year could exceed $4.5 billion, with the Consolidated Revenue Fund deficiency showing a similar increase. With subsequent revisions of the Budget estimates, and before allowing for the Government’s recent measures of expenditure restraint an overall deficit of the order of $4.7 billion and a deficit of close to $3 billion in the Consolidated Revenue Fund were in prospect. While this Government has moved quickly and vigorously to contain expenditure and rein in the unconscionably large deficit we inherited, there are clearly limits to the reductions in planned expenditures that can be effected within a relatively short period.

With only a few months remaining of the financial year, and a deficit of over $4 billion for the first 7 months already recorded, it is inevitable that the deficit for the year as a whole will be very considerably greater than was originally envisaged. The deficiency in the Consolidated Revenue Fund is similarly inflated. It is, essentially, the prospective Consolidated Revenue

Fund Deficiency that creates the financing problem. Appropriate legislative authority is required to enable the Government to overcome the prospective shortfall in that fund before the end of the financial year. This can be achieved in 2 broad ways. One is by transferring further expenditures from the Consolidated Revenue Fund to the Loan Fund where they can be financed from borrowing; the other is by supplementing Consolidated Revenue Fund receipts through payment of moneys into that Fund from the Loan Fund or from the Trust Fund. When adequate legislative authority is available for borrowings to cover the potential deficiency in the Con.colidated Revenue Fund and borrowings to cover expenditures which would be in any case charged to Loan Fund, there will be adequate legislative authority to complete the financing of the overall deficit.

The Government has carefully examined the options available to it to meet the difficult deficit situation it has inherited and it has decided on a package of 3 measures. First, we propose to supplement Consolidated Revenue Fund receipts, and thereby reduce the size of the prospective Consolidated Revenue Fund deficiency, by paying into that Fund unrequired balances held in the National Welfare Fund Trust Account. These balances amount to some $470m and are currently invested in internal Treasury Bills. While this measure requires no legislative action, it is, I believe, appropriate it should be the subject of information to the Parliament. Under the provisions of the National Welfare Fund Act the balances held by the National Welfare Fund Trust Account cannot be spent directly from the Fund. The 1952 amendment to the National Welfare Fund Act provided a standing appropriation for the automatic replenishment of the National’ Welfare Fund Trust Account in respect of any moneys paid from the account for social services. This means that as moneys are paid out they are simultaneously recouped from special appropriations of the Consolidated Revenue Fund. Obviously, in these circumstances, no working balance is required in the Trust Account. The Audit Act provides a procedure whereby moneys not required for the purposes of a Trust Account may be transferred to the Consolidated Revenue Fund upon determination by the Treasurer. I intend that the internal treasury bill holdings of the National Welfare Fund Trust Account be redeemed. The cash resulting from the redemption of the internal treasury bills will be paid direct to the consolidated Revenue Fund. It is, of course, from the Consolidated

Revenue Fund that all expenditures on social security are now met.

The second measure proposed is represented by the Loan Bill 1976.

Mr Crean:

– What effect will this juggling have on inflation? Tell us what effect it will have.

Mr LYNCH:

– The honourable gentleman is very much aware that the problem of financing the deficit which is addressed in the series of Bills before the House derives directly from the actions taken by himself and his colleagues. It is regrettable that this matter is before the House, but it is the problem that we have before us as a direct consequence of past action. I respect the honourable gentleman’s borrowings to these matters, but I hope that he will contain himself. Whatever new rays of light and truth he wishes to add to these very complex and technical matters will be within his purview when the matters are subject to the second reading debate.

Mr Crean:

– I am pleased to see you are learning some sense.

Mr LYNCH:

– As has been said in this Parliament on many occasions in the past, the traditional procedure adopted by successive governments to cope with a prospective deficiency in the Consolidated Revenue Fund has been to charge defence expenditures to the Loan Fund and to borrow to finance the expenditures so transferred. If I may say so in passing, the honourable gentleman will well recall one or two marginal comments made across the table in relation to these matters in months gone by.

The Loan Bill 1976 is designed to permit this traditional procedure to be followed in the remaining months of this financial year. The Loan Bill authorises borrowings for defence purposes, but it does not authorise additional defence expenditures. It will simply allow the reallocation from the Consolidated Revenue Fund to the Loan Fund of Defence expenditures which are yet to be made and which are authorised by Parliament in Appropriation Act (No. 1 ) 1975-76 and in any additional Appropriation Acts for this financial year. In these respects the Loan Bill 1976 is similar to the Loan Bill 1975 introduced by the previous government. However, for the information of honourable gentlemen, I make it clear that there is one important point of contrast between the 2 pieces of legislation. The Bill proposed by our predecessors prescribed no specific monetary limit on the borrowings for defence purposes that could be undertaken under it, that is, outside the jurisdiction of the Loan Council. The Bill I am introducing contains a specific limit of $700m. I should make it clear that that limit is estimated to be sufficient to permit all relevant defence expenditure in the remaining months of the financial year to be charged to Loan Fund and financed by borrowings authorised under this Loan Bill 1976 after its enactment.

After allowing for the measures I have outlined so far, a substantial residual deficit in the Consolidated Revenue Fund could still be expected. To cover this deficiency a further Bill, the Loan Bill (No. 2) 1976, will be introduced to provide legislative authority to meet that residual deficit. In order to give honourable members the complete picture of the financing of the deficit I will outline the essential characteristics of the Loan Bill (No. 2) 1976 now. That loan bill to be introduced shortly will authorise the borrowing of such further amounts as are necessary to complete the financing of the Consolidated Revenue Fund deficit and the payment of the proceeds of these borrowings from the Loan Fund to the Consolidated Revenue Fund. I mention here that procedures of this type are of course not without precedent. The Loan Acts 1914 and 1931 each authorised borrowings for payment to the Consolidated Revenue Fund.

There is, inevitably, considerable uncertainty as to what size the residual deficiency in the consolidated revenue fund will be. It will depend upon the effects of future events on all receipts and expenditures of that fund. Even in the closing days of the financial year the final result can be heavily affected by, for example, the timing of receipts of large tax payments. For this reason the Loan Bill (No. 2) 1976 will not specify an upper numerical limit to the amount which may be borrowed. Instead, authority will be provided for the Treasurer to borrow such amounts as he considers to be the likely maximum necessary to avoid a deficit in the Consolidated Revenue Fund. Whilst this may on the surface appear to be no different to an open ended borrowing authority in a loan Bill authorising borrowing for defence purposes, there is in fact a very important difference.

Mr Crean:

– A very subtle difference.

Mr LYNCH:

-Well, I hope its subtlety will not be lost on my honourable and long respected friend on the Opposition benches. The borrowings under the Loan Bill (No. 2) 1976 will not be for defence purposes and will, as a consequence, have to be within the limit of borrowing authority approved for the Commonwealth by the Loan Council. In this regard I mention that, in order to ensure that the extent of borrowing authority available from the Loan Council will be fully adequate to cover borrowings under Loan Bill (No. 2) 1976, when it is enacted, I have already consulted other members of the Loan Council and have obtained their agreement to an appropriate increase being made in the approved borrowing program for the Commonwealth. Finally, I think I should make it clear that it is not expected that any of the borrowing authority in the proposed Loan Bill will be used to authorise overseas loan raisings.

The additional legislative authority given by the 2 Bills will be utilised as part of the legislative cover for the proceeds of public loan raisings allocated to the Commonwealth to the extent these are not charged against other specific authorities. In addition, these Bills will provide legislative cover for any necessary residual borrowings from the Reserve Bank. In line with the Government’s overall economic objectives, we will, in undertaking the borrowings required, continue to seek to achieve further sales of securities to the public, especially the non-bank public, to the extent that this can be done without impairing sound recovery of economic activity in the private sector.

In conclusion, I point out to honourable members that the procedures required to meet the Consolidated Revenue Fund deficiency and to complete the financing of the overall deficit are more complex than usual largely because of the very magnitude of the deficit problem we have inherited. While we are doing what is possible to rein in that deficit it cannot be rectified overnight. I commend the Bill to honourable members.

Debate (on motion by Mr Hurford) adjourned.

page 329

LOAN BILL (No. 2) 1976

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

Second Reading

Mr LYNCH:
Treasurer · Flinders · LP

– I move:

As I foreshadowed in my speech on the introduction of the Loan Bill 1976 the purpose of this Bill is to provide the necessary legislative authority to meet a residual deficiency which would remain in the Consolidated Revenue Fund in 1 975-76 in the absence of further legislative action and also to provide the necessary additional borrowing authority to complete the financing of the overall budget deficit for the year. Honourable members will recall that in my second reading speech introducing the Loan Bill 19761 outlined in some detail all of the measures proposed to meet the unprecedented deficit situation we have inherited. I explained the need for this second Loan Bill and discussed its characteristics. As I indicated then, this Bill authorises the borrowing of such further amounts as are necessary to complete the financing of the Consolidated Revenue Fund deficit and the payment of the proceeds of these borrowings from the Loan Fund to the Consolidated Revenue Fund.

The eventual size of the residual deficiency in the Consolidated Revenue Fund will depend upon the effects of future events on all receipts and expenditures of that fund. For this reason the Bill does not specify an upper numerical limit to the amount which may be borrowed. Instead, authority is provided for the Treasurer to borrow such amounts as he considers to be the likely maximum necessary to avoid a deficit in the Consolidated Revenue Fund.

Borrowings under this Bill are, however, subject to the jurisdiction of the Loan Council. They will, therefore, have to be within the limit of borrowing authority approved for the Commonwealth by that body. In this regard I mention that, in order to ensure that the extent of borrowing authority available from the Loan Council will be fully adequate to cover borrowings under Loan Bill (No. 2) 1976, when it is enacted, I have already consulted other members of the Loan Council and have obtained their agreement to an appropriate increase being made in the approved borrowing program for the Commonwealth.

Finally, I emphasise that this Bill does not authorise any additional expenditure apart from expenses of borrowing. The moneys raised under the Bill will be paid into the Consolidated Revenue Fund from which they will be used to finance general expenditures which have been authorised by appropriation Acts passed by Parliament. I commend the Bill to honourable members.

Debate (on motion by Mr Hurford) adjourned.

page 330

FINANCIAL AGREEMENT BILL 1976

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

Second Reading

Mr LYNCH:
Treasurer · Flinders · LP

– I move:

The purpose of the Financial Agreement Bill is to approve the execution of an agreement dated 5 February 1976 entered into by the Commonwealth of Australia and the 6 State Premiers to amend the Financial Agreement. The Agreement is attached as a schedule to the Bill. Section 105A of the Constitution provides that the Commonwealth may make agreements with the States with respect to public debt of the States, and further provides that any such agreement may be varied by the initiating parties.

The financial Agreement was entered into under section 105 A by the 7 governments in December 1927. It provided for the assumption by the Commonwealth of State debts on terms set out in the Agreement and established the Australian Loan Council to co-ordinate and regulate future Governmental borrowings. It also provided for standard sinking fund provisions on State debts. The provisions of the Agreement have been amended several times by subsequent agreements.

The present amendments are principally concerned with the assumption of liability by the Commonwealth Government for $ 1000m of State debt as envisaged under the States Grants (Debt Charges Assistance) Act 1970 but they also update and streamline the operation of other provisions of the Agreement. These amendments encompass new and simplified sinking fund provisions on State debt, greater flexibility in Loan Council procedures, and the removal of certain obsolete provisions from the Financial Agreement.

Takeover of Debt

The States Grants (Debt Charges Assistance) Act provided financial assistance to the States to meet interest and sinking funds contributions on $200m of State debt in 1970-1971 and on an additional $200m each year until, in 1974-75, the Commonwealth Government provided a grant to meet the debt charges on $ 1000m of State debt. At the time that Act was introduced it was envisaged that the debt concerned would be formally transferred to the Commonwealth Government in June 1975. However, the Act itself made no provision for the formal transfer of the debt which requires legislative approval by the Commonwealth Parliament and all State Parliaments. It was agreed by the Australian Loan Council at its meeting in June 1974 that assumption by the Commonwealth Government of liability for the $ 1000m of State debt should be effected by amendment to the Financial Agreement. The securities to be taken over by the Commonwealth Government are set out in a schedule attached to the amending agreement.

Sinking Fund Provisions

The Sinking Fund provisions of the 1927 Financial Agreement provided for contributions in relation to State debt outstanding at 30 June 1927 as set out in the Agreement. Contributions on new debt were based on each loan issued on behalf of the States since 1927, involving voluminous and complex calculations on behalf of each State each year. The contributions on State debt outstanding at 30 June 1927 were due to cease at 30 June 1985-1986 for New South Wales- and the new provisions take into account the reduction in contributions which would have been consequent upon this.

The new rates of contribution have been calculated to provide Sinking Fund receipts comparable to the projected amounts payable under the previous arrangements and no State will incur any additional costs compared with those arising under the previous arrangements. More specifically, the new Sinking Fund arrangements on State debt provide for specified contributions by the Commonwealth and State governments for 1975-76 adjusted in subsequent years until 1984-85-1985-86 for New South Wales-by a percentage of the difference in net State debt outstanding at 30 June of the year preceding the contribution and net debt outstanding at 30 June 1975. As from and including 1985-86-1986-87 in the case of New South Wales- annual contributions payable by each State will equal 0.85 per cent and by the Commonwealth 0.28 per cent of net debt of each State outstanding at the preceding 30 June. This avoids the complexities inherent in linking Sinking Fund payments to the securities issued in each loan on behalf of the States. Accounting procedures for expenditure under the new Sinking Fund arrangements have been greatly simplified with all costs, such as brokerage and commission, associated with the repurchase or redemption of State debt being a charge on the Sinking Fund.

Other provisions remain substantially the same as previously. The States may make additional Sinking Fund contributions if they wish: Some States contribute at a rate to extinguish the debt incurred in connection with a wasting asset over the life of the Asset. The National Debt Commission will continue to control the State sinking funds but can arrange with a State to act as its agent in making payments to bondholders. The new provisions will provide for effective and relatively simply calculated payments for the retirement of state debt.

Loan Council Procedures

Some amendments have been made to the Agreement to expedite proceedings of the Australian Loan Council. These provide that the nomination by a member of the Loan Council of a substitute Minister as his representative will now include any person acting in that capacity for the time being, and that decisions by the Loan Council on the amount and allocation of Government loan programs can now be made by correspondence without the necessity to hold a formal meeting to endorse the decision. The amending agreement provides for the omission of several clauses in the financial agreement which no longer have force. Also included is a provision for retrospective effect of the agreement from 30 June 1975. The agreement cannot be operative until legislation to approve its execution is enacted by all parliaments. I commend the Bill to honourable members.

Debate (on motion by Mr Hurford) adjourned.

page 331

NATIONAL DEBT SINKING FUND AMENDMENT BILL 1976

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

Second Reading

Mr LYNCH:
Treasury · Flinders · LP

-! move:

That the Bill be now read a second time.

The purpose of the National Debt Sinking Fund Bill is to amend the National Debt Sinking Fund Act 1966-1967 to take account of State debt which will be assumed by the Commonwealth under the proposed amendments to the financial Agreement and any other agreement approved by Parliament. This proposal is of course closely related to amendment to the Financial Agreement to be ratified by the Financial Agreement Bill 1976 which is before the House. The Bill redefines debt of the Commonwealth to include debt of the States taken over by the Commonwealth and provides that these debts be taken into consideration in calculating the Sinking Fund contribution on Commonwealth debt. It also provides that Commonwealth Sinking Fund moneys may be applied in the retirement of this debt.

A new sub-clause has been introduced to bring accounting procedures in relation to the Commonwealth Sinking Fund into line with procedures for State sinking funds which the Financial Agreement Bill is designed to establish. In effect this provides that the full cost of repurchase or redemption of securities may be met from Sinking Fund. Furthermore, securities repurchased or redeemed from the sinking fund will be deemed to be cancelled from the date of repurchase or redemption. The opportunity has been taken to amend, in the schedule, the expression of the Act to conform with current practice by omitting repetitious phrases where they occur and substituting numerals for written numbers. I commend the Bill to honourable members.

Debate (on motion by Mr Hurford) adjourned.

page 332

WHEAT INDUSTRY STABILISATION AMENDMENT BILL 1976

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

Second Reading

Mr SINCLAIR:
Minister for Primary Industry · New England · NCP/NP

– I move:

That the Bill be now read a second time.

Mr Ian Robinson:
COWPER, NEW SOUTH WALES · CP; NCP from May 1975

– I compliment you on this the first occasion on which you sit in your present position in this Parliament.

The primary purpose of this Bill is to include an allowance for the labour of owner-operators of wheat farms in the specified cost items used to determine annual movements in the home consumption price of wheat under the current sixth Wheat Industry Stabilisation Plan. Honourable members will recall that this legislation reached the second reading stage in the House last November but lapsed when Parliament was dissolved. An owner-operator allowance has been included in home consumption price adjustment procedures in previous wheat stabilisation plans, although the basis of calculating this allowance and the method of inclusion has varied, and varied significantly. In the first 4 plans it was adjusted annually along with all items in the index to determine movements in the home consumption price. In the fifth plan it was one of a collection of items which were held constant in the index for the duration of the plan.

One of the changes at the commencement of the sixth plan was the exclusion of those cost items which had been held constant during the previous plan from the index structure used to calculate movements in the home consumption price. The owner-operator allowance was one of those items. However, at the same time the then Government gave an undertaking that the decision with respect to that allowance would be reviewed prior to the second year of the plan, 1975-76. As a result of this review it was decided to include in the cost items used to adjust the home consumption price of wheat an item representing the cost of the owner-operator labour input into the wheat enterprise. The decision gained the acceptance of the Australian Wheatgrowers’ Federation and was endorsed by all State governments as parties to the complementary legislative arrangements supporting the orderly marketing and stabilisation scheme for wheat. Information collected by the Bureau of Agricultural Economics in its wheat industry survey will be used to ascertain the owneroperator physical labour input into the wheat enterprise. This will then be costed, using appropriate rural wage awards, and the annual movements in this item included with the movements in cash costs and rail freight and handling charges that are taken into account in the annual review of the home consumption price of wheat.

The Bill before the House is virtually identical with that previously introduced except in one respect. If the original legislative proposals had been passed in the normal course the determination which has since been made of the home consumption price of wheat for the year commencing 1 December would have included an amount of 62c per tonne, being the amount calculated by the Bureau of Agricultural Economics and accepted by the Wheat Index Committee as the labour allowance for owner-operators of wheat farm enterprises. Since it is impracticable to provide for retroactive application of such allowance in the purchase price of wheat it is now proposed under the provisions of clause 4 of the Bill that the home consumption price will be increased by 62c per tonne effective from the day following the date of receipt of the royal assent.

Concurrent with the introduction of amending legislation for the purpose described above, opportunity is being taken by the accompanying Wheat Export Charge Amendment Bill to effect a machinery amendment to the definition of ‘wheat products’ at present in section 4 of the Wheat Industry Stabilisation Act. The opinion of the First Parliamentary Counsel is that this definition should reside in the Wheat Export Charge Act. Clause 3 of the Bill effects this transfer. I commend the Bill.

Debate (on motion by Mr Keating) adjourned.

page 332

WHEAT EXPORT CHARGE AMENDMENT BILL 1976

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

Second Reading

Mr SINCLAIR:
Minister for Primary Industry · New England · NCP/NP

– I move:

This Bill, complementary to the Wheat Industry Stabilisation Amendment Bill 1976, is a minor measure of a machinery nature to expand the definition of ‘wheat products’ as presently contained in the Wheat Industry Stabilisation Act 1974 and to transplant the definition to the Wheat Export Charge Act. That Act imposes levies on exports of wheat and wheat products, under defined circumstances, the proceeds of which are used to support the operation of the Wheat Prices Stabilisation Fund.

The existing definition, which includes within the jurisdiction of the Australian Wheat Board commodities ‘produced mainly from wheat or other wheat products’, has been found in the light of experience to be potentially deficient in that the Board may not be able to exercise its powers and functions in relation to exports of certain commodities produced partly from wheat or wheat products, in particular stockfeed and petfeed preparations. Thus, the existing definition has been expanded by clause 3 of the Bill to cover by regulations when desirable, the prescription of substances produced partly but not mainly from wheat or wheat products. The opinion of the First Parliamentary Counsel is that the definition should more properly reside in the Wheat Export Charge Act than in the Wheat Industry Stabilisation Act. Clause 3 brings this about. I commend the Bill to the Parliament.

Debate (on motion by Mr Keating) adjourned.

page 333

WHEAT PRODUCTS EXPORT ADJUSTMENT AMENDMENT BILL 1976

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

Second Reading

Mr SINCLAIR:
Minister for Primary Industry · New England · NCP/NP

– I move:

This Bill is complementary to the Wheat Industry Stabilisation Amendment Bill 1976 and the Wheat Export Charge Amendment Bill 1976. The Wheat Products Export Adjustment Act, which this Bill amends, authorises the Australian Wheat Board, in connection with the collection of the export charge under the Wheat Export Charge Act, to require exporters of wheat products to pay to the Board the difference between the export price and the home consumption price of wheat when the former exceeds the latter.

This Bill proposes minor machinery amendments consequent upon the definition of ‘wheat products’ being transferred by the 2 Bills it accompanies from the Wheat Industry stabilisation Act to the Wheat Export Charge Act. I commend the Bill to the Parliament.

Debate (on motion by Mr Keating) adjourned.

page 333

MEAT EXPORT CHARGE AMENDMENT BILL 1976

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

Second Reading

Mr SINCLAIR:
Minister for Primary Industry · New England · NCP/NP

– I move:

The purpose of this Bill is to suspend the meat export charge from 1 March 1976. The legislation under which the charge is imposed was introduced in November 1973 and is due to expire in June 1976. Currently the charge is leper lb on exports of meat and edible offal and is intended to recoup the cost to the Government of export meat inspection. In addition there is a further charge of 0.6c per lb on beef and veal only for the purpose of recouping the Government’s contribution to the brucellosis and tuberculosis eradication campaign.

When the Meat Export Charge legislation was passed in 1973 it was true that world demand for meat was strong and prices, especially for beef, were at extremely high levels. As a result there was the capacity within the industry for producers to meet the higher charges that this levy represented. But these circumstances, of course, are in quite marked contrast to the present situation in which there are restrictions on imports of meat in many of our major overseas markets. Furthermore, prices for beef have been depressed for a prolonged period, and despite some improvement in recent months generally remain very, very low. Of course, at the same time inflating costs have seriously affected all sectors of the industry. As a result for more than 12 months the financial position of producers has been and regrettably continues to be very serious, particularly I might add in areas where beef cattle production is the predominant source of income.

Following its examination of the difficult situation facing the beef industry, the Industries Assistance Commission made a number of recommendations on assistance to cattle producers.

One of the recommendations was to suspend the export charge on beef and veal. In recognition of the serious financial plight facing the industry the coalition parties undertook to implement this recommendation in their election policy program. The Government has now decided to go further and to remove the charge on all meats, not just on beef and veal. The purpose is to ensure that there should be an immediate improvement in prices paid for livestock. For this reason, while the immediate benefit will be to exporters it is expected that to the maximum the benefit will be passed on to producers as a result of the lifting of these charges. Producers alone have been subject to a total inability to pass on increases in costs. Everyone else in the chain has been able to do so through one mechanism or another- the wage earner through conciliation and arbitration, the processors through lifting their prices and of course the charges to producers for killing. Ultimately the distributors and the retailers have been able to pass on charges as they have affected them. The producer has not been able to do so. So in lifting this charge the Government is hopeful that to the maximum the benefit will be passed on to producers. It of course would not be tenable that producers should now be denied the benefit of the lifting in the export charge because others along the line who in the past have been insulated against these charges refused to pass it on.

The Government, of course, is acutely aware of the importance to the meat industry of export meat inspection services and of the brucellosis and tuberculosis eradication campaign. It is our intention that the removal of the export charge will not affect the services provided. It is our obvious concern to ensure that in places like the Northern Territory where there is a particular dependence upon income from cattle we should be able both to maintain the eradication campaign and also to assist returns to producers so that those in the remote and isolated beef producing areas of Northern Australia can continue to survive in spite of the exigencies of rising costs and contracting markets.

In respect to the eradication campaign, I have already announced that the Government intends to introduce a levy of $1 per head on cattle slaughtered in Australia from 1 July next. The funds from this will be used to offset the Government ‘s contribution to the campaign. This slaughter levy will be effected by separate legislation to be introduced in the current session of Parliament. The revenue from the $1 per head slaughter levy will in a year raise approximately the same amount as the 0.6c per lb export charge.

It is believed that by spreading the charge over all cattle slaughtered it will be more equitably shared, that is, the cost of eradication will be borne by all sections of the industry as it is all sections of the industry, not only overseas consumers but those in Australia too, who will ultimately benefit from it. It is our intention therefore in the presentation of this Bill to try to assist significantly producers by the passing on of the benefit to them but at the same time to ensure that there should be no reduction in the eradication of disease which has been undertaken by a joint Commonwealth-State program. Rather it is intended that we should accelerate that program. To enable us to do so we intend after 1 July to replace the present levy, but as to only 0.6c of it, with a new levy based on a different premise, that is $1 per head on cattle slaughtered. I commend the Bill in its present form to the House.

Debate (on motion by Mr Keating) adjourned.

Sitting suspended from 1 to 2.15 p.m. CHILDREN’S COMMISSION

Mr MALCOLM FRASER:
Prime Minister · Wannon · LP

- Mr Deputy Speaker, I seek leave to answer a question asked this morning about the Schools Commission.

Mr DEPUTY SPEAKER (Mr Lucock:

-Is leave granted? There being no objection, leave is granted.

Mr MALCOLM FRASER:

-The question that the honourable member for Lalor (Dr J. F. Cairns) asked this morning concerned the Interim Committee for the Children’s Commission, not the Schools Commission. I think there might have been some misunderstanding in his question on that point. He suggested that 30 Victorian child care centres might have to close but I am advised by the Interim Committee that the figure would be five. These five have submitted applications to the Children’s Commission and their applications are being examined at the moment. I stress that the Government has emphasised the importance of child care projects in what it has done. All existing commitments that had already been approved by the Commonwealth for the remainder of this year are being fully met. That is evident from Press statements that were issued on 4, 6 and 17 February. New centres that start before any formal approval for funding is available from the Commonwealth Government should not rely on automatic approval being given after they have in fact started. The safe thing to do, if they are dependent on Federal funding, is to make sure that approval is provided before they actually start operations and open their doors. There might have been in these 5 centres an assumption that funds would be available but certainly there was no approval from the previous Administration or from this Administration. In examining the 5 centres which it is suggested are in difficulty, we will certainly be looking at those which are in most need and are in needy areas where there is a particular requirement for child care centres. Grants for child care services for the remainder of this year will be announced by the Minister Assisting the Prime Minister in Child Care Matters (Senator Guilfoyle) in about a week. Some child care matters are currently under examination, but I repeat that the commitments that have been made have been fully met. I am advised that there are 5 centres, not 30, which are hoping to get funds for which approval has not been granted. Their applications are being considered at present.

page 335

STATES GRANTS (CAPITAL ASSISTANCE) BILL 1976

Second Reading

Debate resumed from 19 February on motion by Mr Lynch:

That the Bill be now read a second time.

Mr HURFORD:
Adelaide

-The Opposition is not opposing the passage of this Bill through the Parliament. The States Grants (Capital Assistance) Bill 1 976 is identical, except in respect of the year cited in the title, to a Bill which was before the House last October. Because of the outrages in Australian politics which happened in November it was not possible for the original Bill to become law before the dissolution of the Parliament. It passed through this House but not through the Senate. The Bill is one of a series presented since 1970 designed to reduce the public debt of the States by substituting part of the States’ Loan Council borrowings with an interest-free grant. It authorises the payment of over $430m by way of grant rather than repayable loan. In this way the interest burden on the States arising from their public debt has been considerably lessened. During the time of the Labor Government these grants increased markedly as a proportion of the total works and housing program. They rose from 24 per cent in 1970-71 to over 37 per cent in 1974-75. These grants are not tied to any specific purpose and are used by the States to expand their works programs and so create employment. They also create other benefits for the community. It is of great benefit for the States that none of the funds has to be expended on interest payments. This generosity to the States demonstrated the real concern of the Labor Government for the financial welfare of the States. Certainly in South Australia the State Government realises that it never had it so good as it did under Labor. The amount involved is in 2 parts. Firstly, included in the $430m is the grant component of the State Goverments’ Loan Council program for the current financial year 1975-76. That grant component is one-third of the total program. Secondly, the amount in this Bill provides for payment of a capital grant for the financial year 1976-77 so that the States are in funds for the first half of the next financial year. The 1 976-77 amount is one-half of that amount which is appropriated by means of this Bill for 1 975-76. It is interesting to note that on the admission of the Treasurer (Mr Lynch) the funds available to the States through this Bill are worth more in real terms than they were at the time the amount was decided upon. This is a tribute to the economic policies of the Australian Labor Government. The rate of inflation was not as great as it was expected to be at the time of the Premiers Conference. I quote from the Treasurer’s second reading speech: … the capital grants . . .are now estimated to be worth more in terms of actual works and services than at the time they were settled at the Premiers Conference-Loan Council meeting in June 1975. This is because cost increases have proved to be significantly less than estimated at that time.

In the debate on a matter of public importance earlier today I mentioned that because of Labor’s policies the country was slowly recovering from the twin economic ills of inflation and unemployment. That recovery has been put in jeopardy, as was said in that debate, by certain economic policies followed since 13 December. This Bill opens up the whole area of Australian Government-State Government financial relationships. Recently we had the phenomenon of a Premiers Conference devoted to this subject. From my readings of the available papers I must make these comments about that Conference. (Quorum formed) Firstly, I believe that the Fraser Government had not and probably has not thought through the details of its revenue sharing scheme. I noted that the Prime Minister (Mr Malcolm Fraser) and Treasurer were not able at that Premiers Conference to answer specific important, indeed vital, questions on the subjects put to them by Premiers from each of the States. They are negligent, in my opinion, in having launched such a scheme on the Australian public without thinking through the proposals in the way that they should be thought through. Secondly, if their scheme ever sees the light of day there is no real guarantee that the

Australian Government will not alter the tax rate structure or assessment provisions and thereby adversely affect the revenues of the States. Thirdly, I point out that there is no real fail-safe figure for the States and no guarantee of the amounts that they would get if the Australian Government were, for instance, to adopt the Asprey Committee’s recommendations, reduce the comparative incidence of income tax and enter the value added tax field.

If the Australian Government turned to indirect taxes rather than direct taxes, under the provisions of the new scheme the States would be decidedly worse off.

Mr Bourchier:

– You are very dreary.

Mr HURFORD:

– If you think that this is an extraordinarily interesting subject then I challenge you to get up and say something on it. Fourthly, the States own income tax assessment, or surcharge as it is apparently called, can be imposed only ‘in a framework of consultation’. I might say that I am quoting words uttered by Liberal Prime Ministers and Treasurers, so it is no wonder that I am being dreary. No information was given to the Premiers Conference on the nature of this consultation. My fifth point is that the Premiers Conference proceedings showed that there is no provision for continuation of the benefit factor as there is of course in the present formula.

In short, the Liberal-National Country Party proposals raise more questions than they answer. I reserve my judgment on the total of the proposals at this stage other than to say that the whole deal seems to me to be a singular piece of unnecessary and wasteful window dressing. As a principle I like the idea that those who have to bear the odium of raising funds, of raising taxes, should be the ones who spend them. Also I support the idea of as much decentralisation of decision making as can be reconciled with efficiency, but I believe there are far better ways of achieving this than is provided in the present Government’s ‘proposals as we know them at present. However, judgment will be reserved and the Opposition’s positive thoughts on the subject will unfold over the next year.

The Opposition welcomes the financial help available to the States in this measure before the House. I repeat that this Bill is our own Australian Labor Government Bill. We hope it has a speedy passage and that there will not be too much emotional nonsense talked about States’ rights and associated matters from the Government benches during this debate, which nonsense would delay the passage of this essential measure through the Parliament and would not add to the body of knowledge. The Opposition supports the passage of this Bill.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

-I shall not speak to this measure at great length either. I know that the House will be delighted indeed to learn that. Nevertheless there are one or two points that need to be made, points which became obvious in almost the first words which were enunciated by the honourable member for Adelaide (Mr Hurford) who is the shadow Treasurer. During the last election campaign the Labor Government got itself into a bind in being severely anti-State, in having starved the States of funds and so on. Yet the honourable member was able to assert, quite correctly, that this Bill is pre-eminently a product of the previous Government which was in office until 1 3 December. This Bill is not ungenerous to the States, but the Labor Party got itself into such an ideological bind that it was fairly generous in terms of this measure if the States felt that they were aggrieved. That is merely an indication of a very poor sense of policy in getting its story over to the people of Australia. It is a confession of regrettable failure on the part of politicians. They do not understand the business.

Mr Hurford:

– Will the States not always feel aggrieved?

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

-Oh no, they are always happy with us because they always understand the position. If honourable members look at the back benchers in this place they will see the honourable member for Farrer (Mr Fife) and they will know that when he was a State Minister he was always magnificently most generous in praise of all the assistance that the Commonwealth gave his State. There would not be an honourable member here from New South Wales who would not confess to that fact immediately. If I may go into the history of this matter a little bit, it runs from 1927-28 to the end of the 1 960s. It was quite simple. Almost during the totality of that time the debt which accrued to the States and which the States had to meet increased many times while the Commonwealth by various means was able to rid itself of its own debt. So by the end of the 1960s the States got themselves into a quite intolerable situation and the Commonwealth worked free of net debt. I leave out of that the very great difficulties of calculating net debt. So in 1970 under a previous Prime Minister at the Premiers Conference in the middle of the year 2 measures were undertaken. One measure was to make available to the States a certain amount of funds in lieu of loan funds so that the States could undertake public works programs which were not revenue producing programs and another undertaking was given to wipe off, I think, $ 1 ,000m of State debt.

The proposal in this legislation is part of the first section of the package and involves something like $430m which is being given to the States in this package. The Treasurer (Mr Lynch) is quite correct and the honourable member for Adelaide is also quite correct in saying that this is generous and in fact will be worth much more in the course of the whole year than it was presumed to be worth at the beginning of the 1975-76 financial year. Nevertheless, it ought to be remembered in accounting for the rates of inflation on public works which this measure has to do that the rates of inflation on public works are always higher than the rates of inflation felt generally in the community. That occurs for a variety of reasons. I can see that you, Mr Speaker, are vitally interested in this matter.

Mr SPEAKER:

-To demonstrate my interest I will take the opportunity now of interrupting the honourable member.

Debate interrupted.

page 337

DISTINGUISHED VISITORS

Mr SPEAKER:

– I have to inform the House that we have present in the Gallery this afternoon a parliamentary delegation from France led by M. Edouard Schloesing, a Vice President of the National Assembly. The delegation is visiting Australia at the invitation of our own Parliament. On behalf of the House I extend a very warm welcome to members of the delegation.

page 337

STATES GRANTS (CAPITAL ASSISTANCE) BILL 1976

Second Reading

Debate resumed.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– This is the first package involving those 2 proposals which have now existed for 5 years. The second one to meet the net debt of the States will, I understand, be discontinued this year. This package will continue in subsequent years. There is one other matter which I would like to bring up in relation to it. I refer to proposals of equity which occur between the various States and the Commonwealth. I request the Minister Assisting the Treasurer (Mr Eric Robinson) to consider this matter so that he might answer the proposition when he winds up this debate. The funds which are divided between the States under this Bill and in accordance with the terms of the Schedule at the back of the Bill are divided, as I see it, according to the loan programs of the States for which the Commonwealth assumes responsibility. That means of course that that assistance- that bonus which is given to the States as grants and because of the difference in the interest rate on the debt and the rate of inflation in the community will result in a differential rate of assistance as between the various States. I think that becomes obvious immediately. But it also means that it has great significance for any policy of federalism which is designed to secure equity and fairness -as between the different States of the Commonwealth.

I think that we have a problem here because loan programs and the debt charges on loan programs are matters which have largely been ignored in relations with the States. Because those loan programs of the States are determined very much on an historical basis there is a very great disparity in the loan programs allowed for the States. They are not concerned with financial assistance grants. They are not determined on the basis of the equalisation formula. They are determined very much on the basis of what has happened in the past. Therefore it means that the assistance given to States by way of grants and the assistance given by way of the differential interest rates on them compared with interest rates in the community apply very differently between the States of Australia. As this amount of $430m will increase in the future I want to know- I request the Minister to consider this matter very carefully and give a response- how this is to be determined in looking at horizontal equity between the States of Australia. I think I make the point quite clear. It is quite different from a loan program. It is effectively a grant program.

To indicate that the matter is not very easy of solution, I turn to the considerations of these matters which have been undertaken by the Grants Commission over the years. This is one of the most expert bodies on domestic economic conditions in Australia. It is unique in its effectiveness to the Australian Federation. Let me refer to the 1974 Grants Commission Report on Special Assistance for States. In its consideration of debt charges the Commission had this to say at page 87:

This raises the problem of how to compare the budgetary impact of the treatment of depreciation, replacement and maintenance of the assets of State business undertakings. The Commission has been trying to find a satisfactory basis for assessing the impact of railway depreciation on the various State budgets but has not extended its inquiries to other undertakings.

At the end of that section the Commission said:

Where the reduction in loan expenditure is considered to relate to assets for which there would be a partial recovery of debt charges, the exclusion will be on a proportionate basis.

I think that this is the crucial sentence:

However, the Commission, will use broad judgment in deciding the extent to which the different policies and practices of the States have led to different levels of unrecouped debt charges.

It is quite clear from the considerations of the Commission in 1974 and from a further consideration of the Commission in 1975 that this problem has not been solved. Due to the magnitude of the funds involved- I presume that it will be approaching $500m this year- there ought to be a quick solution to the problem because these advantages bear very differentially as between the different States and different parts of Australia. I do not want to be parochial but I would mention that Queensland has always done very badly under the loan program. I say that by way of interpolation. In its 1975 report the Commission said:

The Australian Treasury, in its submission at the Canberra hearings in April 197S, stated that it was unable to add to its previous submissions on this matter. The Commission has summarised and discussed these submissions in previous reports.

So the problem has not been solved, but the problem is a growing one and I believe it is one that cannot be ignored. It concerns what is concerning many people in many parts of Australia. There has been a magnificent tradition in this country, which will be maintained and which we all hope will be improved, of equity between the people in the various parts of Australia. To ignore this assistance in Loan programs is to ignore something that is growing in quantity and in proportionate significance. It has a very great deal to do with equity between public capital work undertakings in various parts of the Commonwealth.

I have been asked not to speak for too long, but I want to make one other point which I think has to be made. It is simply this: In respect of the debt charges which will he upon the Commonwealth and for which the Commonwealth ultimately takes responsibility there is one matter that deserves attention again. I have mentioned it previously. Australia’s debt problems have increased. The loans which are raised and which help in the matter of meeting the loan programs, the conversions and the maturing of those loans will be a matter of great comment and a matter of great concern to this nation. At the end of last year- it has continued into 1976- the amount of loans maturing in Australia on a short term basis was both absolutely and proportionately the highest in the nation’s history. It is a reflection of expectations concerning the rates of inflation over recent years. Australian savings bonds have not altered that situation. Some may say that it has just been a victim of the circumstances of the time and of the negotiation for short term debt as well.

I hope that when the Commonwealth considers the totality of its debt program and the responsibilities it has for meeting that debt program and a conversion of that debt it will consider what effect the coming to maturity of short term debt can have on the money supply in Australia. The debt which is coming to maturity, and which will come to maturity at favourable interest rates over the next 20 months, is the greatest in the history of the country. It represents a greater problem in terms of the maturing debt than it did for the poor, benighted Scullin Government of the early 1930s. Therefore I hope that the Minister Assisting the Treasurer will bring that matter to the attention of the Treasurer- I know that the Treasurer will take very great notice of what he says- and to the economic committee of Cabinet.

I return to where I began. The effects of this matter are very great in relation to fairness between the different States of Australia. Those effects will grow. The way in which they will fit into matters of horizontal equity between the various States of Australia cannot be ignored. I hope that, in all fairness, assurances will be given as quickly as possible- perhaps during the debate on this Bill.

Mr CADMAN:
Mitchell

-I rise to speak briefly in this debate because this is a topic which will have a vast effect on the relationship between governments in Australia when the proposals and policies of the coalition Government are implemented. It seems to me, looking back over 3 years of Labor administration in this area, that its thinking was as confused as the Opposition’s spokesman on Treasury matters. The honourable member for Adelaide (Mr Hurford), claimed that the Government’s thinking is confused. I think that what the previous Government tried to achieve may have been well intentioned but it bogged down. It went wrong. There was too much control from Canberra. People in State and local government felt that it was no longer their responsibility to look after the areas for which they had been elected. They started to turn off what was happening down here. Then they became critical because they thought that the wish to achieve more for the community was indeed a wish to control more. That may well be so because I think there is an element within the

Australian Labor Party that would wish to control and would wish to say: ‘Let the decisions be made here’.

The program as the former Government implemented it involved a fourth tier of government that did not come into being. It would have been a fourth tier dispensing with States and with the responsibility of local government. Overriding the lot there was the establishment of a massive bureaucracy in Canberra. This bureaucracy and the demands made from Canberra increased the demands for decisions and for presentation of submissions, on both State and local government bodies. The previous Government was looking for and trying to implement a philosophy rather than a practical thought-through approach.

The details of our program are not available but the program has been thought through. The capacity for each level of government to truly represent the people and to make decisions which they have been elected to make is the crux. If you try to claim power for ourselves everybody will pull you down. I think that the previous Government tried to claim power for itself. In that regard it completely failed. If it had gone about its program in another way it may have been successful. This Government has cut all those ties and has said: ‘We are not going even to look at your approach because we feel it was the wrong approach. We feel it was absolutely centralist and failed to get the involvement and participation of Australians’. The previous Government could well have drawn on the great capacity of individuals in Australia in order to achieve its programs if it had so desired.

The Opposition says now: ‘Our thoughts will unfold over the next few months’. What has it thought through? It knows it has failed in its programs. It knows they will not work. It knows it had almost every State in Australia crying out for better understanding, less control and more assistance. The States realised that the Federal Government was collecting more money in Canberra as a result of inflation but that they were not seeing their right share of the action. One cannot blame them in view of their increasing costs and charges for acting in the way they acted. The Opposition now says that it has not thought through its programs but they will unfold as the months pass. No doubt these thoughts will be reactions to the programs presented by the present Government. That is unfortunate. Instead of raising again the programs rejected by the electorate I suggest that the Opposition start thinking about new and positive programs and provide the Government with the sort of stimulus that is needed to make this Parliament effective on behalf of the citizens of Australia.

The previous speaker, the honourable member for Lilley (Mr Kevin Cairns) mentioned the Commonwealth Grants Commission. I suggest that the Grants Commission might well be a fine starting place for the consideration of the balance of payments between the States. In the previous 2 financial years, 1974-75 and 1975-76, it is interesting to note the balance of reimbursements by way of borrowings and capital grants to the States. It would seem that the fine balance has not varied over many years. Some States by being particularly aggressive may acquire some slight advantage at different times but generally speaking the balance is maintained. New South Wales generally receives something like 3 1 per cent of the allocation, Victoria 25 per cent, and South Australia 1 3 per cent each, Western Australia 9 per cent and Tasmania something like 7 per cent. These are traditional proportions of a total figure, each State receiving a percentage. I do not think that the problems of collection, who contributes to the national wealth, distances, the difficulties of providing services in remote areas and the cost of providing those services have been taken into consideration in any way in the assessment of these percentages.

The Grants Commission will look at the programs of all States, examine their Budgets and will bring forward proposals in such a way that the States can be free to make their own decisions instead of having funds provided under every Bill that passes through this House, as we saw in the last 3 years, assigned to a specific purpose. For instance, in the transport field New South Wales could not take funds provided for miles of railway track and use them to purchase carriages. That was not possible. The funds had been designated by the Federal Parliament for track and therefore the State could not use them for another purpose. Great discussion and debate took place. The percentage allocation of funds to the States needs to be assessed on the basis of the population of each State, the wealth produced in each State, the requirements, the public facilities and the interests and demands of the community. The way in which the allocation has been made in the past will not be successful now.

In the area of local government I felt that the Grants Commission was something of a disaster. Again, whilst the intention to supply funds to local government was good, the Grants Commission became a rate setting body for local government, and councils were falling over themselves trying to crack the formula that would give them money. They lifted their rates by up to 60 per cent to make themselves eligible to receive money from Canberra.

That did not work. It is not on. The Grants Commission went to these local government bodies and said: ‘We are sorry, you did the wrong thing. We really did not mean that you should lift your rates even though we did say you had to attain maximum efficiency and that the level of your rating compared with your rating capacity may be too low’. I feel that in the area of the activities of the States we should content ourselves with assisting the State governments to plan a program so that equality, including equality in a way of life, can be achieved and so that it is possible for individuals living within States to say: ‘Our local government has so much money, some collected by way of rates and some given to it by Canberra from a percentage of the national earnings of this country. It will perform or we will vote it out’. The same thing will apply in the State area where State governments, knowing the formula, will be prepared for the process to take place and will eventually achieve for themselves a taxing capacity. They will be able to say: ‘We know what is coming, inflation is accounted for. We can plan for the future’.

This has not happened in the last 3 years. In the last 3 years people have been trying to get on with the job. The job now will be achieved and by the gradual implementation of a co-operative federalism supported by a committee comprising local, State and Federal Government representatives, the difficulties will be overcome. They will be overcome in various ways. Some will be clear cut decisions but I would suggest at this stage that there may be many areas where true thought must be given as to whose responsibility a particular function is. For instance, social security and social welfare programs may best be administered by local government instead of by the Federal Government or a State government; it may well be that programs conducted by State or local government could best be conducted federally. By having a committee of intergovernmental relations these guidelines and the basis of the operation of finance between the States, local government bodies and the Australian Government will be established in such a say that each government area will be able to achieve for its people what it has set out to do without interference from anyone else.

Mr YOUNG:
Port Adelaide

– It was not my intention to be drawn into this debate but unfortunately the honourable member who has just resumed his seat took upon himself the task of telling the Australian Labor Party that it was terribly wrong in the manner in which it went about bringing in reform in Australia. I want to give a word of warning to the Government. The way in which it conducted itself as an Opposition between 1972 and 1975 encouraged the States, or those States that were opposed to the Aus.tralian Labor Government, to play a role which they Will not find easy to discard. The Government will find that State governments, with their power and influence and particularly with their allies which are normally the morning newspapers in the respective capital cities, will, because of the role that the Liberal and National Country Parties played between 1972 and 1975, be just as active in their agitation against the present Government as they were against the Labor Government. The Government will have to put up with that and will have to find a way around it.

Quite simply, the objective of the Labor Government between 1972 and 1975 was to bring to Australia some sort of uniformity of achievement, not just for people who live in one State but for the 13 million people who live in all the States and all the Territories. Our objective was that that should not occur just in one field but in all fields of life, whether it be in education, in local government or some other area which is funded by the Australian State or local governments. The honourable member for Mitchell (Mr Cadman) said that the Grants Commission was a disaster. I have had discussions with several council members in my area and I have never heard them describe the Grants Commission as a disaster. They found the moneys coming from the Grants Commission, based on the submissions which they made, very helpful. I would not call that exercise centralist. I would say that it was very broad in its scope. For the first time it involved these people concerned with local government throughout Australia. I would have thought that that was the sort of exercise to be encouraged and not discouraged, as is put forward by the honourable member.

Let us look at some of the other areas which have been funded. Take, for example, schools. People have said, as Liberal governments said between 1949 and 1972, that education is the responsibility of the States. They said: ‘Leave it all to the States. Do not allow Canberra to become involved. Do not let us tarnish our money by putting any responsibility on it; just hand it out and hope for the best’. What happened at the end of 23 years of rule by Liberal-National Country

Party governments? There were a million children at disadvantaged school and some hundreds of schools were classified as disadvantaged both in the government and in the Catholic sector of education. Was it irresponsible for the Labor Government to set up a Schools Commission which trebled the amount of money spent on education? Was that a centralist scheme? Was it a terrible crime against the Australian people to see that they got a better education?

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– What has that got to do with this Bill?

Mr YOUNG:

-It has a lot to do with the speech made by the honourable member for Mitchell who has just resumed his seat. No one was listening to you. We cannot refute what you said.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– I am asking what that has to do with the Bill.

Mr YOUNG:

– You were asked to speak for 10 minutes, so we turned off after 10 minutes. You spoke for 17 minutes, so we missed the last 7 minutes. We would like a copy of your speech.

Mr SPEAKER:

-Order! The honourable member for Port Adelaide will address himself to the Bill.

Mr YOUNG:

-I turn to the question of health. In fact, I will talk about all of those matters in relation to which we are accused of being centralist and which were so terrible for Australia. We now find that 1.5 million Australians who previously had no health coverage are now covered. Was that terribly centralist, or was it just a decent piece of legislation ensuring that the people of Australia have some son of health coverage? The same comment can be made in relation to all of these fields. The Australian Government moved to bring about some sort of uniformity in the field of transport. One of these days the Liberal and Country Parties will understand, I hope, that with the political colouring of the 6 State governments there is no way in which we are going to achieve any sort of uniformity of development. If we maintain the present political colourings of the State governments for the next 20 years, I suggest that we will have to build a wall round South Australia in order to keep everybody out, because the priorities set by the Dunstan Labor Government are far in advance of those set by other State governments. The Government says: ‘Let us give it all back to the States’.

I notice that one of the chaps left out of the Ministry, as a result perhaps of not getting on with the Prime Minister (Mr Malcolm Fraser) as well as he was supposed to- I refer to Senator Peter Rae- has said in the Australian that of course the Premier of New South Wales and the Premier of Victoria are attracted to the new ideas that have been put forward in very cloudy ways by the Prime Minister in relation to the new taxation scheme and how it is going to work because they see great advantages for New South Wales and Victoria. But the spokesmen for the smaller States do not see any advantages in it. In fact, they see great disadvantages in the way finance will flow to the States and in their ability to raise finance. So when Government supporters accuse the former Labor Government of carrying out programs which they say should have been rightly left to the other sectors of government, they should look at the problems which the Labor Government inherited in 1972 as a result of 23 years of government by their Party. Then perhaps the people outside will say that it would have been a good thing if those Labor programs had continued instead of returning to the old order which gave us all the social injustice which existed in December 1972.

Mr GILES:
Angas

-The States Grants (Capital Assistance) Bill which is before the House today is a method of topping up the States’ finances under the old system. Quite unbeknown to the honourable member for Port Adelaide (Mr Young) we now have a new philosophical approach to the whole problem of the financial structures of the States. I believe it is the Government’s intention to provide the proper form of financial muscle to give effect to this new philosophical approach. The honourable member for Lilley (Mr Kevin Cairns) pointed to one or two areas of difficulty, and I think that we can all acknowledge that some areas of difficulty are still remaining. The State Premiers and their Treasurers are still to negotiate on some of the fine points in relation to this new federation policy. The honourable member for Port Adelaide said that he had to tune off during the speech of the honourable member for Lilley. I expect that is a measure of his own capacity, because the honourable member for Lilley delivered a very fine speech and it was listened to by a bigger number of members than has listened to the speech of any other honourable member recently. His knowledge of these financial matters is, of course, great and that of the honourable member for Port Adelaide is nonexistent.

Might I return to the financial problems of the States. We are fearful, as are many honourable members and other people within the States, that State governments have become over the years little more than expenditure agencies, little more than administrative bodies, in a way that Federation in this country never envisaged at all. Well before the last election the seed was germinating for this new idea within the Treasury Committee of my own Party. It was the only truly innovative policy espoused during the entire campaign of the last election. It is a new and innovative philosophical approach which, as I said, I think will have the financial muscle to make it practical. What is it founded upon? Basically speaking the funding of the States has been made up of their own forms of tax raising. In my own State there are heavy death duties; heavy land taxheavier than in the other States- registration fees for motor vehicles, driving licence fees and so on.

But the main source of funds for the States, of course, has been, firstly, the reimbursement grants, for want of a better name- the return of income tax revenue to the States. It is largely a case of the people of those States paying their tax and some of it going back to them. Secondly, there are the section 96 grants. They are commonly termed the tagged grants. They are the sort of grants that have forced responsible people out of local government because the priority of expenditure is no longer left with them; all of the money is tagged. Very many competent people have left local government because of the lack of responsibility that they now see in that area. This scheme, as I shall explain as I go along, will tend to overcome that difficulty.

Thirdly, there are the equalisation grants. I am not at all sure that my friend, the honourable member for Mitchell (Mr Cadman), did not perhaps a trifle tritely gloss over the importance to the smaller States of the equalisation grants. Nevertheless, he put forward his point of view with confidence and capacity. But equalisation grants are pretty important to the smaller States, as members of this House will know. So rather than have State governments become a cipher, an administrative body or an expenditure agency, we see the importance of returning the power of priority to the State governments, and indeed to local government, as a matter of the highest importance at this point in the history of this nation.

A little while ago a distinguished audience was seated behind me. If the members of that audience had been here now I would have been inclined to ask: ‘Why should the bureaucrats in Canberra decide where a WC or bidet should be situated in a country area of, say, Tasmania?’ The whole system would become ludicrous. People throughout the world, not only in Australia have proved conclusively that they do not want all power centred in the ivory towers of the capital. There is a move- using the word ‘democracy’ in its broadest sense- amongst any democracy for people no matter where they be situated, to feel that they have the power to enter into the decision making process of that country. By the time we have put this policy into effect very big changes will have been necessary. I can think- not of course, in the electorate of Angas but, say, in the electorate of Grey- of all sorts of local government bodies largely composed of retired farmers which will suddenly have foisted on them the responsibility at local government level of deciding whether they have a creche in Oodnadatta, whether they attach a social worker to the district council of Oodnadatta. This will be an awful shock to some of the local governments in some of those areas, and of course it will be a very good shock because main street pressures will be brought to bear in aU those communities. People at the very grass root level will feel that they have a part to play in the decision making and in the priority of expenditure in their own areas.

Members of the Opposition can argue their heads off or go black and blue but there is no refuting the fact that there is this form of belief in the mainstream of the Australian people today. The forces of democracy dictate, I think historically at this point, that the people wish and require to become part of the decision making process. During the last election campaign whenever I had the chance to put this new federation POliCY to areas in my electorate, people of all political colours were tremendously attracted by it. As my friend Mr Grassby used to say when he was a Minister and the member for Riverina: ‘Statistics speak for themselves’. There is some merit in that.

Let us look momentarily at some of the areas that still have to be negotiated because I think they are worth stopping to look at. We have not met as a Treasury committee since the last Par.liamnent We are about to. No doubt pools of resources, brains and experience will be brought to bear on this problem. There will be obvious problems in regard to national highways and road programs going forward. There will be problems if one State gets right out of kilter with another in its form of revenue raising- a matter to which the honourable member for Lilley so properly referred by pointing to the difficulties mentioned in the Grants Commission report. All of these problems have yet to be solved.

I believe that this is a great policy which will attract the imagination of the people of

Australia. I believe that members of the Opposition too, in due course, will have to get out on the hustings and explain more carefully to their areas what it means to them. For instance, it would be quite stupid if they ignored the obvious attraction of the Australian people to this sort of policy and did not describe to their local government areas, to their people involved in main street pressures for creches, for child care, for what have you, that these sorts of things will now have an ingredient of local government, an ingredient of the people making the decision and producing the pressure.

When it is all boiled down- really this warrants a speech in itself- we must give more power back to the State governments. It is absurd that some of the decisions that have been taken by Federal governments- I am not by any means altogether blaming the Opposition when in government- and the priorities laid down by past governments in Canberra have almost emasculated many of the functions of the State governments. If we are to have State governments in the future- I hope that we always will have them- this is their chance to grab hold of the nettle. It is their chance to improve their quality in many cases and to try to attract people of real competence to their party structure in the States. Under this system not only local government but also State parliaments will have a more vital role to play in the checking of expenditure, where need be in some areas, and for added expenditure in other areas.

Mr Deputy Speaker, I thank you for the latitude you have given me in this debate on the States Grants (Capital Assistance) Bill but I know that the wisdom that is part of your make-up acknowledges the fact that this matter of giving grants to the States is inherently bound up with the remarks on the new and innovative policy of this side in the political sphere.

Mr SCHOLES:
Corio

-Mr Deputy Speaker, I do not know whether Hans Christian Andersen is a member of this House.

Mr DEPUTY SPEAKER (Dr Jenkins:
SCULLIN, VICTORIA

-He is not on the list that I have.

Mr SCHOLES:

-Certainly there are some rivals of his here. I heard one honourable member talk about local government and tied grants. I think that in the last 3 years local government got its first ever untied grants from this Parliament. If one takes the trouble to talk to people in local government one will find that in many cases these untied grants saved some local governments from bankruptcy. The practice of totally tied grants and of no community involvement in the use of money for community projects was one in which the expertise was with the gentlemen who occupy the other side of the chamber and not the former Labor Government.

I point out that the method of financing tertiary institutions, for instance, was on a formula which was of such rigidity that State governments were quite often not able to cope from their revenues with their commitments to universities and other organisations. The Commonwealth, under the now Prime Minister (Mr Malcolm Fraser), eventually had to drop the practice of announcing how much it would make available prior to the States making their amounts available in order that the amount of money available to the universities would be that amount of money for which the States could provide their matching grants.

I remember Bills being passed in this House to assist aged persons in elderly citizens clubs, with paramedical services and in a number of other ways. The Bills were subject to a minimum commitment from the States and a minimum commitment from the local councils. Without the minimum commitment no Commonwealth funds were provided. That was the freedom of choice given by the former Liberal-Country Party Government in this place. It is not the sort of fairy story we have just heard from honourable members opposite.

There is no easy solution to the problems of a federation and fund raising where there is the type of diversity which exists between the government regions or the political units. To suggest that the responsibility will go back to the people of the States is another fairy story. In most of the States of Australia the people have very little opportunity to alter the political structure of their State governments. The honourable member for Angas (Mr Giles) was a member of a House of Parliament in which, he well knew, the people had no opportunity to alter the political structure of that House, irrespective of how they voted.

Mr Giles:

– That is not true.

Mr SCHOLES:

-I point out to the honourable member that the Labor Party received 56 per cent of the votes but got only 4 seats. There were 16 seats for the Liberal-Country League. That is not a bad majority. Just to show that I am being completely impartial in this matter, I point out that the State of Queensland has not had a change of government by election in the last 50 years. The Gair Government technically fell at an election, but it really fell in the Parliament before the election. During most of that period

Labor government’s were in office. I suggest that honourable gentlemen opposite would have said that the people of Queensland had very little chance of changing these Labor governments, just as they have of changing the present Queensland Government by electoral means.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– There was a change about 25 years ago.

Mr Giles:

– Some people are not old enough to remember the changes-

Mr DEPUTY SPEAKER:

-Order! I ask the honourable member for Lilley (Mr Kevin Cairns) to cease his reminiscences.

Mr SCHOLES:

-The solution to the allocation of funds is not going to be easy. The Government believes that it has a solution in passing tax powers back to the States. It believes that if each year the 6 Premiers and, I presume, the leader of the Northern Territory Assembly, and possibly even the leader of the Australian Capital Territory Legislative Assembly eventually, will get together and will be very friendly fellows- or ladies, if that subsequently occurs- and will decide just what levels of taxation they want. That is just not on; they will never agree. Eventually, if we are going to strike a uniform level of taxation on the Australian people, or something near to a uniform level, and not disadvantage those people who live in the smaller States or States with additional responsibilities, the Commonwealth Government will have to act in a balancing function. It will be required to provide the balancing funds to those States to make up the deficiencies that will exist under the State tax revenue arrangements. There is no question but that eventually we will go back to the Loan Council type arrangements where the haggle will go on. Someone will have to referee, because what suits New South Wales almost certainly will not be satisfactory for Tasmania, what suits South Australia most likely will not be agreeable to Queensland. Every State Government wants more funds. Except for the last couple of weeks, I do not think that the States have ever stopped asking for additional funds; we find that Victoria is at it again already. If the States are able to levy their own income taxes, Victoria and New South Wales will do very nicely, thank you. But the other States will have to be subsidised in one form or another. Once we start a subsidising arrangement we immediately bring the Commonwealth back in. The only difference is that two sections of a tax form will have to be filled in, or the tax will be levied under different names; but the tax is the same. It may be that some of the States may pay more than others and it may be that some additional flexibility may occur. But, in essence, the situation will arise whereby the mendicant States- that is what the smaller States will have to become- will have absolute control over their operations by the Loan Council in exchange for the additional funds they have to raise because of their deficiency situation, because of their weaker tax raising capacity.

I think that when we say that there is a panacea in this area we are trying to fool ourselves. I hope that the solution to Commonwealth-State relations on finances can be solved, but to suggest that an idea- and to date, it is an idea- is a solution before it has gone into practice and before it has gone through the rigors of political need- and the political need of the States is to have someone to blame for their deficienciesthen no matter who sits on the Government benches, they will be blamed for all the deficiencies financially in this Commonwealth. Gradually we will revert to the proposition where they will be blamed for most of the other deficiencies in this Commonwealth. We are fooling ourselves if we believe that State Premiers, State politicians or local government are going to be satisfied with a situation where, under another guise, they return to the position that exists at the moment. I am not sure that there is a great deal of honesty in some of the claims by the States about their deficiencies in funds. Certainly the percentages they are receiving of total revenue are increasing at a greater rate than those allocated directly by this Parliament. I do not think there is any dispute about that. We have heard that the Public Service of the Commonwealth is growing at an extravagant and alarming rate. I invite honourable members to look at some of the State public services. For instance last year the Victorian public service grew at a rate 50 per cent greater than the Commonwealth Public Service.

Mr Giles:

– That is all the more reason why there should be accountability, and that is exactly what we are trying to do.

Mr SCHOLES:

-What the honourable gentleman has said is that his solution to the problem of Commonwealth-State finances is to reduce the amount of money available to the States. I think he ought to make that point clear.

Mr Giles:

– No, the States should be accountable to their own people.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– That is a twist.

Mr SCHOLES:

-It may be a twist, but I think that it is a twist that the Government will make. It is either that or the honourable members Leader’s policies on cutting expenditure are only half true. I should like to raise one or two other matters very briefly. Solutions to financial problems are never easy. If, as the honourable member for Angas and other honourable members opposite have just indicated, the Government is not going to cut down the amount of revenue available to the States, and the States’ financial situation will be solved by this change in taxation, I think they ought to have a look at what expenditures the Victorian Government is now able to promise in an election campaign after 6 months of saying it was so starved of funds by the previous Government that bankruptcy was around the corner. If the State governments’ need for finance, which seems to me to be almost bottomless according to their claims, and the Commonwealth’s need for finance is going to be solved by the Government’s new schemes, then the people will have to pay more taxes. There is no way in which those criteria can be met unless someone puts more money in, and that someone has to be the ordinary man and woman in the street. So any suggestion that tax relief can take place while at the same time the demands of State Governments are met is something worthy of Christian Andersen.

Mr Ian Robinson:
COWPER, NEW SOUTH WALES · CP; NCP from May 1975

-This afternoon we are debating the provision by way of grants of an amount of $430,333,000 to the States, representing a component of about onethird of the total Loan Council program for State loan purposes, for capital expenditure. One perhaps could be excused for not believing that this was really the subject under discussion after listening to the honourable member for Corio (Mr Scholes) and a little earlier to the honourable member for Port Adelaide (Mr Young). Nevertheless, the States Grants (Capital Assistance) Bill is a very important one. As far as this Government is concerned, it is a Bill that carries through from a very important decision made in 1970 whereby the States would be relieved of some of the high cost of financing their works programs. The method of providing that relief was to take responsibility for the actual provision by way of grant of certain funds to compensate the States in respect of what otherwise would require expensive loan finance to perform works and services. I believe this is significant.

If one thinks back to 1970, the real crisis for the States at that time was the enormous interest bill, the enormous debt sinking fund requirement, and the disproportionate situation between the States and the Commonwealth Government in relation to the Commonwealth’s part in the annual expenditure of funds. Therefore the government of the day, a LiberalCountry Party Government, had the wisdom to see the justification of reducing the burden of loan debt around the necks of each of the States in the Commonwealth. As a consequence of that decision there were set in motion the circumstances in which annually the Commonwealth now provides a very substantial proportion of the funds for the capital purposes of the States by way of straight out grant with no repayment, no interest charge, and in a manner that gives the States a distinct advantage, one that they did not enjoy before.

We listened to the criticism by the honourable member for Port Adelaide. We heard the honourable member say that we were heading on some course that would put the clock back, that it would undo the Labor Administration’s philosophy of providing that everyone be equal. I hope it does. That philosophy was very quickly heading this nation into disaster. But, of course, they were pretty hollow words from the honourable member for Port Adelaide. It will be recalled that this measure did not pass through the Parliament before 1 1 November last year. It is before this House again because it did not pass. If we look at the second reading speech of the Labor Treasurer, we find that he indicated very clearly that in respect of South Australia and Tasmania the amount was reduced substantially because the Commonwealth had taken over the railways in those 2 States.

One must recognise that there is a limit to the availability of funds. This the previous Government did not seem to recognise. However, it recognised it in this respect and actually stated that a reduction was made. Therefore the honourable member for Port Adelaide cannot have it both ways. I believe the importance of this Bill is to be seen in the fact that it keeps faith with a definite policy of helping to sustain the States’ finances and doing so in a manner that does not impose stringent terms and conditions. These grants, in the main, are available for capital works on projects such as schools, police buildings and the like for which no debt charges are normally recovered- in other words, there is no income returnable from them- and the States are free to make detailed determinations of these expenditures. This is right and proper.

The honourable member for Corio alluded to what he called a policy applying to this side of the political arena to provide funds on a basis where there was some contribution from the States and perhaps some from local authorities and said that this was restrictive and bad. This does not apply to this Bill now before the House, but as the matter has been raised it becomes part of this debate. The honourable member referred to fairy tales, but he ought to have a close look at the import of what he said. He referred to the fact that funds could not be taken up on a policy of some partial contribution to a worthy cause such as homes for the aged. He ought to look at the statement by the former Minister for Social Security in another place, Senator Wheeldon, made in August last, when the then Government announced that there would be no more funds this financial year for homes for the aged. Never mind about matching funds or a proportion of funds, never mind about anything of that kind; this was a straight out cut off of funds. So the Budget under which we still operate provides no money for new projects such as homes for the aged, hostel accommodation and the like. The honourable member for Corio ought to think about that before he talks in an airy fairy manner in this place on aspects of State and Federal financing.

The honourable member for Corio went on to tell us that he thought States were irresponsible. I hope the Victorians who happen to be listening to this debate and for whom a State election is looming will not forget his words. If he believes that the present Victorian Government is irresponsible he ought to look at the record of his Party’s Government in this place in the last two or three years in respect of matters of this kind. He ought to be honest and admit that it completely messed up matters such as homes for the aged and finance for so many other purposes, that it did so to the point that it had overspent in so many directions that it had to impose a sharp cut on what might be described as essentials.

I want to labour this one aspect of homes for the aged. In the 20 years odd that we were in office there was never an occasion when an organisation which had submitted an application for a grant, in compliance with the normal conditions in respect of the type of building, its location and the like, and which had its own share of the funds, was not assured that it could get funds to go ahead with that project. Today in Australia there is not one new project because the previous Government terminated such things. Yet we hear criticism of the estimating and so on of State governments. The real truth of the matter is that a lot of justifiable criticism can be levelled at the previous Government. We should not allow this escape, that someone else is at fault, when the truth is to be seen by only very cursory examination.

There is another important consideration to be raised. Reference was made to the fact that for the first time the previous government had provided untied grants for local government. Let us consider for a moment the present financial plight of local government. Has it ever been worse? To what extent did the so-called untied grants help local government or relieve the great burden of ratepayers? Not in the slightest. They were just camouflage. No local government interest would thank me for criticising the grants and I certainly am not doing so; they were very welcome to every local government body that received them. But to say that they solved the problem and were the panacea or solution is a pipedream. I believe that the policy that we put forward, along the line of this legislation in terms of the provision of finance, is progressive and will effectively solve the problems that confront local government and State governments. This certainly cannot be “done by policies and philosophies associated with everyone being equal and that if we do not achieve this we do not achieve the objective for the people of this country. We know that that is a socialist catch cry. We have a duty to those who sent us here with a huge majority, to bring that sort of attitude to an end so far as planning and financial allocations are concerned and to see that things are done on a practical and constructive basis. We have been sent here to see that there is not a repetition of the messy administration experienced in the last two or three years.

I do not propose to go into the details that this legislation sets out, such as what each State is to receive and for what purposes. The truth is that this Bill is one of the fundamentals of the approaches taken in 1970 to give the States a fair go. This is merely a starting point. There will be legislation. There will be other debates in this place which will deal with the more current aspect of this important matter.

One point that is to some extent overlooked is that when States carry out capital works and provide a public facility with funds that come from a source such as this some recognition would not be inappropriate. Because of the political hotchpotch, because of the kind of things that have been said today by members of the Opposition front bench, the States tend to take an attitude that any money which is provided under legislation of this kind is only their right. Even to mention subsequently that the funds came from a progressive partnership, from a progressive Commonwealth arrangement, is perhaps giving in a little to the master in Canberra. I think if there were within the States a readiness to recognise the importance of legislation of this kind there would be a better understanding on the part of State and local authorities and on the part of the community at large. I sincerely emphasise that point because I think it has been for too long a matter of the issues being clouded by arguments not based on fact and by emotional arguments. In the process the nitty-gritty has been overlooked to the disadvantage of all concerned. I hope members of the Opposition will think about this and that their utterances will tend to be more factual than hypothetical in future debates on matters of this kind.

Mr WENTWORTH:
Mackellar

– I have undertaken to speak for only 5 minutes because I understand the Bill must go through. Therefore I say very briefly something which I hope to be able to say at greater length, with greater consideration, at a later stage. It seems to me that this Bill is the first step to right some of the wrongs which all of the States have suffered for a long time. It is also, I hope, the first step to right the particular wrongs which New South Wales has suffered. I believe this fact must be faced: New South Wales can no longer carry the rest of the States on its back. We are the oldest and the largest State. We had the first development and for years past we have been contributing to the other States. The time has now come for this to stop.

New South Wales can no longer afford to carry the rest of the States on its back. I ask honourable members to look at page 144 of Budget Paper No. 7 published by the previous Government and which sets out the Labor Party’s proposals for the financial year 1975-76. I ask honourable members to look at the last line on that page. The figures are not complete but even these partial figures will show the main effect. For this year, under Labor’s plans, New South Wales was to receive from the general purposes fund $289 per head, but the Australian average was $50 per head greater at $339. That is nearly $250m which New South Wales is worse off. That is $2 50m which New South Wales cannot any longer afford.

We have carried Australia on our backs for long enough. It is time that some of the small States grew up and started to carry their own burdens. They are living on New South Wales. I go, for example, to Perth. In Perth there are great systems of freeways constructed with New South Wales money which has been granted to Western Australia because it has a tremendous area. The money is spent in Perth, while Sydney is congested in a way in which Perth never was.

Sydney cannot pay for Perth any longer. It is time that this stopped. The New South Wales Government is valiantly struggling against this situation. It has imposed taxes and charges which other States do not have to bear.

If New South Wales had this $250m it could take off such things as the very heavy petrol tax, which is an iniquitous tax, and which is carried by New South Wales because is has been forced on New South Wales, not by the New South Wales Government but because the Commonwealth has taken New South Wales money and has spent it in other States. It is time this stopped. The New South Wales Government is bearing the unpopularity of iniquitous charges which it has had to impose because it has been contributing to all the other States. I said I would speak for only 5 minutes. I have taken that time, so I will stop. I will be returning to this theme later and developing it in greater detail. New South Wales has to get a fair go from the rest of Australia.

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

– It was not my intention to speak in this debate, but the honourable member for Lilley (Mr Kevin Cairns) made some thoughtful comments. This is a matter in which he has taken a great deal of interest. He invited me to reply to them before the debate was finalised. Despite the speeches, there is no basic disagreement about this Bill. The honourable member for Adelaide (Mr Hurford), the shadow Treasurer, claimed it was an Australian Labor Party Bill because it was introduced in the last Parliament. As the honourable member for Cowper (Mr Ian Robinson) so rightly pointed out, it implements a scheme of grants which were decided in consultation with the States in the 1970-71 period.

Despite the problems that the then Government had leading up to 1972, 1 think we had a very real degree of co-operation between the Commonwealth Government and the State governments in the years 1971 and 1972. Our attitude was one of consultation and cooperation. Despite what members of the Opposition say, for the 3 years they were in government, although some of their schemes may have been desirable and may have been designed to assist the States, there was an attitude of confrontation. It was not a question of content in all cases. It was certainly a question of style. So we had divisiveness, duplication, and a lack of efficiency in administration in government.

There was a Premiers Conference on 4 and 5 February. It was outstandingly successful. The

Prime Minister (Mr Malcolm Fraser) and the Treasurer (Mr Lynch) took the opportunity to discuss with all State Premiers the initial implementation of the policy on federalism which had been developed, with a lot of research and a lot of work, when the Liberal Party of Australia and the National Country Party were in Opposition. The Premiers Conference overwhelmingly supported the concept and believed that the policy on federalism as enunciated would be a succesful one. Of course it is very complex. Of course a lot of details must be worked out. A lot of mechanics are yet to be resolved. It started off very well. It is progressing very well.

The honourable member for Lilley, who is a good Queenslander and a good Australian, of course, raises the problem which is in his mind about equity for smaller States. This concern is shared by Sir Gordon Chalk, the Treasurer of Queensland, who said: ‘I am going to look closely at any policy, at any document which flows on from the policy’. What would one expect a Treasurer to do other than to look very closely? That is his job. But as he sees the policy unfold he, like all other Australians, will come to see it for the contribution it will make to the Australian economy. I simply want to say to the honourable member for Lilley that his comments have already been noted by me. I will discuss them with the Treasurer. As to his concern about equity so far as the smaller States are concerned, particularly with regard to the loan program and the grants element within that, this is a matter of course for the Australian Loan Council. The comments that the honourable member for Lilley and the honourable member for Mitchell (Mr Cadman) have made about the role of the Grants Commission will be given every attention.

The Parliament ought to know that assurances have been given time and time again by the Prime Minister and the Treasurer that this policy will work for the benefit of the 3 tiers of government. It will work for the benefit of the States and local authorities- and any of us who have had some association directly or indirectly with local authorities know of the problems which they have in compiling their budgets. We have an assurance from the Leader of the Government which is backed up by his entire Ministry and Party. We believe that with consultation and co-operation we will achieve a greater degree of efficiency and a greater avoidance of the duplication and intense rivalry which led to inefficiency and maladministration. We will develop a policy which is in keeping with the spirit of the Federation of States within the Commonwealth.

Question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Third Reading

Leave granted for third reading to be moved forthwith.

Bill (on motion by Mr Eric Robinson) read a third time.

page 348

QUESTION

GOVERNOR-GENERAL’S SPEECH

Address-in-Reply

Debate resumed from 25 February, on motion by Mr Sainsbury:

That the following Address-in-Reply to the Speech of His Excellency the Governor-General be agreed to:

May it Please Your Excellency:

We, the House of Representatives of the Commonwealth of Australia, in Parliament assembled, desire to express our loyalty to our Most Gracious Sovereign, and to thank Your Excellency for the Speech which you have been pleased to address to Parliament.

Mr FRY:
Fraser

-Mr Deputy Speaker, may I, through you, offer my very sincere congratulations to the Speaker and to the Chairman of Committees on their appointment and assure them of my full co-operation in assisting them to carry out their duties. It was of interest yesterday to see the way in which supporters of the Government responded to the diversion which was created by Mr Murdoch in his Press statements. Honourable members opposite were most anxious to seize this diversion, of course, to divert the attention of this Parliament and the public away from the grave economic problems which are building up for this Government. It is understandable, of course, that they should seek a diversion when the problems of unemployment, cuts in government spending, increases in sales tax and reduction in the purchasing power of people’s incomes are building up to such vast proportions in the electorate. It is not surprising that many Liberal supporters are coming into my office and complaining bitterly of the way Government measures are affecting their enterprises, their businesses, the way they live and their prospects of securing homes. It is not surprising too that quite a few of them are coming along and saying to me: ‘The way our Government is performing is starting to make the Labor Government look good’. This is being said many times in Canberra today. I have some sympathy for my friend, the new honourable member for Canberra (Mr Haslem) knowing that he has to face up to these sorts of criticisms in his electorate too at this time.

It is not surprising either, of course, to see Mr Murdoch looking for some diversion because it must be very embarrassing for him to have to attempt to cover up for the conditions which this Government is creating, a Government which he played such a predominant part in bringing to power. It must be very distasteful for him to have to cover up for the problems that are being created for the unemployed and the disadvantaged, and the problems in the welfare area. It must be very distasteful for him to have to cover up and try to manipulate and mislead people as to what is the real nature of this Government. He succeeded before, of course, in creating a diversion, but I do not think he will on this occasion because I think more and more, from day to day, people are becoming aware of the real nature and the real philosophy of this Government.

To refer directly to the Governor-General’s Speech, I think the Government should be congratulated for the way it has written into the Governor-General’s Speech such a blatant and unabashed exposition of the way conservative elements see the capitalist system operating effectively in this country. This is spelt out very plainly. In the Speech itself and in many of the supporting speeches of back bench members the old, conservative cliches have tumbled out in unfettered profusion. Among some of the cliches used were: ‘we must encourage self-reliance and common sense in the Australian people’; ‘we must all work hard’; ‘we must be independent’; ‘we must stand on our own feet’; and ‘we must assert our great Australian individuality’. The assumption is that if we do all these things we will be well on the way to establishing a truly liberal and humane society.

Mr Sainsbury:

– Hear, hear!

Mr FRY:

– The honourable member says ‘Hear, hear’. We are led to believe that everything in the garden will be lovely, there will be no inflation and no unemployment if we just do what these wonderful people, our wonderful leaders, are telling us. Such is the mythology of the Governor-General’s Speech and the Government’s so-called liberal philosophy. The reality, of course, is something quite different, as anyone of any discernment will know and as more and more people are becoming painfully aware as the harsh policies of this Government begin to bear heavily on more and more people as the days go by.

It is quite plain that the overriding objective of the policy is to strengthen and preserve capitalism and free enterprise in the interests of people of property, the mining interests, the commercial interests and their corporate friends on the stock exchanges and those people of the professions who help to sustain that wealth and property. Profit making and profit taking is the essence of the exercise, whilst welfare and full employment objectives are only considered if they are compatible with and subservient to the profit objective.

The world-wide recession and its Australian counterpart have provided the political climate to grant concessions and incentives to the owners and manipulators of capital. This is what this Government has set out to do in a blatantly arrogant and harsh manner irrespective of the effects it has on disadvantaged people. The contradiction, of course, between the mythology of what the Speech sets out to do and the reality of what the Government is actually doing has been spelt out very forcibly and very well by many excellent speeches of Opposition members. I might add, that it has been spelt out too by some outspoken criticism by some of the more senior members of the Government back bench who find the hypocrisy of the Speech rather too much even for their well-conditioned hides. It is quite obvious from the Speech and from the actions of the Government that when it refers to ‘regulating business activity to prevent exploitation of consumers’ what it really means is reviewing the Trade Practices Act to ease the regulation of business. Goodness knows, it was timid enough even with a Labor Government.

In Canberra, for instance, Government action means depriving the private sector of long service leave payments and abolition of the Government Conveyancing Office, handing conveyancing back to the legal profession where the cost will no doubt double. It also means reverting to land auction and adjusting the reserve prices of allocated lands to prices obtained at auction. It means putting pressure on the Australian Capital Territory Legislative Assembly to lift rent and price controls in Canberra. It is amazing what a devastating collection of measures these are to protect and avoid exploitation of the consumer.

Another strong plank in the GovernorGeneral’s Speech is more effective assistance to the disadvantaged, but government action has singled out disadvantaged people for special consideration. These are the special considerations they have been given: A 50c increase in prescription charges; the delaying of a legitimate pension increase; and for pensioners who do not survive without the increase the abolition of pensioner funeral benefits; a reduction in welfare services through the imposition of staff ceilings; and a heavy reduction of overseas aid programs to deprived countries. By these generous measures our Government extends special consideration to the disadvantaged not only in this community but also in other countries!

A phrase such as ‘giving effective educational opportunities to the disadvantaged and handicapped’ sounds wonderful. In Canberra it means: Depriving the Koomarri workshop of Government printing jobs; scrapping the work experience program for intellectually handicapped people; cutting down on remedial teaching and other special classes as well as reducing ancillary staff in our schools. All this has happened not only in Canberra but also all over Australia in every State.

The Governor-General’s Speech refers briefly to self-government in the Australian Capital Territory. Here again, the Government’s statement is quite ambiguous. It refers to giving the Legislative Assembly responsibility for financial management and decision-making in Canberra’s local affairs. A notable omission of course is that no reference is made to giving the Legislative Assembly legislative powers. What nonsense is this? We call it a Legislative Assembly but we will not give it legislative powers. The fear amongst local advocates of self-government on both sides of the political spectrum is that the Assembly will end up as something even less than a municipal-type council. This is not the intention of the advocates of self-government. It is not the intention of the report of the Joint Committee on the Australian Capital Territory last year. I hope it is not the intention of the Minister for the Capital Territory (Mr Staley). The Government has set up a task force to report on the matter. If the task force does not recommend giving the Assembly legislative powers the Minister and the Government if necessary should make sure that they are given because it would be quite farcial to call it a Legislative Assembly and not give it legislative powers.

The ultimate in double-talk in the GovernorGeneral’s Speech is the expressed wish to expand job opportunities. This should be interpreted as meaning staff ceilings in the Australian Public Service, which I am afraid will require retrenchments if they are to be achieved or, alternatively, hundreds of people going on unattached lists with no prospect of getting another job and ultimate retrenchment. It also means the breaking down of valuable professional institutions such as the National Capital Development Commission as well as a severe cut in that organisation’s works budget, thus inducing serious unemployment in the building trades. The NCDC has taken a long time to build up and its morale has been completely shattered by recent proposed retrenchments.

The investment allowance is a typical measure in line with this Government’s overall policy but the amendments just announced could not in any way be seen as a measure to reduce the Budget deficit. I know it is said that a Budget deficit will not be avoided this year, but the investment allowance will not improve the chances of avoiding a deficit next year. It will make administration more complicated and expensive. It still does not help small businessmen investing in equipment costing $500 or less. Overriding the significance of the investment allowance are the serious consequences of the Government’s cuts in consumer spending and the effect that this policy will have on overall demand. Businessmen will not invest merely to please this Government if the Government does not play its part in stimulating demand. The Government’s measures affect demand not only by increasing unemployment but also by increasing indirect taxes and reducing overtime, thus reducing the spending power of those still in employment.

Mr McVeigh:

– What about the blokes who do not have a job?

Mr FRY:

– I will say more about them later. I am concerned about not just those who do not have a job but also those with jobs who are having their incomes reduced. So much for the lofty talk of more freedom for people to choose the style of life they want. That is very relevant to my friend’s interjection about unemployment. What choice has an unemployed person? I believe that the Government is making a major blunder in attributing Australia’s economic problems to excessive government and excessive government spending. There is no theoretical or empirical evidence to suggest that money spent in the public sector is in some way bad and that money spent in the private sector is good in an economic sense. As other honourable members have pointed out, it is a dangerous illusion to see the public and private sectors of the economy as clearly defined separate packages. They are closely interdependent. Nowhere is this more evident than in the Australian Capital Territory. The Government is merely reducing the deficit by reducing demand in the economy, thereby deliberately creating unemployment.

The ill-advised 10/2 per cent Australian savings bonds have succeeded brilliantly in reversing the whole trend of interest rates upwards with a subsequent dampening of business incentive. The Government is applying yesterday’s discredited remedies to a set of economic circumstances for which there is no modern precedent. Its policies represent a desperate effort to restore profits at the expense of jobs and welfare. Its policies are insular and parochial, showing little appreciation that world economic instability emanates from the ending of the era of United States of America hegemony of the economy of the world- an era which would have ended sooner except for the Vietnam war. The Government’s policies will not succeed, as is already apparent. I suggest that, if the present policies continue, in 12 months time unemployment will still be unacceptably high, the growth rate of the economy will have fallen and inflation will still be with us. When that stage is reached the Government will be forced to stimulate the public sector in the physically productive areas of housing, public buildings, hospitals, schools, roads, transport, etc in order to create jobs to enable a consumer-led recovery to get under way. That is what it should be doing now but it will not do so until it is too late.

In relation to foreign policy, we can be certain that at the end of the Government’s term Australia will be even less independent than it is now. The continuation of the operation of foreign bases on our soil such as Pine Gap, nurrunga and North- West Cape, together with the proposed Omega base, merely means further subservience to and dependence on the United States. None of these bases is relevant to the defence of Australia. They merely serve United States global strategy, including nuclear strategy, and increase the possibility of Australia becoming a nuclear target in the future. Cockburn Sound is a vital part of our defence system- there is no denying that- but the decision to open it to nuclear-powered and nuclear-armed United States warships is not. It will undoubtedly invite reprisals against the citizens of Perth in the event of nuclear conflict between the super powers.

Mr Martyr:

– We can take it.

Mr FRY:

– You must not live there. Our immediate neighbours support the United Nations proposal for a zone of peace in the Indian Ocean. This proposal is not supported by the United States of America or by the Union of Soviet Social Republics. We support the United States base on Diego Garcia. Our neighbours can only interpret this Government’s policy as a further dependence on and domination by the United States of America.

It is interesting to look at our enforced economic dependence on Japanese trade. This is being reinforced by the proposed uranium trading. This, together with our policy towards Timor being dictated to us by Indonesia, means that there is now very little scope left for genuine independent initiatives in Australian foreign policy. This Government’s policies will lead to precisely the reverse situation.

Just as Australians cannot be insulated from the current instability of the world economic scene, neither can we expect to be insulated from the dramatic and far-reaching social changes going on throughout the world, particularly in the emerging nations. History will not stand still for this conservative coalition while the Government pursues its foolish endeavours to reconstruct a blatantly laissez-faire free enterprise, elitist society based on the Prime Minister’s outmoded philosophy of survival of the fittest. The Treasurer (Mr Lynch) can continue to mouth all the voluminous economic cliches at his command. The Governor-General can talk glibly of this unique opportunity of establishing a ‘liberal, humane society ‘ in the Government’s terms. History Will not stand still while the Government endeavours to turn the clock back to some long past golden age of open exploitation of resources and people by the Government’s men of property, by the Government’s corporate partners of the stock exchanges and by the professional people, all of whom have exploited the Australian community for so long.

In the long run, these days will finish. Government supporters may sit in this House full of false pride and complacency in their numbers. The Government should be warned that a growing feeling of loathing is developing within the Aus.tralian community, a loathing of the falsity of what Government supporters profess to stand for; a loathing for this Government’s methods of assuming power as well as a growing awareness of the gross injustices done to the Labor Party in government. In a relatively short time I suggest that history will catch up with those who now sit opposite and their philosophy of the survival of the fittest. I foresee that they will be swept from office by an equally volatile but opposite reaction to that which swept the Labor Party from office. When that happens all the rhetoric contained in the Governor-General’s Speech will be seen for what it is- a collection of shallow and empty phrases.

Mr McVEIGH:
Darling Downs

-I will leave it to the people to note the difference between the man Fraser and the honourable member for Fraser (Mr Fry). The man Fraser is a man dedicated to decency and honesty, a man constructive and positive. The representative of the electorate of Fraser is a man destructive and negative. We have listened to 20 minutes of feeble bleating from a man who obviously did not have his heart in the job. I congratulate you, Mr Deputy Speaker, on the confidence that this House has once again displayed in you. I know that you with your great sense of humility and your great appreciation of human nature will continue the wonderful tradition of service that you have given to the Parliament. I can assure you that a man of your standing in the Chair will have the complete support of those who sit on this side of the House.

This Thirtieth Parliament of our country meets in times of change. One is reminded of Tennyson’s poem Morte D’Arthur and the words: ‘The old order changeth yielding place to new’. It is good to relate that the change is for the better. Comparisons are always somewhat odious and one can have difficulty in noting the vast differences because the propositions are almost incomparable on account of their different bases. The document presented to the Parliament by His Excellency the Governor-General is a logbook of honesty, constructive proposals and responsibility; a log-book which will plot the course of Australia’s destiny and follow its climb back up the ladder of respect among the people and the nations of the world. It replaces the tattered log-book of the Labor Party- a log-book of shame, of deceit and of dishonesty; a log-book whose pages record loutish behaviour of politicians who tried to destroy the standards of parliamentary behaviour by snubbing the Queen’s magnificent representative, the GovernorGeneral. In effect, by eating the lamingtons and the cream puffs they took the cash but they let the credit go.

The thought that is ingrained in the GovernorGeneral ‘s Speech is the preservation of democracy in Australia. We have a star to aim for- the fulfilment of the high ideals of citizenship wherein each person is capable of playing his or her part, making his or her contribution to the development of the Australian ethos through its various nuances. That aim has been thwarted over the last 3 years by a display of political banditry from some members of the Australian Labor Party fully supported, I submit, by the left-wing industrial union backroom boysHawke, Carmichael, Halfpenny and Elliott.

There is only one place for bandits and that is in gaol, and that is where the Australian people put them on 13 December last. There was no better example of this than in Queensland. Inspired by the leadership of Premier Joh Bjelke-Petersen and the example that flows automatically from his statesmanship, from his leadership and from his eternal fight against the cancer of socialism, against the festering sore of dishonesty and deceit, such as the loan affair and the jobs for the boys and girls, against the lone ranger attitude of the then Prime Minister, the honourable E. G. Whitlam, Queensland people- thank heaven for them- like the great St Patrick of yesteryear banished the serpents into the sea. True it is a few escaped. There was only one in Queensland but we will round him up at the next election and give him the treatment that his Party’s handout mentality and money grows-on-trees attitude thoroughly deserves. That will be his just sentence.

For the Hansard record, the following election results tell the tale in Queensland and the Queenslanders response to the challenge that was thrown out to them by the good decent men in the Senate who set in motion the machinery which allowed Sir John Kerr to be enshrined in the annals of this country as a statesman and a person who refused to bow to what the Labor Party manipulators believed was an irresistible force. Sir John Kerr will be remembered long after the ghosts of the Labor Party because he was a lover of freedom, a defender and upholder of democracy, a man who not only believed in democracy but who knew that once you limit it you virtually lose it.

Queensland was the first to wake up to the insidious moves being made by the Australian Labor Party to capture the Treasury bench of this country. The election in 1969 indicated in Queensland, even at that time, a 0.4 per cent swing against the Australian Labor Party. In 1974 this swing increased to 4.015 per cent and in 1975 to 5 per cent. It is interesting to note that in the 1975 election the National Country Party obtained 37.8 per cent of the votes in the electorates it contested, a 4 per cent increase on the 1972 result, and obtained a grand total of 26.7 per cent of the total votes registered in that State. We note the progress of the National Country Party in the metropolitan area too where its percentage of the vote doubled in the period between 1974 and 1975. We also obtained 25 per cent of the vote in the electorate of Oxley.

I comment briefly on remarks made by the honourable member for Melbourne Ports (Mr Crean) recorded at page 62 of Hansard for 18

February 1976. The honourable member is a most gentle soul. We all admire him. We like his company. However, as he aspired to the leadership of his Party just a few short weeks ago one must expose his amateurism. Possibly it is to be regretted that, as we say in the bush, he was narrowly rolled. According to the Press today, possibly he will get another opportunity, a second bite of the cherry. But I suggest to the honourable member that, if his Party wants to get back to the better days of the Labor Party as it was under Chifley and Curtin and to escape from the claws and the iron clad fists of the left wing academics and pseudo-intellectuals, he as one who aspires to be the alternative Leader of the opposition must get his head out of the sand and slush.

He was a Minister of the Government which was in power for 3 years- which, of course, was 3 years too long- and he then had plenty of opportunities to change the Constitution. After all, what difference would one more constitutional proposition by his Leader have made? His leader’s track work in this regard was champion but his race result, which is what matters, was dismal. He was last on every occasion. The honourable member’s contribution in the debate to the Constitution was a lamentably poor one. His feeble lamb’s bleat of trying to defend the indefensible was a poor response to the lion’s roar of the verdict of the Australian people on 13 December. I want to say to the honourable member in reply to his remarks, and I am not being vindictive because I have a personal regard for him: Thank heavens we have a written Constitution and thank heavens we have men like Sir Garfield Barwick who can interpret that Constitution according to law and what is said, and not what a power-hungry band of men who want to cling desperately to power hope it might say if words can be bent to suit their insatiable demands.

The first paragraph of the Governor-General ‘s Speech is indicative of good government and the framework through which it should operate. Concern is expressed at the flood damage, proving that this Government is a human one, alive to and aware of people and their position. But people cannot live or exist on concern. They desire and are entitled to proper assistance from governments and from the generosity and charity of people who are not caught up in the debris of a natural disaster. It is appropriate, therefore, to give consideration to the setting up of a real national disaster fund. The time to act is nownot when a disaster has occurred. Emotions are too highly charged in that atmosphere. To me freedom indicates an absence of unfettered control by governments. That is my political philosophy and is the opposite, of course, to socialism. No fund ought to be set up which puts all the responsibility on the Government. After all, governments usually do not make natural disasters- except, of course, the Whitlam Administration- and neither do people or insurance companies. But when they occur something has to be done to rectify what in many cases is enormous damage, to alleviate personal hardship and to guide people through their emotional traumas.

The rules and formulae in these matters of personal, State and Commonwealth responsibility are well known but they need clarifying, updating and modifying. Out of every disaster we learn something, and it is our responsibility as political administrators to apply the lessons learnt. I make an appeal to the Prime Minister (Mr Malcolm Fraser) to act as a convenor of Federal, State and local authorities, insurance companies, banks, social workers and people for a meeting to pool ideas and to act as a catalyst which will perform a great national duty and bring a system of ordered activity out of what is insufficient organisation. The problems are many. A disaster is not merely a major disaster, as defined under the formula, when 10 per cent of the base figure allocated to a State in any one year is reached through damage inflicted in any one occurrence. For instance, a frightening hailstorm which swept through Toowoomba and left a scarred trail of unimaginable damage may not qualify as a major disaster because there were few State Government buildings in the area and because few local government faculties were damaged. But private schools, hospitals, nursing homes and private homes were battered and destroyed beyond recognition. Small croppers, who are unable to obtain insurance cover, have lost their livelihood.

A lifetime of belongings and personal possessions, saturated by cyclonic rains which poured relentlessly through roofs and windows unable to be repaired from the hailstorm of a few days before, have been lost and destroyed. Five thousand homes out of a total city of 16 000 have been affected. An estimated $ 10m to $20m damage has been done. Yet Toowoomba possibly will not be considered for Commonwealth help because it does not come under the formula as at present defined. Are insurance companies to be expected to pay the full price of such disasters? I think not. If they are, they will price themselves out of the market. People will not be able to afford the premiums. What is a necessity will then become a luxury. The present formula benefits governments, but in the final analysis governments are people and the expression of the will of the people.

Should the formula cover basically the dividing line between responsibility for paying the bills as between the States and the Government or should the formula cover the dividing line in a more meaningful, just and charitable way as between individual and local, State and Federal governments? I believe that it should be. These matters have to be hammered out on the anvil of discussion between the reasoned mind of the public and a responsible attitude of commerce and government. We all have a responsibility to take out insurance cover on ourselves. I have absolutely no sympathy for the rugged individual who refuses to take out insurance, adopting an attitude of ‘It won’t happen to me’ but who bellows like a scrub bull when he gets hurt and demands help from all and sundry. But I, members of my party and members of the Liberal Party have the greatest sympathy for pensioners, the poor and the underprivileged who cannot afford even moderate cover for their possessions. There is no one more deserving of our sympathy and help than the elderly people who have been caught out by time in an inflationary spiral, with values of possessions to be replaced increasing; and the cost of repairs going through the ceiling. These grand old people have not been able to keep pace with the jet set era.

No one is to blame- yet we are all to blame. Have we been silent and inactive too long? Have we preferred to talk rather than to act? I think so. Talk will not replace one sheet of iron on a pensioner’s roof; neither will it replace a broken window in a school, a hospital or a nursing home. It will not put the fractured leaves of a lettuce plant back together to allow it to be cut from the soil and displayed on the greengrocer’s stand. But the results of a determined, practical approach to solve the financial, - emotional and personal trauma resulting from natural disasters will herald the solution to one of our great present problems. The current procedure is not good enough. We need educational programs. The insurance companies have done their part in this regard but more needs to be done. Let governments show the way. I hope that over the life of this Thirtieth Parliament, under the leadership that will be given by the Government, we can do something meaningful to overcome the problems that inevitably will flow from natural disasters. I believe that the time for talking is past; the time for action is present. . For the first time in 3 years there is a certainty abounding in all spheres of the Australian community. No one is in doubt. This Government is not the weak reed of Whitlamism bending even in the slightest breeze. It is a Government strong in character, resolute in purpose, determined to beat the twin problems of inflation and unemployment whilst not forgetting about the defence of our country. We realise that we cannot take the easy way out. Plunged as we are into a financial well, left with the Hayden Budget deficit of $4.7 billion, we are prepared to use the financial pruning shears to cut the reckless spending extravagances of the last 3 years. Choices will be made but they will be choices made by statesmen and leaders, not men who were mere tools of the communist led trade unions.

There is a crisis in our economy but I hope that by concentrating on it we do not forget our defence system. We have not heard too much about it in recent times. It was gratifying, therefore, to see so much space devoted to defence in the Governor-General’s Speech. Our support is to be given to our allies and friends. We stand foursquare behind the development of Diego Garcia. The Indian Ocean is not only for the Russian fleet. We are a rich country with huge natural resources which are the envy of the world and we aim to keep these resources under our control. Morale in the serving forces has been increased because servicemen have confidence in a government which has its priorities right and will keep them in the forefront with modern weapons whether they be in the Navy, Army or Air Force.

However, the people will need to fight. They cannot relax. We particularly require the support of responsible trade unionists. We will give them the machinery to control their own unions rather than be controlled by self-elected communist leaders. The election of democratically minded Labor men will make unions progressive and trustworthy again. The trade unions want leaders, not saboteurs. They want men who will confront such ferocity with will. They want men fostered by those unions which have an almost unlimited capacity to seek the good things in our society. They have to oppose such unions as the Amalgamated Metal Workers Union, which led by Laurie Carmichael, will have a $10m fee income to spend on activities such as the gestapo tactics employed by certain trade unions in the last election, unions which stood over men demanding money and ordering them to leave their jobs to attend meetings addressed by the former Prime Minister.

The Fraser-Anthony Government will redress the wrong done to primary industry. Primary industry bore the full brutal attack of the previous Administration. It received no consideration, no help and no sympathy. Instead it was throttled and strangled. The Bureau of Agricultural Economics report covering the period September 1973 to September 1975 reveals that the average cost of inputs weighted in the index according to their usage increased by 58 per cent. Fuel costs increased by 70 per cent, insurance costs by 137 per cent, fertiliser costs by 214 per cent and transport costs by 35 per cent. No wonder the average age in the Australian farming community has increased by 9 years in the last 10 years. Young farmers are not being attracted to this occupation. However, we have been reassured that they will be in the future. There is to be a rural bank and farmers are to be eligible for a home savings grant when building a home on the farm. When legislation to establish the rural bank is being framed I hope that consideration will be given to making funds available -

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

Dr JENKINS:
Scullin

– It is always a pleasure to follow the honourable member for Darling Downs (Mr McVeigh) in debate because we always have from him flowery phrases and not much substance. At the beginning of his speech he quoted from Tennyson. Looking at the Government benches I feel like quoting from Tennyson too and saying that the coalition parties remind me of Tennyson’s Charge of the Light Brigade- Into the valley of death rode the six hundred ‘. That is what the coalition is doing. This brash group, uplifted by what occurred under snide circumstances in December last year, is charging headstrong into a situation that will lead to its own destruction. What disturbed me more though about the honourable member’s speech was that earlier in it he named certain union leaders and uttered an open threat to them by saying that the people had gaoled them on 13 December. In other words, any union leader carrying out his duties is threatened by this Government with imprisonment. That is a tactic that has been used by totalitarian regimes throughout the world. It is usually done by putting a political tag on a particular union leader. The honourable member does not judge the sense of the people in these matters.

I would remind him of the occasion when Clarrie 0 ‘Shea was gaoled by Mr Justice Kerr for carrying out the wishes of his union members on an industrial matter and not because of his political complexion. Mr Justice Kerr committed him to gaol and the whole industrial union movement, not just one pan with a certain political complexion, got behind him. The honourable member well knows how that matter was resolved. That was brought about by a man whom the honourable member professes to admire. When I hear a Queenslander talking about responsible Labor men taking positions I can believe only that he is referring to the opinion of his colleague the Premier of Queensland and the former Senator Albert Field. Apparently they represent the outstanding Labor men in whom the honourable member believes.

Also, during his speech, he called for a committee to deal with disasters. For many years the coalition parties when in government did not have a great deal of faith in committees of inquiry even when they were comprised of persons with interest in the particular field being investigated. Just recently the Government terminated a number of committees that were set up by the Labor Government. Admittedly most of them had finished their inquiries and would not have incurred further expenditure, but I point out that the committees which his coalition Government decries- he apparently does not agree with the Government because he has asked for another one to be established- in the last 3 years have given enough basic information to government, information that was not known before, to guide governments of whatever complexion in their actions for many years to come. Mr Deputy Speaker, I was provoked into making those comments.

I have already congratulated you, Mr Deputy Speaker, and Mr Speaker, on your election to your offices. Having had some experience, albeit rather short, in your position, I know what the duties are like and I wish you and Mr Speaker well. We have heard in this Address-in-Reply debate a series of maiden speeches from new members. I congratulate those new members on their maiden speeches. I am one of those rare people who have had the opportunity to make 2 maiden speeches because of membership in two different parliaments. I know that they all have felt the sense of importance of coming into the Federal Parliament. If they have not got that sense of awe, that sense of satisfaction, I hope that their colleagues see that they pretty soon go out of this Parliament. I accept that in their maiden speeches there was much with which I would disagree but I accept also the sincerity with which they have put forward their point of view and congratulate them on the way they have put it forward. I hope now that they settle down to the hurley burley of parliamentary politics and what will go on in the legislation before the House. They will come to know that there is a lot of work that is not done in this chamber. They will find that members of both sides of the House in committees can co-operate and bring meaningful reports and answers to the Parliament. I look forward to working with some of them in that capacity.

I have listened with some interest both when I have been in the chamber and when I have been in my office to the general discussion that has gone on in the Address-in-Reply debate. I have listened to what has been said by my colleagues on this side of the House and I wish now to move an amendment to the motion that has been moved in connection with the Address-in-Reply. I move:

In speaking to the amendment, one cannot help referring to the circumstances of the last election. I shall not go into the detail of how that election was brought about. That matter has already been quite widely canvassed by other honourable members in their discussion of the roles of the Governor-General, the roles of the Prime Minister, and so on. What I do want to say is that there is an attitude amongst honourable members that this matter is over and done with, that a decision by the people electing a government is sufficient answer to the constitutional question and the question of how this Parliament should operate. I can remember that in 1966, although I was not in the Federal Parliament then, the Party to which I belong suffered a crushing defeat in Federal elections. It suffered that defeat on the basis of its opposition to the Vietnam involvement and conscription. Despite that defeat it forced people to continue to consider the matter. It continued to put forward its arguments. It did not say that that vote was the end of the matter, and history has provided the answer. My Party was wise to have continued in that argument because country after country reached the same conclusion to which the Australian Labor Party had come. In fact, the electorate suffered some pangs of conscience, and that was shown in its subsequent voting.

So it would be wrong not to discuss these sorts of issues, even if honourable members opposite deride us for doing so and say that we are moaning. I have won a few contests in my life and lost quite a few others and I have never grizzled. I am not grizzling now. Those members of the Parliament who know me know that over the years, despite the fact that I am given a left wing label- I do not apologise for that label, although I believe that those sorts of labels serve no purposethere has never been any doubt about my belief in the parliamentary institution and how it operates. Yet, after all those years, following the recent incidents, I have found my confidence in that institution somewhat lessened. Those incidents led me to think about these matters and decide that they are worth pushing.

We all generally understand what the Westminster system of Parliament is. Yet I think that very few of us realise the differences there are between parliaments that are classified as operating under that system. Of those parliaments which I have visited and investigated there are very few indeed- I think most of them are in the States of Australia- that have the same system as our Federal Parliament in which can occur the situation we had last year which was brought about by the upper House having financial preeminence over the Lower House. It must lead us to think about how the Senate ‘s powers should be defined. It is surely accepted that the Government is formed in the House of Representatives. If that is so, that House must have financial preeminence, otherwise after each election when it came to the formation of a government the question would arise as to who can form a government. Unless a majority is held in both Houses by a party or by coalition parties, in the circumstances of last year the respective parties could no longer claim that they could form a government which, with confidence, could obtain the finance for operation. So we have to give some thought to what protection can be given, what action can be taken. Honourable members may think it is desirable that that sort of confused situation persist. All right, if they believe that is so, that is fair enough. Some of us do not choose to believe that is so. We believe that the Government should be formed in the House of Representatives, in the lower House.

Another matter I wish to raise concerns replacements in the Senate. That matter becomes more important for those honourable members who believe that the Senate and the House of Representatives should have equal powers. If that is to be so we surely should ensure that replacements of deceased or retired members should come from the same party as the person who is being replaced. We should take action to ensure that. Other questions, I believe, need to be asked with regard to the constitutional requirements. It would seem that for a brief period in Australia His Excellency the GovernorGeneral has more power than the Queen whom he represents. I think that is something to which honourable members must give thought in order to see how it can be resolved.

The final part of my amendment refers to the question of the economy and refers specifically to the fact that middle and low income families are going to suffer most under this Government’s administration. In the Governor-General’s Speech this statement appears:

We have a unique opportunity to establish in Australia a truly liberal-

The word ‘ liberal ‘ is spelt with a small ‘1 ‘- and humane society- to demonstrate that independence and freedom are not only compatible with action to assist the disadvantaged but inseparable from it.

No one would disagree with that. Those were the principles upon which the Labor Government tried to act in the last 3 years. But the actions which have been taken now are not compatible with that statement. The terms of the matter of public importance this morning mentioned some of the disadvantages that were occurring. In the social welfare field pensioners have been deprived of several million dollars because of delay and refusal to pay a benefit which they had been receiving for some time. I asked a question this morning with regard to the softwoods agreement. Many people in the rural areas in the States are concerned that there is no indication that that agreement will be continued after its expiry this year. That agreement is even more important than the superphosphate bounty in some of these country areas, because the superphosphate bounty does not benefit the small bloke too much. It might benefit the big farmer. But the proper conduct of forestry operations in country areas keeps the ordinary worker and his family in those country areas. Yet the forestry agreement is about to expire and workers in the industry are not certain of their future. No wonder the States are concerned.

Mr King:

– What about the worker on the big farm?

Dr JENKINS:

-I do not see that that is relevant to forestry agreements.

Mr King:

– It is relevant to superphosphate.

Dr JENKINS:

– That may be so, but I think we have to balance the transfer of resources so that the best use is obtained by the largest number.

We are told in the words of the Treasurer (Mr Lynch) that there are no soft options. It has become an article of faith that public spending can be no use in time of recession. Not everyone agrees with that and there are differing opinions on it world-wide. Some of the expenditure cuts have been foolish in the extreme. In the Governor-General’s Speech Commonwealth public servants are talked about as ‘bureaucrats’ and the ‘Federal bureaucracy’ is mentioned. Public servants need not be bureaucrats. It seems to be part and parcel of the ‘Kick a public servant today ‘ approach.

This Parliament and Australian governments have been served well by their public servants. There are exceptions in private enterprise as well as in public enterprise. It is about time the Government got away from this ‘Kick a public servant a day’ approach in order to destroy confidence in the public sector of activity when that public sector has added much to our community. Free enterprise is talked of so widely- a free enterprise in which one can trust one ‘s arm to get one’s profit and benefit from it provided one is protected by government subsidies, bounties and every assistance under the sun. When are we going to get that into perspective? If the Government wants to talk about free enterprise and private enterprise they should be defined. Government supporters spend most of their time protecting private enterprise at the cost of the ordinary low and middle income earners. Give them a thought. Honourable members opposite should start making up their minds about public expenditure and private expenditure because a lot of their talk is hollow. A lot of that private expenditure will not go on unless there is massive Government support. That is part of what happened during the term of the Labor Government. There was a strike of capital because private enterprise could not wring the advantages out of a Labor Government that they could out of the coalition parties which they helped to finance in their campaign to gain government. Mr Deputy Speaker, I commend the amendment I have moved to the House.

Mr DEPUTY SPEAKER (Mr Lucock:

-Is the amendment seconded?

Mr Uren:

– Yes, Mr Deputy Speaker. I second the amendment moved by the honourable member for Scullin and reserve my right to speak later.

Mr BROWN:
Diamond Valley

-Mr Deputy Speaker-

Mr King:

– This is his second maiden speech.

Mr BROWN:

-Like many other honourable members, Mr Deputy Speaker, I wish to convey my congratulations to you and through you to the Speaker upon your election to your respective high offices. At a time when the parliamentary system is under challenge both here and overseas there is indeed a very heavy responsibility upon you both. I am confident that you will carry out and exercise that responsibility in the best traditions of those offices that you hold and to preserve the democratic government system under which we live.

The honourable member for Scullin (Dr Jenkins) has moved an amendment to the principal motion before the House. I wish by way of introduction to address a few remarks to the House about that amendment. The honourable member said that he was not moaning. I accept him at face value on that. But, with respect, it does seem to be yet another instalment of the continuing whinge about the great constitutional issue that rocked Australia last year. I do not object to speaking about this issue, but before we analyse it I do wish we could get some basic principles into perspective. The most basic principle of all about this issue is that the Opposition, when it was in government, was intending and attempting to govern as an executive without the approval of this Parliament. The then Prime Minister, like some petulant Stuart king, was endeavouring to govern this country with money raised not through proper appropriations of the Parliament but by any means that he could to obtain the money with which to govern. He was prepared to use the Audit Act; he was prepared to borrow money from the banks; he was prepared to go on governing without any new appropriation of any form. No matter where the money came from he was prepared to govern as long as he could remain in office.

If there is a safeguard in our parliamentary system of government- and there is- it is the reserve power that exists in the GovernorGeneral to dismiss a government when it persists in attempting to govern without appropriations from the Parliament. Let us not forget that as a basic principle of our system. In the Australian context, let us not forget that there is an equally important principle, that is, that the Parliament in this country consists not only of the House of Representatives but of the Queen, the Senate and the House of Representatives. It is through that procedure that appropriation legislation must pass before any executive government can continue governing this country. That is what the constitutional issue is and that is where the breach of the Constitution by the previous

Government took place. One could say a great deal about this issue. One could quote academic lawyers, some of whom I regret to say were in the pay of the previous Government although they held themselves out as being independent. One could quote textbooks and opinions until the cows come home, if honourable members will excuse that rural expression.

I want to refer to an extract which seems to me to sum up the whole constitutional issue. It is a one sentence observation made by the prestigious English magazine The Economist. It was written only a few days after the previous Government was dismissed and I suggest to the House that it summarises the whole of the constitution issue.

A society in which the government of the day can do almost anything it likes with the support of a transient majority in a single assembly is more vulnerable to the abuse of power than one in which government is circumscribed by countervailing institutions such as a strong upper House.

I ask honourable members to put that in the context of Australia in November and December last year. That Government certainly was vulnerable to the abuse of power. It would have become more vulnerable to the abuse of power if the Governor-General had not exercised the reserve power in him to insist that a government cannot continue to govern unless it passes appropriation legislation through the Parliament. The Parliament, as I said, consists of the Queen, the Senate and the House of Representatives. One could go on arguing about this all day. I mention these points because they are basic principles. Before one can discuss the argument contained in the amendment, one must understand that they are the basic principles upon which the Australian constitutional and parliamentary system exists.

The honourable member for Wimmera, who interjected earlier, said that this was my second maiden speech. It is not. There must be some expression to describe a speech made by someone who has been absent from the Parliament for 3 years, as I have. There must be some expression other than ‘maiden speech’ which can be used. Although I have searched the dictionary of antonyms I cannot find such an expression. Nevertheless, I think it is wise to remember that one who has been absent from the Parliament during the salutary experience of being out of office for 3 years is probably in a valuable position to see from the outside the way in which society has changed and the way government has gone during his absence. I trust that the House will excuse me if I make some general observations about what has happened to this country and to our society during the last 3 years.

One can learn a lot during the salutary experience of being out of Parliament. The odd thing, however, about some people in politics, some political parties and above all some leaders of political parties, is that they do not seem to learn very much from a period of government or a period of opposition. If one looks at the speech made by the Leader of the Opposition (Mr E. G. Whitlam) just 2 days ago one might be excused for reaching the conclusion that he does not seem to have learned very much over the last 3 years, nor does his Party. One can analyse that speech in detail, but I do not wish to do so. I suggest that there are 2 touchstones, 2 keys in that speech which indicate the Labor Party’s attitude to society and government. There are 2 themes that run through it which show why the Labor Party is on the other side of the House now and why it will probably remain threre. The first of these themes is the economic issue and, Mr Deputy Speaker, you will recall that the Leader of the Opposition, in his speech the other night said that we on this side of the Parliament were the men who ‘obstructed all economic and social reforms’. These were the economic and social reforms which apparently took place in the last 3 years while I was absent from the Parliament.

Let us look at what these reforms are. I was intrigued when I heard the expression used by the Leader of the Opposition. What are the economic reforms that took place during the last 3 years? Was one the record unemployment that racked this country and above all damaged the very people, the small people to whom the honourable member for Scullin referred in his amendment? Was that one of the reforms? Was one the inflation that continued through that 3-year period and which ate into the savings of those very same people whom the honourable member for Scullin mentions in his amendment? Were the reforms the decay of our great rural industries over the last 3 years and the rising interest rates that affected us all? Was one of them the increasing taxation burden which has sapped the initiative of all people who rely on their own effort and self-help to earn a living? Was one of the reforms the new wave of tariff cuts that almost destroyed a number of industries in Australia such as the textile industry, the clothing industry and the footwear industry? Was that an economic reform that came into operation over the last 3 years? Was the doubling of the Federal Budget in 3 years one of the reforms? It is extraordinary that a Leader of the Opposition can stand up at a time when he has gone out of office, having brought the country to the brink of economic disaster, and say that during his period of government economic reforms were introduced, and then go on and have the impertinence to say that we obstructed those economic reforms. That is quite extraordinary.

Again one can see from the Leader of the Opposition’s speech just what attitude he takes towards the dynamic forces in our society which can restore the economy of Australia to what it was. He refers to the encouragement of enterprise. How does he describe the encouragement of enterprise? He describes that as a cliche. It is not an inbuilt strength in the economy which can revitalise industry, which can increase employment, which can tend to lower inflation, it is none of that to the Leader of the Opposition; to him it is a cliche. It is bureaucratic domination, with the enormous increase in the Federal Budget. If we point to bureaucratic domination he describes that as a cliche. That is a fairly good indication of the way in which the Leader of the Opposition sees this country and this society.

The same principles are not confined only to economic matters; they go further than that. They go to the whole realm of the individual’s involvement in society. It is well that we should bear in mind the concern of people these days that they should have some involvement in the power structure that surrounds them. The other day the honourable member for Casey (Mr Falconer) eloquently referred to the desire of people to participate in their field of employment. That is not the only field in which the individual wishes to participate. He wishes to participate in his government; he wishes to make sure that the democratic system under which he is governed is a system that enables him to express his views and opinions and to have those views respected by a government which can carry them out. Above all he wants to have some involvement in his trade union if he is a unionist. One honourable member made some brief remarks about the proposal that secret ballots should be introduced for the election of office bearers in trade unions. We have committed ourselves to that principle.

It is very enlightening, I would suggest, and very instructive to see what is said by those who are opposed to that principle of secret ballots for the election of union office bearers. Of course, one of the most vocal opponents of this proposal is Mr Halfpenny of the Amalgamated Metal Workers Union. He, like some other people on the other side of the House and in the trade union movement, says: ‘We already have secret ballots’. Such people point to the Conciliation and Arbitration Act and say that an organisation cannot be registered unless provision is made in its rules for the election of its office bearers by secret ballot. Of course the office bearers of the Amalgamated Metal Workers Union are elected by a secret ballot. What sort of secret ballot is it? It is a ballot conducted in the union offices. We want secret ballots conducted by the Commonwealth Electoral Office to ensure that the individual member of a trade union has a free and unqualified opportunity to express his view on who should govern him in that power structure known as his trade union. That is vital.

What is the situation with regard to the conduct of trade union ballots in that union of which I am speaking? They are conducted by a returning officer- not an outside independent personwho is an official of the union. The election takes place in the union offices. I do not know much about the internal workings of the offices of the Amalgamated Metal Workers Union but I think it would take a high degree of charity to regard them as anything like the implementation of a proper system of democratic elections. It is extremely unlikely that that union’s election of office bearers is conducted on any democratic principles at all. No doubt Mr Halfpenny and his colleagues would point again to the rules of their organisation which say that not only is the election of office bearers to be conducted by a secret ballot but also there is an enforcement provision; there is- to use that dreadful expression- a penal clause in the rules of that union to guarantee that the election is conducted properly. What exactly does that clause state? It states that if there is any attempt to intimidate people in the course of their voting or if there is any attempt to manipulate the election, a fine shall be imposed on the person responsible. The minimum fine is the grand sum of 25c and the maximum is $2. One can imagine how the prospect of a fine of 25c or $2 would terrorise anyone in that union who might be tempted to exert any influence over the conduct of an election in that union.

We say that individual trade unionists have the right to have a proper say in the governing of the affairs of their trade union. They can have that say only if they have a free and unqualified opportunity to elect the office bearers of their union by a free ballot conducted under the supervision of the Commonwealth Electoral Office. Until they have that say we cannot describe the election of those office bearers as a democratic process. I say that because it is important, particularly in this day and age, that individuals should have an opportunity to have some participation in the power structure which surrounds them, whether it is the Government, their trade union or their place of employment.

Mr Uren:

– Or the Liberal Party.

Mr BROWN:

-Or the Liberal Party. What a contrast our organisation is to the organisation with which the honourable member is involved.

Mr Uren:

– I understand that you have had a couple of quick ballots lately.

Mr BROWN:

-I understand that a new ballot will be conducted in the Labor Party Caucus room in the very near future. I return briefly to the amendment moved by the honourable member for Scullin. In my submission it should be rejected by this House. In his amendment the honourable member said: . . . the Speech-

That is the Governor-General ‘s Speech- makes no acknowledgement of the financial pre-eminence of the House of Representatives . . .

The honourable member might realise that the Budget is introduced into the House of Representatives. He might have noticed, if he had been in the chamber earlier today, that there were pieces of financial legislation introduced into the House of Representatives. He might know that from here those Bills will go to the Senate. If that does not illustrate the financial pre-eminence of the House of Representatives, I do not know what it does. In his amendment the honourable member for Scullin went on to say that: … the speech makes no reference to the need for action to ensure that there cannot be a recurrence of the Constitutional crisis which threatens the continuation of the Australian Parliamentary system . . .

If there is a threat to the continuation of the parliamentary system it is the threat imposed by those who will not work through the parliamentary system. That system requires government by the Senate and by the House of Representatives. The reason for the downfall of the previous Government was that it was not prepared to work through that dual system of government. Finally, the amendment of the honourable member for Scullin stated: … the proposals outlined in the Speech are so framed as to cause a major transfer of resources from the middle and low income families to those on higher income levels.

What an absurd proposition that is. Probably it occurred under the previous Government. The people most harmed by the inflationary excessed, by the high unemployment and by the high interest rates that existed over the last 3 years were those very people, the middle and low income families. Those on higher incomes were able to a large extent to protect themselves. It was the people on the low and middle incomes who were not able to protect themselves and who suffered most from the excesses of the previous Government. The workers in the textile factories, the workers in the footwear factories and the workers in the clothing factories would laugh themselves stupid if they saw this part of the amendment. As I said at the outset, it is interesting to see what has happened to the country, to the Government of this country and to the economy of this country during the last 3 years. My distress and disappointment at what happened to this country over the last 3 years is relieved, I am happy to say, by an unqualified confidence that the next 3 years will not only right those wrongs, will not only put this country back onto a sound economic footing, but also will take this country to the greatness that I think is in store for it.

Mr UREN:
Reid

– I second the amendment moved by the honourable member for Scullin (Dr Jenkins) to the motion relating to the Address-in-Reply, the only thing I want to say in reply to the comments of the honourable member for Diamond Valley (Mr Brown) is that the Party to which he belongs tore up the rule book, and the conservative forces of this country will rue the day that they took such action on 1 1 November 1975 and the weeks preceding it.

The Governor-General’s Speech was notable for its failure to acknowledge the election promises of this Government. The short history of this Government already is characterised by the sacking and prosecution of a Minister. That demonstrates complete disregard for the conventions of our democracy in that the former Minister was party not only to a breach of the Constitution but also to a breach in our electoral law. This Government’s history is characterised by broken promises. It is characterised by a ruthless exercise of power on the part of the Prime Minister (Mr Malcolm Fraser). It is characterised by dissembling by the Prime Minister who is addicted to meaningless phraseology and who even puts its senior public servants at risk by saying one thing and meaning another. They cannot be blamed for that because even Mr Speaker on occasions has had difficulty in plumbing the depths of the real meaning of the Prime Minister’s words. We have heard conflicting statements, and even have been treated to public repudiation of a number of promises on a number of issues. We have had the Prime Minister being unmasked by Mr Wran, the Leader of the Opposition in New South Wales. Mr Wran also caught out Premier Willis, for publicly lying over the proposed development of

Woolloomooloo. We have had Fraser, Anthony and Greenwood making conflicting statements about Albury-Wodonga. The Prime Minister says that it is to be cut, it is to be stopped. The others say that it will not be stopped.

But by their scrapping of the Public Service transfer programs they have killed a great and exciting concept. The Prime Minister could still write to the Victorian Minister for Planning and Local Government, Mr Hunt, saying that his Government remains committed to the growth centres, especially Geelong. Or is this just another piece of window dressing for the purpose of the election campaign in Victoria?

To what does the Governor-General’s Speech refer? It refers to the Government’s setting out to help the disadvantaged by leaving him a maximum of independence. That at least is a novel way of justifying deferral of the age pension increases. The pensioners will be pleased that their newly restated independence is slowly eroding their living standards as food prices gallop ahead. This is also a novel way of justifying the cutting of deferred mortgage repayment schemes for housing loans for the low income families who are already struggling to exercise their independence.

The Governor-General’s refers to the cuts in administrative expenses but it does not explain that the burden of these cuts is carried by the lower paid officers in the Public Service. It does not explain the reduction in job opportunities for clerical assistants and secretarial staff which allows the bureaucracy to come below the staff ceilings. It does not explain that this means that it is the women especially who have been forced to carry the burden of this so-called economy measure. I hope that the newly elected honourable member for Canberra (Mr Haslem) understands clearly the pressure that these measures will cause here in Canberra. The GovernorGeneral’s Speech refers to cuts in expenditure by Ministers but it does not explain how the Prime Minister could justify the expense of a butler in his new residence. Nor does it explain the wider and freer use of VIP flights or the proposed construction and equipping of private aerodromes.

The Governor-General’s Speech is notable for many things, but it is perhaps most notable for what it does not say. Rather than range across the many obvious weaknesses and omissions I will concentrate on just two. Firstly, let me refer to the cities. There is not one reference to the cities where 85 per cent of Australians live. This Government would seem to have no conception of the problems faced in the provision of serviced land, sewerage and decent public transport. The problems faced by the people living in our major cities in obtaining access to a reasonable level of facilities is something that honourable members opposite know nothing about. So far the only initiatives of which we know that this Government has taken concerning the cities is the attempted rape of Woolloomooloo. The Woolloomooloo scheme is an example of co-operative federalism involving the agreement of 3 levels of government in an attempt to solve the problems of the inner city. It is concerned with the welfare of people and with keeping our cities as attractive and exciting places in which people can live, not stunning them into concrete jungles. We would not have known about these initiatives of scrapping the Woolloomooloo scheme had it not been for Mr Wran, the Leader of the Opposition in New South Wales.

For 2 decades we have witnessed LiberalNational Country Party governments destroying the inner cities and the cities of Australia. By their action and inaction they encouraged the over centralism of urban development with never a thought for the problems of the people of those cities. For over 20 years we fought the Government for allowing the rape of our cities by foreign investment, particularly for the overcentralisation of the cities of Sydney and Melbourne. It is like a voyager deriving some sordid satisfaction from the plunder and pillage that it encourages. By its action in allowing foreign investors and major insurance companies to acquire control of freehold land in the centre of those cities, it has returned to this sorry state.

The Government sold the farm to anyone who asked for it. It allowed the insurance companies to use the savings of the people to destroy their own way of life. This Parliament has complete power over insurance companies. Yet in the decade from 1960 to 1970 the increased investment of insurance companies in the major cities of this country increased from $ 1 12m to something like $ 1,200m. The Government engaged in asset stripping on a monumental scale when it forced the State governments to run down the public transport systems of our major cities. It acquiesced in the destruction of the inner city living space. It acquiesced in the destruction of communities by encouraging the construction of freeways through inner city residential areas. It forced the people to live in unserviced outer suburbs, without schools, hospitals and a wide variety of services and facilities which, we are continually told, are the standard for our society.

The Government systematically set out to lock people in their communities by saddling them with large mortgages on their homes. It systematically rigged electoral boundaries so that it could always look after its supporters and be in a position to abuse and disregard the Constitution when it suited the Government. In our 3 years in office we began to tackle the problems of providing sewerage and better suburban areas. We began to overcome the problems of sewerage backlog, particularly in Sydney and Melbourne. In Melbourne alone we have spent tens of millions of dollars trying to catch up the sewerage backlog and the pollution of Port Phillip Bay. We made massive investments in public transport. We showed our confidence in and recognition of the need for good local services by making funds generously available to local government. We initiated programs to tackle the high price of residential land, and we succeeded in curbing the rising price of residential land for young people. We developed growth centres to reduce the pressure on Sydney and Melbourne and to provide country people with access to a higher standard and wider range of services. We started to change the distribution of employment in the cities to give the outer suburban population reasonable access to jobs.

We took action to protect the National Estate. Now we note from the Speech that the Government has learnt nothing and cares nothing for the people in the cities or the way they want to live. The people have been deluded into accepting that $1 spent on essential public services is somehow inflationary or somehow immoral, whereas $1 spent by the private individual is not. This is a fallacy and a myth and must be exploded quickly. The decision not to staff the Heritage Commission and now its foreshadowed abolition is an attack on our people, our birthright, our heritage. This Government has succumbed to the bulldozer mentality that it permitted between the years 1950 and 1972. The cutbacks already proposed in the urban programs and the failure in this Speech to acknowledge their needs are a direct attack on the quality of life and the standard of living of all Australians. It must be understood that 85 per cent of Australians live in our cities. The Government talks about incentives for private industry and the need for business confidence. Where is the endorsement of the growth centre program which is absolutely fundamental if private enterprise is to plan confidently and to continue investment in these centres?

The only reference made to housing in the Governor-Genral’s Speech is to the effect that the Government will introduce legislation to establish a new home savings grant scheme.

However, the public is left with numerous uncertainties. We are not told when the scheme will commence or how it will operate. We are told that for a family to be eligible for a maximum grant under this scheme it must save at least $26 per week for 3 years. The Government has failed to understand that the real problems faced by people in purchasing a home today are as much in servicing the land as in the initial deposit. The previous home savings grant scheme worked very much to the disadvantage of lower income families.

This proposed home savings grant scheme is symptomatic of this Government’s attitudes and its policies. It is just like the superphosphate bounty scheme- only the rich really benefit. An Australian Labor Party government by now would have been lending money on more flexible repayment terms to assist families in making their housing repayments in accordance with their means. All this has been destroyed now that the Government has decided to abolish the Australian Housing Corporation.

I turn now to the economy. The GovernorGeneral’s Speech refers to unemployment. It purports to seek to stimulate investment and to reduce unemployment. Every action this Government has taken has increased unemployment. I stress that fact. We initiated a program to stimulate investment in the non-housing sector of the building industry, which is near total collapse now. What did the Fraser Government do? It scrapped the proposal to expend $80m to stimulate the building sector in selected areas of cities and growth centres. We agreed to maintain the rate of construction of government housing. We increased the expenditure on welfare housing from $167m in the last year of the McMahon Government to $365m for this financial year. We would have been prepared to increase that amount further at the latter part of the second financial year if the States needed the extra finance. But it is clear from recent statements that this Government will not do that. This will lead to more unemployment.

The Prime Minister and the Treasurer (Mr Lynch) talk of increasing confidence in the economy yet the Prime Minister reneged on his election promise on wage indexation. Is that the way to increase confidence? We have been told that the economy is in bad shape and that we must reduce expenditure. But the new Government cannot find areas of wasteful expenditure. In any event, the new subsidies for superphosphate and the other tax investment allowances will result in a net increase in the deficit. In managing the economy the Government is obsessed with the problem of the money supply. Its simple-minded Friedmanite approach fails to understand that the rate at which money circulates is at’ least as important as the volume of money. Moreover, their broad-brush approach ignores the problems of particular industries, in particular the sectors of our community which were ignored for the 2 decades prior to 1972.

We have an incredible spectacle of the Government’s ill-judged savings bond draining money off from savings banks and building societies. The immediate effect of this will be to reduce the rate of lending for housing which would utilise still under-employed resources. In other words, unemployment will be increased. At the same time the Government has decided to continue the suspension of quarterly tax instalments. The only certain thing about that decision is that it will add to the money supply in the short run, and cause an even bigger crunch when those tax instalments eventually are paid later in the year.

By what logic does the Government drain off the money supply on the one hand and then increase it on the other? The money was doing some good while it was being lent for housing and for public works construction. But to cut back on this while increasing Government liquidity for a few months will only change the circulation of the money supply and make no difference to company investment. For some obscure reason the Government believes that this country will experience an investment-led recovery. That is contrary to the experience and predictions of other countries. The only member country of the Organisation for Economic Cooperation and Development to try this was France and it dropped it because it did not work The OECD is cautioning against investment allowances. For example, it says in its most recent Economic Outlook.

Business fixed investment seems unlikely to become a major factor of strength until economic slack is significantly lower than at present.

All that the much bandied investment allowance will do will be to increase the profits of private companies. The money going to private companies will be paid for in a way that will result in people suffering. It will come from the cancellation of various welfare programs, the deferring of the pension increases, the introduction of subsidies to rich farmers, the tax allowances to increase company profits, the inconsistent behaviour in relation to the money supply and the haste to get out of public participation in development and exploitation of our mineral and energy resources. Even the governments of countries like France and Germany have no hesitation in being involved in the exploitation of their wealth in respect of uranium and other minerals, but this is not the case with our country. We do not want to involve ourselves.

Honourable members opposite do not want to soil their hands with public ownership. They want to sell out to foreign interests. They do not want to develop Australia’s wealth in our own way. The abject grovelling of the Deputy Prime Minister (Mr Anthony) in Japan trying to give away our iron ore and coal was in fact a sorry state for Australia. It is clear that this is a big business government. We have to understand that the Government clearly represents that 2 per cent of companies- these 400 companies out of the 200 000 companies that make out taxation returns; that 2 per cent of companies which made $2,000m alone last year which was 50 per cent of the profits of all companies. It is clear that the Government aim is to achieve so-called economic stability at the cost of lowering the living standards of working Australians.

The Governor-General’s Speech reveals at once the poverty of ideas of the Fraser Government and the naked aggression it will employ ruthlessly to exploit the lower income groups in our society for the advantage of the rich and the wealthy. This is the group that the so-called Liberals stand for in this place. Honourable members opposite represent a very select group of people in Australia- a few people and few powerful companies. Honourable members opposite are the charlatans of those companies. I ask all honourable members to support the amendment moved by the honourable member for Scullin (Dr Jenkins).

Mr DEPUTY SPEAKER (Mr Giles:
ANGAS, SOUTH AUSTRALIA

-Before I call the honourable member for Franklin I remind the House that this is the honourable member’s maiden speech. I trust that the House will hear him in silence and wish him well.

Mr GOODLUCK:
Franklin

– It is an honour to speak during the Address-in-Reply debate. I take this .opportunity of congratulating the Speaker and the Chairman of Committees on their elevation to these two most important positions. I would also like to congratulate other honourable members who have given fine addresses as their maiden speeches.

I speak as the new member for Franklin, having taken over from Mr Ray Sherry who held the seat of Franklin with distinction for 5 years. Franklin may best be described as half of Hobart. It takes into account part of the city of Glenorchy, a busy residential area sprinkled with commercial enterprises both large and small. It also takes in the Huon channel, a predominantly rural area with several large industries concerned with fruit, carbide works and timber. This area was once renowned for a thriving apple industry. The electorate also includes the municipality of Clarence, a dormitory suburb with a small rural sector, fast growing and attractive to the young people of Hobart but with few employment opportunities. Without doubt the electorate of Franklin has some of the most scenic spots in Australia. Of course I am parochial. If all representatives in this House feel strongly about their electorates and are prepared to represent and fight for all people to the best of their ability, Australia will be a better place in which to live. Like all new members, I am keen to work, and as I walked across the floor to be sworn in one good natured Opposition member said: ‘He will need good luck’. I say that we all need good luck to right this economy, which is at a very low ebb at the moment.

My electorate unfortunately was divided by the loss of the Tasman Bridge on 5 January 1975. That was a fateful Sunday evening, as all honourable members realise. It resulted in the tragic loss of 13 lives and caused untold social and human problems to the people of Hobart. It is not my intention to dwell on that disaster, but I should like in my maiden speech to extend my sympathy to the families who lost their loved ones and to pay a tribute to the many people who worked so genuinely and so hard during those months in 1975. They know who they are and their devotion and service during that critical period was not always recognised. To the people of Hobart, who have overcome so resolutely the problem of inconvenience, let it be said that that was their finest hour.

Fortunately, often a great deal of good comes out of disaster, and ultimately the city of Hobart will benefit by a better road system, a continued ferry service and a second crossing. They will bring further development and a reassurance that previous traffic snarls will be minimised. An alternative bridge is also necessary to compensate for the possible loss of the bridge that is now being repaired. It plays on the minds of many of the people of Tasmania, and in particular the people of Hobart, that if the bridge should fall once again as the result of a disaster there would be a recurrence of the hardships and problems that have been encountered in the last 12 months. I firmly believe that a second bridge should be a priority, and of course I will fight for the construction of such a bridge.

Local government, which is a creature of the State and sometimes considered to be the poor lost child, played an important role during the rehabilitation period. It is the grass roots government, important to the people it represents and very aware of and sensitive to their problems. That statement is borne out by an independent survey conducted by the University of Tasmania which found that the residents of the eastern shore were reliant on and grateful to local government during this period. In fact, the local government centre in the municipality of Clarence became the blood centre of operations. Most of the people who had problems during that critical time went to the local government authority where they were consoled, assisted and helped. I think that as politicians we should once again get close to the people. We should find out their needs, search their minds and come forward with their problems and not the problems of some of the manipulators who think that they are running Australia.

This Government was elected by the people and the people are dictating the terms at the moment. They made the decision on 13 December to elect this Government. I will honour that commitment. I will work for the people not just of Tasmania but of Australia, and I am sure that all my colleagues will do just that and work for that one aim. Although many local authorities throughout Australia are shackled with financial and economic problems, I believe that if they were given the encouragement and incentives to make decisions and to assist in improving the quality of life for the people they represent they would do it admirably. Mr Whitlam and his Government were becoming aware of local government. I know that the Prime Minister (Mr Malcolm Fraser) has indicated strongly the intended involvement of the Liberal and National Country Parties in local government. Local government is most important. Many honourable members have spoken about local government today. I think they realise that from grass roots government come men and women who are prepared to right and work for people. The money that will go to local government under the Government’s new federalism plan will be in the form of an equalisation or a toppingup grant to be distributed through State grants commissions. If local government is to survive it needs real assistance and encouragement. I can assure that strata of government that I am aware of its problems and will continually promote its cause.

My colleague, the honourable member for Denison (Mr Hodgman), commented on the critical freight situation affecting Tasmania. I share his view that the Minister for Transport (Mr Nixon) is tackling the problem realistically and that eventually, with the introduction of an equalisation plan, the ability of Tasmania to trade on a comparable basis with other States should be greatly improved. Tasmanians will not allow their parliamentary representatives to sit idly by whilst the freight problems continue. I have certainly heeded their warning and I know that all the other honourable members from Tasmania have also done so. Some of my closest friends advised me to sit back and listen before making my maiden speech and, in fact, learn all the tricks of the trade. If listening to displays of bitterness, soaked in innuendo, constitute learning the trade then I want no part of it. I can assure all honourable members that my aim is to work and not become involved in some of the pettiness that I have heard in this place. The House is like a theatre. Someone who is a very good actor apparently gets on and impresses everybody in Australia. But there are many of us who are not good actors but are prepared to work genuinely for the people who sent us to Canberra.

The Labor Government endeavoured to pursue its economic policies in such a way that wellintentioned and idealistic plans for a welfare state resulted in a political and economic catastrophe. I beleve that some of the Labor policies, such as the Australian Assistance Plan, were moving in the right direction, but the election results must show conclusively that the people of Australia are now aware that schemes to ensure social justice must be coupled with sound economic management. The fallacy that all Liberals care only about the privileged sector is absolute nonsense. I can assure the Opposition that there are many members of the Liberal-National Country Party Government who know what it is like to struggle and know what it is to work hard, but who also realise that the excessive expansion of big government causes more and more areas of the private sector to fail through lack of resources- and the private sector traditionally employs by far the highest percentage of the Australian work force.

Tasmania must be able to reduce the number of unemployed. I believe that with freight assistance and sound economic planning confidence will again be instilled into the private sector, that new industries will develop and eventually the tragic brain-drain from Tasmania will be halted. Unfortunately, many very competent young people leave Tasmania because they cannot procure satisfactory jobs there. I hope, and I know that other honourable members from Tasmania hope that Tasmania once again will be able to provide sound, secure jobs for the young people, my children and their children.

Many things have been said about the importance of tourism in Tasmania. High fares and high accommodation costs have had a very damaging effect. It is my earnest desire that a solution be found and that the future will hold greater promise for this essential industry. It would do honourable members and all Australians who have not yet discovered Tasmania a lot of good to visit this beautiful island. During my election campaign I saw many residents of the Huon Valley, who are dependent on the timber industry for their livelihood. They are very sound, good people who live in the Huon because they like it. They came into direct conflict with the conservationists. It is my opinion that less vocal groups such as the residents of the rural area that I mentioned, together with conservation groups, should each be given the opportunity to declare their case when far-reaching decisions of declaring national estates are made. My point is that if both groups work in harmony one section will not need to leave its homes and will not need to look for jobs in the cities; the best of both worlds will be achieved. That is particularly so in Tasmania.

Those who have preceded me in this debate have spoken in depth about our future economic plans. I believe that with patience and perseverence on the part of the Australian people we will see a decrease in the levels of unemployment and inflation and in high interest rates. This will not happen overnight. The unnecessary rumours that persist at the moment are not making our job any easier. The facts of the last 3 years cannot be discounted. For example, the consumer price index increased by 50 per cent. The average weekly wage rose by approximately 63 per cent. The level of unemployment jumped from 2.4 per cent of the work force to 5.6 per cent of the work force. A dramatic rise of 140 per cent occurred in the number of people registered as unemployed. Expenditure by the Federal Government increased by 99 per cent. Receipts from personal income tax jumped by 105 per cent. The volume of money increased by 63 per cent.

Tasmania needs a continuing small fruit industry. Whilst the problems of freight and the employment of labour are known, the industry must be given a clear cut assurance by the Liberal-National Country Party coalition that it will have the ability to trade on an equal basis with New Zealand on the local market. Our policy should be to look after our own and not to have a repetition of the situation in which our producers were undercut on raspberries by $200 a tonne by New Zealand producers. Let us have competition, yes; but let us also have protection for our own. This industry and many other industries in Tasmania require clear cut decisions. I believe that we have the Ministers capable of making those decisions and of ensuring a return to economic prosperity and, most importantly, confidence- confidence showing that we wish to continue to employ and to produce. Statistics may indicate that the number of bankruptcies did not increase alarmingly in the last 3 years by comparison with the number of bankruptcies in the 3 years before that; but statistics do not indicate the number of people who left small farms and businesses or who worked with a minimum amount of labour in order to survive. Let me deal further with the Tasmanian fruit industry. Tasmania, often known as the ‘Apple Isle’, has been exporting high quality apples and pears for more than 90 years. Our fruit industry plays a vital role in the economy of the State, particularly in southern Tasmania where more than 1500 people are directly or indirectly dependent upon that industry for their livelihood. A former Tasmanian Premier, Honourable Angus Bethune, once said that if the apple industry and the zinc works were removed from the economy of Hobart it would collapse. Regrettably, Tasmania’s apple industry has declined disastrously in the last 10 years largely as a result of circumstances beyond the control of growers. Those circumstances include ever-increasing costs of production, exorbitant overseas freight rates, currency revaluations and indifference and inaction from Canberra. These have all taken their toll. In 1966 there were more than 1100 registered fruit growers in Tasmania. Today there are fewer than 500. One-third of our orchards have been grubbed out in the last 5 years. Scores of families were literally forced to walk off their properties, leave their districts and travel to the city to seek work. The Huon has not received a fair go from Canberra. It is one of the richest apple growing areas in the world and its orchardists are hard working and efficient. It is scandalous that year after year fruit growers have to wait almost until the opening of the fruit export season before they learn the exact details of the stabilisation scheme that will operate for the season. Growers should know the stabilisation formula no later than November of each year so that they can plan forward for next year’s season. It is completely wrong that they should be left in the dark until February or March- literally days before the first ships are due to sail for overseas’ markets.

The apple and pear industry can once again be a great export income earner, not just for Tasmania but for all Australia. It will achieve stability and become a permanent employer for thousands of Australians only if this Government decides here and now that the industry is worth saving and only if it acts promptly and effectively to protect its future. I believe, Tasmania believes and I hope that most honourable members believe, that the apple industry is worth saving. Already my Government has made courageous decisions, sometimes against my own personal judgment. For example, I must in all conscience mention the removal of the funeral benefit of $40 for pensioners. I will always endeavour to express my views as I have already on this subject. Mr Deputy Speaker, thank you.

Mr HAYDEN:
Oxley

– I compliment the honourable member for Franklin (Mr Goodluck) on the occasion of his maiden speech. I wish him well in this House. I trust his stay here is interesting and stimulating. I think I would be testing political credulity a little too much if I were to go beyond that, however.

The new Government administers the affairs of this nation with a mandate that comes from 53 per cent of the vote and which gave it nearly 72 per cent of the seats. The Labor Opposition which received 43 per cent of the vote has only 28 per cent of the seats. Let me put that in another context. It took on average to obtain one Liberal seat 48 422 votes. To obtain one National Country Party seat on average it took 36 139 votes. But to obtain one Australian Labor Party seat it took on average 92 58 1 votes. If that is not dramatically disturbing enough, let me put another aspect to this point. It took 91 per cent more votes on average to obtain one Labor seat than to obtain one Liberal seat. It took 156 per cent more votes on average to obtain one Labor Party seat than to obtain one Country Party seat.

The Labor Party should, if there was any justice in the electorate system, have somewhere near 20 seats more than it currently has in this Parliament. It is an electorate system as rigged and as rotten as the rotten borough system of the 18th century and the early 19th century in Great Britain. This is one of the reasons why an early election was forced by the misuse of the Senate, by the abuse of constitutional conventions. The National Country Party was frantic that an electoral redistribution which just might be passed by the Liberal members of the Senate- those few who might have had some sense of fairnessmight have brought some equity and justice in the distribution of electors in Australian electorates and reduced the disproportion of representation they have in relation to the votes which they are able to achieve.

There are other reasons too why an early election was forced on the Australian community. The economic measures by the last Labor Government were working. They had lessened the severity and the length of the recession compared with what had been experienced by other industrialised nations and there was clear evidence of a recovery under way. In the election campaign itself there was a willingness by the coalition Parties to dissemble before the electorate about their policy proposals and there was a complicity among the Press in Australia in a villainous conspiracy to veil the defects and the impracticability of the coalition Parties’ proposals from the attention of the public. Let us go through those last 3 points to which I referred. I mentioned the success of the economic measures which we had introduced. The evidence was that already we were starting to bring down inflation. We expected that in the December quarter inflation would rise as a result very largely of once only effects arising from increased government charges- not only Australian Government charges but also State government charges. The alternative to increasing those charges was to add further to the deficit. While that is not the most desirable of the alternatives available to resort to, it was the best which could be used.

If the measures which we had introduced were persevered with there is no reason at all why, by the end of this financial year, inflation could not have been down to 12 per cent and, by the end of this calendar year, it could have been down to 10 per cent. There is pretty clear evidence that a deviation from those measures is now under way with, I suspect, rather disastrous results for the Australian economy. But I shall come to that a little later.

We were being outstandingly successful on the industrial front. The wage increase was being reduced enormously. For instance, in the September quarter average weekly earnings had increased by 13.8 per cent on an annual basis compared with 28 per cent for the December quarter 1974. As the months roll by and as industrial conflict mounts in the face of the dishonoured promises of the Liberal-National Country Party Government we will be able to measure the relative performances and achievements of the Labor Government against what the present Government is able to achieve. Our record internationally was quite favourable. Unemployment in this country for the third quarter of the calendar year 1975, according to the Organisation for Economic Co-operation and Development, was less than 4 per cent. In Germany the percentage was closer to 5 per cent. That is an understated figure because it does not include the guest workers who are exported whenever there is a cyclical downturn in the economy which happens in so many European countries like West Germany. Unemployment in Canada was 6 per cent and in the United States of America 8 per cent.

Other indices of the performance of the economy clearly evidence that the recovery was under way. Admittedly, it was a very early stage of recovery after a particularly severe recession. But the recession in this country had been entered later than was the case with other industrialised countries. It was less severe and we were pulling out of it earlier than most of those countries. Stocks were falling. The home building industry was accelerating in its rate of activity.

I move to the next point which I mentionedthe dissembling of the Liberal and National Country Parties in the course of the election campaign. The nonsense put forward was that there could be an investment led recovery. I challenge honourable members to produce the evidence to show where there has ever been an investmentled recovery either in this country or in any industrialised country. America has tried it on more than one occasion. Great Britain tried it in the 1970s. Those efforts were complete failures. This country tried it in the 1960s and those efforts were a complete failure. All efforts to reintroduce an investment led recovery in the 1970s were doomed to failure and these efforts of the moment will be doomed to failure. How will the Government encourage any businessman to undertake investment at the present time when 23 per cent of the productive capacity of industry is unused? A businessman would have to be mad to be spending money on investment. The process of recovery is that unused productive capacity will be used before there is any investment. Overtime will be used. Unemployment will be gradually taken up before there is any significant move towards investment in the economy.

To what extent will the investment allowance go to stimulate investment in the economy when the cut-off date is 1978? Any significant investment involving planning and construction will be excluded. This is sheer nonsense. The only sort of recovery you will get in the economy, apart from an export led one- there is not much evidence that that is likely- is a consumption led recovery. The measures which the Government is taking now are moving in the direction to counter the developing consumption led recovery which we had been hoping to achieve. Of course, I refer to the dangers inherent in the proposals of the Government to slash into public expenditure.

The level of deficit- the level of public expenditureat the present time is a reflection of the degree of slack that exists in the economy. In the absence of that level of public expenditure and in the absence of that level of deficit the contraction which we are suffering would be even more severe. The Organisation for Economic Cooperation and Development in its Economic Outlook for July, talking collectively about the state of the economies of industrialised nationsbearing in mind that there is a general world recession affecting those nations now- said this:

The importance of these deficits can be exaggerated if it is not recalled that expenditures are artificially nigh and tax receipts low because of the present recession.

Public expenditure at its current level, or at at the level at which it has been until recently, has been necessary to maintain the level of activity which has occurred in the economy. The Opposition freely acknowledges that that level of activity was weak in the last half of the calendar year 1975 and will receive stimulation in the first half of the calendar year 1976, as a result of the new personal tax system and as a result of the cuts in taxation by about $400m progressively fed into consumer demand. 1 repeat that it is nonsense to talk about an investment led recovery, and that dissembling before the electorate is doomed to failure before it even starts. Let me deal with the straw man of big government of which we heard so much in the campaign. Anyone would think that the public sector in this country was one of the largest, measured as a proportion of all expenditure, of any of the countries in the industrialised nations of the world- or at the very least, one of the largest. It may come as a surprising insight to new members on the Government side, who by their interjections display a complete ignorance of the fundamental tools of trade that are used in this Parliament in economic discussions, that this country has one of the lowest public sectors of any of the industrialised nations of the world. The previous Government took it to 3 1 per cent of gross domestic product. Historically, it had settled at around 25 per cent or 26 per cent for a very long time. In the United States of Americascarcely the heart land of socialism in the west- it stands at 33 per cent. In Canada it stands at 39 per cent. In France it is about 47 per cent or 48 per cent and in Sweden it is 50 per cent. Do not tell me that Sweden is not an efficient, innovative economy in which the private sector is particularly successful and functions with a very low degree of protection competitively on world markets. It has a much more resourceful private sector than we have in this country.

Therefore I challenge honourable members opposite to explain why it is that they perceive some sort of inflexible association between Government expenditure and the problems of inflation and unemployment. If all the relevant comparative statistics available in relation to other nations are drawn together the argument does not stand. We have one of the smallest public sectors- about the smallest- in the world and we are in the same position as other countries which have much larger public sectors and we are not performing as well. Historically, we have never performed as well as Scandinavian countries which have a significantly larger public sector than we have.

Then there was a total dishonourableness on the part of the Government of committing itself to the indexation of wages in the course of the campaign and then rejecting that commitment almost within weeks of accepting office. The Government railed at increases in personal taxation, neglecting to mention that because of the new taxation system corning into operation for half of this financial year- we could not bring it in earlier than that- the rate of increase in tax collections slumped from something like 46 per cent to about 42 per cent or 43 per cent. If the scheme had been in operation for a full year the rate of increase would have been only about 35 per cent. But put that to one side. I challenge honourable members opposite, especially the Prime Minister (Mr Malcolm Fraser) and the Treasurer (Mr Lynch) to state where people are becoming better off. They are allegedly seeking to reduce the public sector by cutting public expenditure. Where are people better off? I can see no evidence that taxes have been reduced for anyone at all. In fact, to the extent that the $9m for child care centres will not be available, the people are considerably worse off. To the extent that the aged have to wait at least a month for payment of their pensions, costing the standard rate pensioner $10 and costing the married rate pensioner $16.50, is clear evidence that people are being made considerably worse off by this Government.

Sitting suspended from 6 to 8 p.m.

Mr HAYDEN:
OXLEY, QUEENSLAND · ALP

– Prior to the suspension of the sitting I was pointing out that the Government was able to dissemble before the Australian electorate in the last election campaign and through the comfortable accommodation of the Press- I distinguish here between the people who control the Press and the working journalists towards whom I direct no criticism in this respect- was never brought to account. I received what I thought could be described in polite circles as a Bronx cheer from the Government when I put that point of view. It seems appropriate, then, to quote the views of Mr Ranald Macdonald, who is President of the Australian Newspapers Council and who is also the Managing Director of David Syme and Co. Ltd, publishers of the Age. On 24 February in his own newspaper he was reported as having said, inter aha that the media deserved criticism for its performance in the recent Federal election. He went on to say: … we certainly did not have a balance of commentators throughout the various papers.

He added:

Rightly or wrongly, Mr Fraser was able to get in as Prime Minister without the sort of commitments that were required in other elections.

The Australian Broadcasting Commission’s news broadcasts of the night before pointed out that those commitments were a clear explanation of how the cost of the proposals put forward was to be met. I congratulate Mr Macdonald for making that exposition at this stage although I feel a little uneasy that he has decided that now the election is over and the Labor Government has been defeated and is safely out of the way, the time is appropriate for fair reporting. Presumably the time for fair reporting to end will be short of the next election campaign.

Another matter on which there was clear evidence of dissembling on the part of the Government that did not receive attention from the Press was how the Government is going to meet the cost of aU of its proposals on tax indexation, which is probably of the order of $2,500m in a proposed Budget outlay of $22,000m. There are certain expenditures in a Budget which cannot be reduced; they are irrevocable. For instance, there are allocations to the States, cash benefits to persons and, certainly on this occasion at least, capital expenditure which was cut back to the bone. If we summed up that amount at about $ 15,000m we would find that there would be only about $7,000m left in the Budget in relation to which cuts could take place. Accordingly if the cost of tax indexation of aU the proposals were to be met in this Budget- they have to be met in some Budget sooner or later, and it is relevant to relate it to this Budget- it would represent 43 per cent of that remainder of $7,000m.

I would like to pose a question to the Prime Minister and his Treasurer. How do they propose to meet the cost of tax indexation? It is a total cost. It has to be met. The figures have been outlined in the Mathews Committee’s report. Even phasing it in over 3 years would not in any way diminish the impact of that cost which has to be met. Who will pay for this indexation? On the evidence so far it is quite clear that those least able to pay are going to be expected to make the greatest sacrifices. They are the people I mentioned before- the aged, whose pension rises have been deferred or who are being deprived of funeral benefits, and the sick, who are going to have to pay more for their prescriptions or are going to have to pay now a fee for receiving hearing aids, which were once provided free. Working mothers have managed to maintain momentum behind economic development in this country since the early 1960s when it was discovered that, with the fall-off in immigration and the contraction in birth rates in earlier years, unless working mothers entered the workforce the economic momentum of this country would be set back.

Finally I move on to the overall economic situation at present, speaking in terms of the Government’s management of the economy and its strange and, it seems, dangerous preoccupation with the deficit. As I mentioned earlier, the deficit is a measure of the slack in economic activity. If the deficit is reduced and if the level of public expenditure is reduced, not only is overall economic activity contracted but also the private sector will be most seriously and fairly directly affected as a result. I pointed out at Question Time yesterday- the question was ignored by the Treasurer- already this calendar year as a result of cash subscriptions to Government loans and proposals announced for cuts, either effected or proposed in the Budget, a total amount of $ 1,300m is involved and for the full fiscal year $2,700m or two-thirds of the deficit.

I suggest to the Government that the time has arrived for the whistle to be blown because that money which is being invested as cash subscriptions is being invested very largely at the expense of the private sector. If the Government is to continue with this policy I am afraid that the economic contraction which will follow will be to the very serious disadvantage of the private sector. I am gravely fearful that this is the inclination of the Government because the Minister for Employment and Industrial Relations (Mr Street) said on Sunday night in the program Face the Nation that the Government was prepared to bear increased unemployment as part of its economic management to try to control inflation. This is sadly ill informed thinking. It is the sort of thinking which can set back the economic recovery which is under way and the effects which can and undoubtedly would be achieved. Some diminution of inflation would be more than offset by the dislocation caused to the private sector and the economy generally especially when measured in terms of the cost of lost production.

Mr MALCOLM FRASER:
Prime Minister · Wannon · LP

– The honourable member for Oxley (Mr Hayden) said that he was afraid. I can well understand the honourable gentleman being afraid because he is the person who has opted out from his Party not once but twice. When his Party needed him after the present Leader of the Opposition (Mr E. G. Whitlam) led the Australian Labor Party into the most disastrous defeat in the history of any political party in this country, the honourable gentleman could have had the job of Leader of the Labor Party for the asking. He was asked to take it because the Labor Party needed him. But no, he could not stand the fire. He had to get out. Now when the Labor Party needs him even more than it did on 14 December he cannot stand the heat. He will not come into the kitchen. He will not take the job, because he has not got what it takes to do what is necessary for the Labor Party and, according to his lights, for Australia. He wants to sit on the back benches and criticise but is not prepared to get into the action and do what needs to be done. Like all defeated politicians he falls into the error of blaming the Press for his own errors, but occasionally he quotes one or two newspapers which, he thinks, say something in his favour.

This is the ex-Treasurer who introduced a Budget which was to have a record deficit of $2,8O0m. But the sands of that Budget were shifting under his feet even as he spoke. When we came into power the deficit was running towards $5, 000m so fast, and was there one word of that from the honourable gentleman when he was Treasurer. Was there one suggestion that he was prepared to tell the people of Australia really what the cost of the previous administration was going to be for the taxpayers of Australia, the poor of Australia and the disadvantaged of Australia? To use a word that is much too often used by his fond Leader, he was prepared to deceive the people of Australia. I think it is clear from what I have just said that his words can be dismissed. In the last 3 years we have had a serious economic crisis that has needlessly been brought upon Australia, an economic crisis that has harmed all Australians and the weak most of all. The crisis was principally caused by a failure on the part of the former Government to plan and to act responsibly. It had an unrealistic attitude to what government can effectively achieve. To restore prosperity there must be a much more realistic appreciation of what government can and cannot do.

At the heart of Australia’s current problems is a lack of realisation about one simple basic fact, the fact that at any one time Australia’s resources are limited. This fact should be obvious. When we address ourselves to it, it is obvious. But despite this, it has been persistently and dangerously ignored. Because our resources are limited we are, or ought to be, constantly faced with choices about how those resources will be used. Those choices are often very difficult to make. It would be more comfortable for all of us if we did not have to face them. But if we ignore them, if we pretend that we do not have to choose, we do so very much at our peril. Real improvements which are not at the expense of other people and other areas are restricted by the rate of real economic growth in Australia or, for that matter, in any other country. The fact that our resources are limited presents hard choices in many areas. There is an obligation on all of us to face up to those choices and to be prepared to make them.

The need to choose how our resources will be used confronts all of us. Tonight I want to discuss 3 areas where the need to choose is pressing. These areas are in government expenditure, wages and salaries, and social security and social welfare. Firstly, I will deal with government expenditure. Because our resources are limited at any one time, we have to choose which of the many worthwhile things that need to be done we will do now and which we will leave for the future. It is crucial to understand that these choices are not just choices between different areas of government expenditure. They are also, even more importantly, choices between government spending on the one hand and spending by individuals and private enterprise on the other. The more government decides to spend on goods and services, the less real value the wage and salary earner can expect to have in his pay packet. The more politicians decide how people’s earnings are to be spent, the less discretion do people have over their own incomes and over their own futures. A responsible government must be prepared to take difficult decisions between different kinds of public expenditure. A government which values the independence and capacity of Australians to make as they wish the important decisions of their lives will not pre-empt too large a proportion of people’s incomes for government programs. That would hardly be a description of the previous Administration. In the end, of course, there is no escape from responsibility. The pressure from limited resources is ultimately inescapable, as we are now finding to our cost, and as other countries such as Great Britain are finding to their cost.

In the last 3 years there have been quite extraordinary increases in government spending. Just because Australia’s wealth is limited, this has required a massive transfer of resources from individuals and private enterprise to government. Looking over the last 3 years at the way new costly programs have been undertaken, we should remember how they have been paid for and who has paid for them. Enormous expenditures were made which were quite unrelated to the Government’s revenue. The deficit for the last 2 financial years was of the order of $7,000m. The honourable gentleman who preceded me added more than any other single person to that deficit. The new Government has inherited a deficit which the Australian people were told in August would be $2, 800m. The honourable gentleman smiles. He likes spending other people’s money. That is great fun so long as he does not have to pay for it. That is why he is sitting on the Opposition benches; he could not understand the responsibility needed of him and other members of his Party. There was a deficit $2,800m which was rising out of control towards $5, 000m by the end of the year. Since the revenue was inadequate to cover this massive expenditure, it has been financed out of inflation. The people who have paid for this expenditure are those whose real income and savings have been eroded by inflation. The burden has fallen most heavily on the productive sector of the economy, on those people who have lost their jobs and on the weaker and poorer sections of the Austrlian community. The report of the inquiry into poverty states:

Inflation favours the active and the powerful; the position of poor people deteriorates.

Many of the previous Government’s programs were introduced in the guise of helping the disadvantaged. The fact that many of these programs have been financed out of inflation makes a mockery of those pretensions. The report of the poverty inquiry stated quite plainly that inflation contributed to poverty in Australia. It said:

No country with a continuing inflation rate of over 10 per cent has been able to prevent this causing grave hardship to important groups of poor people.

And the honourable gentleman is still smiling. On Tuesday we heard an impassioned attack from the Leader of the Opposition on the program of the present Government.

Mr King:

– Where is he now?

Mr MALCOLM FRASER:

-He might be at Blue Towers. So distant is the honourable member for Werriwa from reality that he forgot the reality of his years of misrule and represented it as a progressive government full of compassion for the disadvantaged, a government which took concrete action to assist those in need. The real record of his Government is very far from that. The former Labor Government, despite its protestations, in effect sacrified its claims of concern for the disadvantaged to its dream of centralisation of power and more power to its leader.

Let us look at the most blatant factunemployment. It was an unemployment directly consequential on Labor’s disregard for the facts of life, an unemployment which harmed most of all the weak, the migrants, the poorthose sections of the Australian community which have sometimes looked upon the Australian Labor Party as their protector and which turned in their tens of thousands to us because of disillusion and dismay in December. These people were sacrificed by Labor to unemployment. The Labor Party refused to face the fact that the more government spends the less there was for private enterprise to use in creating jobs for people right around Australia. These social democrats, these so-called protectors of the weak and poor, brought the highest unemployment to Australia since the great depression. That will be the epitaph of the present Leader of the Opposition and of his numbers of Treasurers.

The Leader of the Opposition certainly cannot be criticised for allowing the facts his Government created to weigh too heavily on his mind. I do not think they are on his mind tonight. In migration the reunion program was nullified. The Labor Government abandoned its commitment to increase pensions according to average weekly earnings- a move undertaken by the honourable member who preceded me. The Leader of the Opposition’s last Treasurer deferred the pension increase by a month, and he pretends that it never happened. His last Minister for Social Security conducted an attack on voluntary welfare agencies and took away the basic support which they need to do work which is invaluable in the social security and welfare areas. In education his Government was forced by its own failure to abandon triennial funding and disrupt important research programs.

The Leader of the Opposition might well be thankful that his dismissal and overwhelming rejection by the Australian population gave him the time and the frame of mind perhaps to embroider the myth of a social democratic government brought to an untimely end. The reality is of an elitist political party which had severed its bases of support in the interest of expanding the power virtually of one man. The reality is a political party which has wilfully spent Australia into the worst inflation and the highest unemployment for decades. Excessive government spending tended to exacerbate inflation, and inflation has continued to sap the confidence of individuals and businesses in the whole community. Expectations of inflation have added a big element of uncertainty to investment decisions, and uncertainty has damped investment activity. Both the current level of activity and the long term potential for economic growth have been curtailed as a result.

Inflation and the fear of unemployment have also contributed to the reluctance of consumers to spend and that is reflected in a sharp increase in the rate of savings. Between 1971-72 and the last financial year, 1974-75, the savings ratio in Australia rose from 9.7 per cent to 17 per cent, which is a measure of the uncertainty and the fear created by the previous Administration. The indications are that individuals react to high rates of inflation by seeking higher cash balances to protect their own positions and minimise what they view as risks to their security. The very things that encourage people to save- uncertainty and fear of inflation- are the same things inhibiting business from investing. The first task is to bring inflation under control. Pre-eminently, that means asserting a responsible attitude to government spending. That means being prepared to tell people the truth- that at any one time there are limits on what government can do without damaging the capacity of other people to achieve their legitimate objectives.

The Government believes that since resources are limited the crucial choice between government and private spending should be as far as possible an explicit choice, a choice which is clearly presented to the Australian people. For that reason the Government had as a major plank in its election program the introduction of tax indexation to force governments to be honest. For that reason the Government will begin the implementation of tax indexation in the next Budget. For that reason the Government will be aiming to take as large a first step as will be possible in the economic and budgetary circumstances. The Government regards tax indexation as a major part of its program to control inflation and force governments to be honest about the cost of their spending programs.

We believe that the Australian people will appreciate that tax indexation is a far more effective way of protecting their earnings than seeking ever higher money wages which are soon eroded by higher prices which often lead to more unemployment. The Government believes that responsibility with respect to its own spending, with respect to the claims it makes on other people’s incomes, is the best way to secure responsibility in wage and salary demands. This leads me to the second area where Australians as a people have to face the consequences of limited resources- the area of wage and salary demands. The previous Government pretended that they could have higher and higher real wages and salaries at the same time as real government spending was rising rapidly. In doing this, it was failing utterly in its duties to the people of Australia. It was undertaking a cruel and deceitful fraud which inevitably led to disastrous inflation, but which the Australian people were able to perceive.

It is also being now more widely recognised that those people who have jobs cannot obtain higher and higher wages without taking money which could be used to provide jobs for those who are currently out of work. Often higher wages and salaries are being paid at the expense of jobs, at the expense of economic recovery. How much pleasure does it give the Halfpennys of this world to know they achieve higher money wages at the expense of having more people unemployed. Likewise every unjustified increase in price by a business places an added strain on the resources of wage and salary earners. If it is an unjustified increase in price it is an unjustified strain on the resources of wage and salary earners. The Government looks to business and trade unions both to act responsibly in the national interest.

In the fight against inflation we will conduct a continuing dialogue with key groups in the community. One example of this is the tripartite conference in Melbourne in January which was attended by trade union leaders, employers’ representatives and the Government. Such discussions will contribute to better policies and to more successful anti-inflationary performance. There are other examples in which the Government is actively seeking the views of a wide number of people in the community. We have also established the successful Economic Consultative Group, which consists of 17 business and union leaders and which meets with senior Ministers. It met on 6 February. This was the first of a regular series of exchanges of information and views which will lead to a better understanding of the Government bureaucracy and a better understanding in business and in trade union areas of the problems of Government.

Employers have duties imposed by law to their shareholders. Other laws, and common morality, give them obligations to their employees and to the general public. The Government expects employers to demonstrate a commitment to economic recovery in the national interest. The Government also expects a like commitment from the trade union movement.

Mr Martin:

– It might not get it.

Mr MALCOLM FRASER:

-The honourable gentleman might well be surprised. There are more responsible members in the trade union movement than can be found in the ranks of the Opposition. The trade union movement and particularly the Australian Council of Trade Unions must be concerned with jobs and productivity. The trade union movement can no longer be too much concerned with higher money wages at the expense of other legitimate concerns such as the working environment and jobs. To have an exclusive concern with money wages is to pursue monetary interest at the expense of jobs and at the expense of people who once used to work beside other trade unionists.

Lack of wage restraint will have immediate consequences- the loss of productive jobs as employers lay of staff. It has long term costs in that essential conditions for real improvement in standards of living are undermined by inflationsomething which no person in the Opposition ever seems able to understand. Increasingly, the rank and file unionist is realising that higher money wages which undermine the prerequisite for economic prosperity are neither in their interests nor in the interests of other Australians. No longer can the trade union movement argue that providing jobs is the sole responsibility of government or employers. No longer can the trade union movement regard itself as responsible only for getting more money for its members. The power of the trade union movement must involve, must demand as it does, a broader responsibility. Unless the trade union movement discharges that responsibility its support amongst its own members will inevitably be eroded. That- if anyone wants to suggest it is- is certainly not in any way a threat; it is merely a commentary on the common sense of the average Australian worker.

A concern that there are adequate jobs is a basic responsibility of the trade union leadership. A concern to reduce inflation and to protect jobs has been at the heart of decisions and actions taken by this Government since it was confirmed in office by the Australian electors. It was the basis of our submission to the Conciliation and Arbitration Commission in the national wage case. In the general strategy for economic recovery the Conciliation and Arbitration Commission has a significant role to play. That Commission is not one of the anonymous commissions that proliferated under the Labor Government, adding to the costs of government but not always to the quality of government. The Commission is a long-established, highly respected institution, one whose actions and their consequences are closely watched by all the Australian people. The Conciliation and Arbitration Act requires the Commission to take into account the impact of the Commission’s decisions on the Australian economy. In the last case before the Commission the Government took the decision to oppose the passing on of the full 6.4 per cent consumer price index increase into wages on the grounds that it would increase inflation and unemployment and not provide the consumer and investor with the confidence essential to a soundly based economic recovery.

The Commission in its wisdom did pass on the full 6.4 per cent increase into wages. How soundly based that decision was for the well being of the Australian economy, for the well being of the wage and salary earners, will soon be discernable for all to see. We can all remember the commentaries that came immediately after the decision. Representatives of businesses said that they had to rush to the Prices Justification Tribunal. Economic journalists said that the decision might provide more industrial peace but would slow the pace of economic recovery. Is there anyone who has argued that that decision was positively good for the Australian economy? We judged that the position we took was one we had to take as a responsible government. We told the Commission what we saw to be in the interests of the community as a whole. Australians will expect- and rightly expect- that all sections of the community will co-operate in securing a return to prosperity.

With this co-operation 1976 should be a year of recovery. This recovery may well be gradual, but gradual and certain recovery would be much better than too quick a recovery. We have done with violent swings in policies and with violent and irrational changes in direction. A moderate rate of growth will ensure balance and a lessening of inflation and of the false expectations which perpetuate it. This is the single most important factor in ensuring that the recovery is a lasting one. Our policy considers not only 1976 but also the year beyond and the years beyond that.

This brings me to the third area where Australians, as a people, have to face the fact of limited resources. A genuine return to prosperity requires that assistance to the disadvantaged and those in need is effectively provided. The Government’s approach to social welfare is based on the Government’s commitment to the value of each person, to each person’s right to dignity and self-respect and to his right to make his own decisions. It is based also on the Government’s recognition that there are limited resources to devote to the general welfare area and that those resources that are available must be devoted, first of all, to helping those who are disadvantaged.

The Government endorses the principle spelt out in the report of the Inquiry into Poverty, namely, that need and degree of need should be the primary test by which help given to a person, group or community should be determined. Failure to observe this principle must mean the diversion of resources to people who cannot be said to need them, at the expense of other people and programs from which the resources have, in fact, been taken. The report of the Inquiry into Poverty conducted by Professor Henderson drew attention to the fact that very large sums are being spent by governments on the pretext that they are helping poor people when, in fact, the great bulk of the money goes to the middle class and poor people get little. What greater criticism; what greater condemnation of 3 years of Labor Government than those words of Professor Henderson.

Such a diversion of resources can be positively damaging to those in real need, while having substantial hidden costs in terms of opportunities that are forgone and lost in other areas- for example, the unemployment that is created. It may be possible to improve substantially assistance to those in need while reducing the overall burden of some programs. Government examinations are directed to that end. Our aims go much further than the achievement of material prosperity in Australia. We want to see government assume a role in this society that is consistent with the development of personal freedom and individual initiative- something which the former Administration did so much to destroy and stifle at every level. His Excellency, the Governor-General, in his Speech, said that we aim to develop a role for government which places more reliance on the common sense and reason of the Australian people.

We do not believe that the Australian people want a government that takes over from them their responsibility for decisions concerning the manner in which they live. The former Administration believed that it had the right to determine people’s lives for them. It believed that it had the right to tell not only the States and local government but people in every corner of this land what they must do. The former Administration believed that the dollars it spent were wisely spent but that the dollars spent by individuals, judged in their own interests, were unwisely and indeed wrongly spent. What an elitist philosophy that is. What an odd philosophy it is. It is a philosophy that does not value the average person at all, but one that takes so much power and assumes so much to itself. How can any person or any small group of 27 men believe that they have that divine right to determine the fate of every person in this country? That was the assumption underlying the previous Government’s philosophy. The former Treasurer, the honourable member for Oxley (Mr Hayden), apparently cannot stand the heat; he looks as though he is leaving the chamber. Will he be prepared to stand for the leadership when the Leader of the Opposition resigns, or will he run from the Party and the Parliament?

We do not believe that the Australian people want a government that takes over from them their responsibility for decisions concerning the manner in which they live. We do not believe that they wish to forfeit their individualism to an all-pervading, paternalistic government. The long term objective of this Government is to encourage the development of an Australia in which people are free and encouraged to achieve goals in life which they set for themselves. It would be an Australia that tolerates different lifestyles and the pursuit of an individual’s and a family’s own happiness. It would be an Australia in which governments recognise that they cannot presume to live other people’s lives for them, that recognising the dignity of people means valuing the independence of people to take the important decisions of their lives for themselves. It would be an Australia where there is a genuine concern to assist those in real need, those who are disadvantaged; an Australia where effective action is taken to assist the disadvantaged. It would be an Australia in which powerful interests- both business and trade union- recognise their responsibilities to the individuals they serve and to the wider Australian community. It is our unqualified policy to restore government in Australia to a role consistent with freedom, with true democracy and as one which values each person in Australian society.

Mr JACOBI:
Hawker

-Mr Speaker, I extend to you and the Chairman of Committees, the honourable member for Lyne (Mr Lucock) my congratulations on your election. I assure you both of my fullest co-operation. One notes in the opening remarks of the Governor-General’s Address the reference to the recent suffering and hardship that was inflicted on many people in this country because of the devastation caused by natural disasters. Might I say that what the people need is not sympathy but a natural disaster insurance scheme. It is my intention to press this Government, as I pressed my own Government, for an early and a speedy implementation of such a scheme.

Honourable members have advanced a variety of reasons in this debate for the murky waters of the Establishment which inundated Yarralumla and which led to the coup d’etat on 1 1 November. But I say to the Prime Minister (Mr Malcolm Fraser) that there has never been a greater swindle sheet perpetrated on this country than was perpetrated by the Liberal and National Country Parties during the last election. We on this side of the House ought to face the simple fact that a progressive and a reforming government is a tolerable political entity if it is confined to State Treasury benches. But it becomes a disaster to the Establishment when it is installed on the Federal Treasury benches and attempts to control or direct, or redirect, those financial forces which are the real manipulators of our real wealth. As I understand it, national legislation covers the whole of the national canvas; State legislation covers merely a fragment of it. In effect, at a national level there are no holes in the net.

I believe that we as a government were tolerable. We were acceptable; indeed we were digestible as long as we were prepared to institute reforms- reforms which honourable members opposite and their puppets failed to do anything about after a quarter of a century of government. Now what were the reforms? We were acceptable as long as we instituted reforms in education, Medibank, pensions, legal aid, divorce law and a host of other areas. These reforms were overwhelmingly endorsed by the people, and in my humble view they constituted the petty cash sector of the national economy. But the moment that we as a government attempted to control, to direct, those corporations and forces which move and in fact machinate large volumes of money across this nation, the moment we set in train legislation to control and direct the decisive sectors of the economy, such as fringe banking areas, a different attitude emerges. We attempted to inject for the first time, real competition in all levels of the insurance industry at and on a national level. We attempted for the first time since Federation to institute legislation to prevent monopolistic, collusive and restrictive trade practices and, above all, we wanted to initiate a national companies Act.

Mr Martyr:

– You failed.

Mr JACOBI:

-Yes, we did. Then we attempted to inject for the first time- it was long overdue- some semblance of credibility into the stock exchanges and the securities industry of this nation. The moment we attempted, on behalf of the people of this country, to legislate to control their right to exploit and obtain a guaranteed maximum return from the people’s assetour valuable and non-renewable resources, to put it simply- and the moment we attempted to calculate, to control and to redistribute the contents of the national cash register, which necessitated obviously getting control of the combination to the bank vault, the establishment decided we were no longer tolerable or acceptable, we were indigestible and we had to be got rid of. The Opposition of the time peddled the catch cry of ‘We had to do it’. The constitutional crisis led to its achievement of government.

One of the real criticisms I have of my Government is that we never sorted out our priorities. I would have reversed them. I think any government that fails to establish its economic base in its first years of office is doomed to disaster in the end. We failed to do that. But I firmly believe that one of the basic reasons for our dismissal was that large corporation and large financial institutions, whether national or international, sought our oblivion to pave the way for the plundering of our vast natural resources- the people’s wealth. This nation will learn in a very short period that there is a correlation between energy and the standard of living and that the diminution of one is the diminution of the other.

Mr Lloyd:

– Who wrote that?

Mr JACOBI:

– I write my own speeches. Let us look at the scenario. This is what is up for grabs and this is what was at stake on 13 December: Whether we like it or not the energy market will remain a sellers’ market for the next 10 years. Hydrocarbons, whether they be oil or gas, will increase in importance both economically and politically. The demand for liquefied natural gas, with which this country seems to be extremely well endowed, will increase at least 10 times in the next 10 years’.* The demand from Japan for this resource alone-will increase by approximately 800 per cent:- The regrettable fact is that neither natural gas’ nor oil is conveniently located in the Western world. The Western world consumes 70 per cent of all natural gas but holds only 32 per cent of the known reserves. The bulk is in Russia, Iran, and the United States and the remainder is in Algeria.

Let us consider what the demand will be by 1985. The demand for the primary energy of gas will reach 3?. per cent in the United States, 3 1 per cent in Western. Europe and 9 per cent in Japan. Yet the supply factor will fall short of demand in 1985 by almost 17 per cent in the United States, 20 per cent in Western Europe and 38 per cent in Japan. By 1.980’ Japan will require about 5 billion cubic feet a’ day. It will be able to import only about 3 billion cubic feet. If this Government grants to the Consortium on the North West Shelf a licence, to export liquefied natural gas we will be involved: in contracts for shipping overseas approximately 700 million cubic feet a day, for a period of - about 20 years. If we put on them a price of only $1 or $2.75 per thousand cubic feet the profit rake-off is in the area of billions of dollars, not millions of dollars. The present value of coking, coal in Australia is worth in excess of $300,000m. The exploitation of uranium, that crucial energy resource, is one issue which starkly reveals the total bankruptcy of this Government to grasp its national responsibilities. Its policy, in simple but blunt terms, is to tear up the rule book and let private enterprise re-write the rules. The deplorable result will be that the board of selectors will be predominantly overseas.

Just how valuable are these uranium resources? I want to quote from Sir Philip Baxter. He was appointed by a government formed by the parties opposite. I think his assessment of the figures is extremely conservative. His estimate of current reserves was 300 000 tons. Based on the likely price over the next decade he estimated that our reserves were worth $ 1 8,000m. The cost of extraction would be around $6,000m. The rake-off would be $ 12,000m. If we follow the process to the stage of enrichment the value would be about $50,000m. I think Baxter put it far more cogently than I could.

Mr Kelly:

– Even more.

Mr JACOBI:

– I think so. This is what he said:

In many countries uranium may be only owned by government

All countries except this one. He continued:

In 19S3 Mr Menzies, in passing the Atomic Energy Act, took possession for the Crown of uranium in Australia. The deposits, whose descriptions sent ripples through the Stock Exchanges, do not belong to mining companies but to the people of Australia.

What assessment can one place on this Government’s policies on this crucial issue of resource distribution and scarcity? It is not unlike its policy on inflation and unemployment. If any sacrifices are to be made in either of those areas it will not be the rich who will make them. I regret to say that over the next three years so far as the resource sector is concerned it will be a case of the rich getting richer and the poor getting poorer.

In my humble view that is what was at stake on 13 December. That is what was up for grabs on 13 December. While the people of this country had their eyes riveted on petty cash the large corporations, whether national or international, had a clear understanding of what was involved. Regrettably, when a Government abdicates its responsibility in the resource area and fails to face up to its responsibilities, it is not only a natural disaster but a national disaster.

Over the last few months the newspapers of this country have taken the opportunity to criticise any Labor member who has questioned the events which led up to the last election. I do not intend to canvass the activities of the GovernorGeneral but I want to say in all sincerity that somebody somewhere along the line, whether on this side of the House or on the Government side, will have to face up to their constitutional responsibilities. I would never concede to an upper House the right to reject a money Bill. I think that sooner or later it will have to be realised that this nation can no longer face a repetition of the events of 1 1 November. I believe that section 57 of the Constitution ought to be amended and I think the people opposite ought to initiate that process.

Mr Hodges:

– Have a referendum.

Mr JACOBI:

– I quite agree. I think that so far as supply is concerned section 57 ought to be restricted to a limitation of 28 days. I want to make some remarks about the role of the Press leading up to 13 December. If ever there was a time when the truth and some semblance of honesty were stifled by the Press it certainly was in the period preceding polling day. I think that a definition of the power and the influence of the Press was very cogently put by Lord Beaverbrook back in the 1930s. At a Press club he was asked for his assessment of the power and influence of the Press. He said: ‘It is quite simple of definition. Give me a sack of potatoes, the power of the Press and I will make it a Prime Minister in a month’. What I find rather astonishing is that we as a government were charged with going -

Mr Connor:

- Mr Speaker, could some decorum be restored to this place? Some of these new young members who are wet behind the ears should be told that they are attending the supreme Parliament of Australia and that they should behave themselves. It is disgraceful.

Mr SPEAKER:

– Order! I call the honourable member for Hawker.

Mr JACOBI:

– I find it rather odd that we, as a government, ought to be decried, particularly by a private enterprise institution which is represented by the honourable gentlemen opposite, for injecting some form of competition in certain areas. We wanted to close some valuable tax loopholes and limit foreign investment. We were discriminated against because we chose to prevent mining in parks and reserves and because we wanted to preserve inner suburbs from mindless government development and make business justify price increases. This was compounded by the fact that we were charged with wasting people’s money on health, children’s education, Aborigines, the aged, the elderly and the sick. Honourable members opposite believed that that money ought to have been allocated to provide incentives, bounties and handouts to large corporations. It was hardly surprising to me, at any rate, that just 4 days after the election was held companies like the Broken Hill Pty Co. Ltd, Conzinc Riotinto of Australia Ltd, Mount Isa Mines Ltd and the Colonial Sugar Refining Co. Ltd came out and said that economic recovery was dependent on developments overseas. In addition, it is little wonder then that the Labor Government had to go into oblivion before it could change the electoral system. Australia was perilously close to becoming a true democracy where governments are chosen by the majority of the people and not elected on boundaries or appointed by governors-general.

I shall conclude with these few remarks: Quite a number of interests in this country have to get their payola or their payback. This money will end up going to nursing home boards and the Press institutions. But I point out to the Minister for Immigration and Ethnic Affairs (Mr MacKellar) who is sitting at the table- I understand that he is in the inner Cabinet- that if ever there were an institution in Australia today to which honourable members opposite owe a debt of gratitude, it is the insurance industry. I have it on very reliable authority that in this year’s Budget the insurance companies will receive their payola. I believe that there will be an amendment to section 82(H) of the Income Tax Assesment Act.

Mr Giles:

– Hear, hear!

Mr JACOBI:

– The honourable member says ‘Hear, hear! ‘. I am pleased to note that that is to be the Government’s policy. So I assume that the insurance companies will receive their handout in this year’s Budget. The other thing that concerns me is that I have no doubt that during this Parliament pressure groups in this country like the law firms, will receive their payback. The legal aid legislation, if it is not abolished, will be truncated and, likewise, banks and financial institutions will receive their payback.

I conclude as I started: The sacrifices that need to be made in this country in an attempt to overcome the problems of inflation and unemployment certainly will not be made by the rich. Is it at all surprising then that the events of 11 November last occurred and that the Press should wish to conceal its bias and its wilful neglect in keeping Australians informed of the true nature of the political events in this country? During the next 3 years the people will certainly learn. More than at any time, I believe, since Federation Australia needs to re-examine and learn the lessons of the constitutional crisis of 1975 and to make sure that that dark day- 11 November- is never repeated in this country.

Mr DEPUTY SPEAKER (Mr Lucock)Before I call the honourable member for Capricornia, I remind the House that this is the honourable member’s maiden speech.

Mr CARIGE:
Capricornia

-Mr Deputy Speaker, I congratulate you on your election to that office. Through you, I congratulate Mr Speaker on his election to the office of Speaker of the Thirtieth Parliament of the Commonwealth of Australia. While I am congratulating people, I congratulate also the honourable member for Grayndler ( Mr Antony Whitlam ) on his election to this Parliament. I feel I should congratulate him twice because, like myself, he joined this Parliament under the astute leadership of Prime Minister Fraser and Deputy Prime Minister Anthony. He further exhibited his good sense by returning to this nation even when the dogs were barking that the Australian Labor Party would be defeated. So I feel that congratulations to the honourable gentleman are truly in order. I can assure the honourable member for Melbourne (Mr Innes) that I was not bora with blue blood, nor do I feel that I was born with a destiny and the right to rule. I am standing here because of the manner in which his colleagues totally mismanaged the economy of our great nation and because of the lack of real concern exhibited by his colleagues for the average people of Australia, not to mention their new found friends of a particular political colour. That is the reason I am here and the reason Labor’s numbers are further depleted by one.

Tonight I listened to the honourable member for Oxley (Mr Hayden). He almost broke my heart. I was beginning to think I belonged to the wrong Party. Then I suddenly remembered that Santa Claus has been and gone and I realised I am in the right Party. I ask the honourable member. Who created the depression of which he spoke at great length? Surely he could not blame our side for it. If I understood the honourable member’s speech correctly, he does not like the National Country Party. The people of my electorate would not forgive me if I did not utter some words of condemnation about the previous Government. I do so particularly on behalf of the primary producers and the free enterprise people of Capricornia. I do so, firstly, on behalf of the beef producers. At a time when most of them could see a future for themselves after the crippling droughts which plagued our area for many years we saw the total disregard of that industry by the then Government. That is another reason members of the ALP are now sitting on the Opposition benches. This is a fact of which all of us are very much aware. I speak also on behalf of the free enterprise people who were forced into near bankruptcy because the previous Government wanted to foster its own socialistic aims and ideals.

I turn now to my electorate. The first point I make is that if we use the Tropic of Capricorn as a line across Australia, we have only 3 Federal members representing electorates wholly within that area. We have also 4 members whose electorates take in part of that area- their electorates extend above and below the Tropic of Capricorn. So that gives this particular area a representation of 3 full-time representatives and 4 part-time representatives for an area which represents 39 per cent of the total land mass of Australia.

I say this because it would appear that few people in this House know exactly where Capricornia is. It is situated in central Queensland and Rockhampton is the principal city. This city was known as the beef capital of Australia but through the deeds of the previous Government we almost did not have a beef capital anywhere in Australia. But fortunately there is now a very promising prospect for the beef industry and once again Rockhampton will take on its rightful role. I impress upon honourable members not to think for one moment that Rockhampton is totally a rural city because it is not. It is a city of great diversification. It is the financial hub of central Queensland and, to a large degree, the commercial centre for central Queensland.

Slightly to the south we have the Gladstone region, which is the major industrial centre of Capricornia. Whilst I am speaking about Gladstone I should like to express my sincere condolences to the family of the late Marty Hanson, MLA, who passed away last weekend. For the past 12 years Mr Hanson has represented the State seat of Port Curtis which is wholly within the Division of Capricornia. I might add that Mr Hanson was a true central Queenslander and his death is a great loss to our area.

At Gladstone we have the large Queensland Alumina Ltd complex which treats alumina from Weipa. Weipa is located in the Leichhardt electorate. Also we have a new super-power house which, when completed, will supply power for all of central Queensland and connect into the grid system running from northern New South Wales to the Townsville-Cairns region. The main feature of Gladstone is its magnificent harbour which is one of the best, if not the best, in Australia. I am speaking now of natural harbours and not artificial ones. The largest percentage of exports from Queensland pass through the Gladstone harbour and I hope sincerely that in the very near future we will hear the commencement date announced for the Comalco Limited smelter, which surely will be sited at Gladstone. We trust also that during the life of this Parliament a decision will be made in regard to the siting of the proposed steel works. There is no doubt that the steel works will come to Queensland and that they will come to somewhere along the Queensland central coast. With Gladstone’s harbour and power facilities, I would imagine that it would be the ideal site.

At the southern end of my electorate, which is the Gin Gin-Gurrburrum area, we have an enormous problem. This area is well known as a sugar cane growing region. The problem there is the non-completion of the Bundaberg irrigation scheme. The dam, the ditches, the drains, etc., all have cost the Australian taxpayer well in excess of $17m. It would be a shame indeed if this scheme were not completed in the very near future. The producers of the Bundaberg area have had 3 very good seasons but as sure as night follows day they will experience a crippling drought. The only way in which we can stabilise this area is by the completion of this irrigation scheme.

Slightly to the north-west of Bundaberg we have the thriving township of Biloela, which is well known for its grazing, wheat and coal. Probably coal now is playing the most important role in the development of this area. Biloela also is the main centre for the Banana Shire, which is well recognised in Queensland as being one of the most efficient. But unfortunately the shire is plagued by lack of funds for its road system.

Situated between Biloela and Rockhampton is the township of Mount Morgan which has a population in excess of 4000 people. The economy of Mount Morgan has relied mainly on Mount Morgan Ltd which has now announced that the mine will close at the end of 1976. Mount Morgan has been a very stable community for almost 100 years. It has probably one of the best climates in central Queensland. It could well become the Toowoomba of central Queensland. This area requires financial assistance from one government source or another and it requires that assistance in the very near future. I well realise that the first moves must be initiated by the State Government but I would ask that this Parliament be sympathetic to the plight of the people of this area. As a result of the closure of the Mount Morgan mine some 700 families will be adversely affected, not to mention the hardship that will be felt in the smaller towns such as Bajool and Ambrose. The workforce of these towns relies on supplying raw materials to Mount Morgan Ltd.

Unemployment is already a major problem in my area. As of 4 o’clock this afternoon there are 2978 persons currently out of work in Capricornia. The closure of Mount Morgan Ltd will further aggravate this problem. I might add that Mount Morgan injects almost $lm a week into the economy of central Queensland. Therefore the closure of Mount Morgan Ltd will adversely affect the whole region.

My electorate depends on the tourist industry for a significant part of its economy. I must stress that the tourist industry will decline if our roads are not upgraded to a standard which would allow people to travel for 52 weeks of the year and not approximately 47 weeks of the year as is the case at the moment.

I would like to expand on a few more of the problems which exist in my electorate. The first concerns telecommunications. Who would believe that in the year 1976 it could and does cost over $5,000 to have a telephone connected in some of the areas within Capricornia? In many areas the exchanges operate only between the hours of 8 a.m. and 8 p.m. So the people of my electorate are further penalised because they lose the advantage of any discount rate which might operate. I urge the Minister for Post and Telecommunications (Mr Eric Robinson) to consider reintroducing the hours which applied prior to the Australian Labor Party gaining the government benches. Many of our children are still being taught by the excellent Queensland Correspondence School and by the School of the Air. This, gentlemen, is all happening in 1976. So I agree wholeheartedly with my colleague the honourable member for Leidhhardt (Mr Thomson) when he says that remoteness is a massive problem in all our areas of the north.

Prior to taking my place in this House I felt that the Labor Party would be totally united. The only unanimity I can see or hear now is the fact that they would like a new leader. I wonder whether they will find this leader within their ranks in this House or whether he will come from some other place? I can honestly say that I have not heard one new word uttered from the Opposition benches since Parliament resumed. We heard it all during the 1975 election campaign. Opposition members have now introduced the 1975 campaign into the Thirtieth Parliament. They continue to expand their views on democracy. I wonder whether they would like Australia to have the sort of democracy which operates in Iraq. Members of the Opposition can rest assured that we on this side of the House trust the written Constitution and have explicit faith in the Governor-General. They may also rest assured that the people of Australia will not forget their deeds of 17 February.

Another point that disturbs me is that the pensioners of Australia are paid on a flat rate Australia-wide. No allowance whatsoever is made for the different areas in which they reside. The pensioners of the Northern Territory and northern Western Australia receive exactly the same amount of money and the same privileges as the pensioners who reside in Sydney and Melbourne. I thank honourable gentlemen for allowing me the privilege of making my speech in silence, and I thank you, Mr Deputy Speaker.

Mr WALLIS:
Grey

-Firstly, I should like to offer my congratulations to you, Mr Deputy Speaker, on being elected to the high office which you hold. I should also like you to convey my congratulations to Mr Speaker, although I feel that he looked better sitting on this side of the House without a wig. Much has been said about the constitutional crisis and, whilst I do not intend to spend much time on it, I certainly endorse what has been said by my colleagues about what happened in Australia on 1 1 November. It was a black day for Australia. We used to refer to 1 1 November as Remembrance Day for another reason, but from now on we will call it Remembrance Day for political reasons. That was the day on which . Australian democracy took a step backwards.

Quite a few derogatory remarks have been made about the Labor Government and about members of the Labor Party. I have been a member of this House since 1969 and I have been proud to be a member of the Labor Party. I have always felt that although the Labor Party does take its share of knocks, it cannot be knocked over completely. It always bounces back, unlike the Liberal Party. Going back to the time of Federation, the conservatives of this country have had 6 or 7 different names. They formed up; they collapsed; they called themselves by a different name; they re-formed and again came back. But throughout its history the Labor Party has retained the same name- the Australian Labor Party. It is a solid block, and whilst the corners can be knocked off the block itself cannot be knocked about. I do not think that any government has faced greater frustrations than those faced by the Whitlam Labor Government after it was elected in 1972. Right from the word go it had a hostile Senate. In the early part of the Whitlam Government’s reign it was able to get some legislation through, but then the stunned Opposition suddenly came to life and realised that it had a majority in the Senate. It started to block legislation and kept on blocking and frustrating the Government so that during its 3 years of office the Labor Government was not allowed fully to carry out its program until after the double dissolution in 1974.

Despite those obstructions, the Labor Government was able to make some quite large gains. The attitude of the Opposition in the Senate, and I think in this House also, seemed to be that because the Labor Party had a victory in 1972 something up in the heavens had gone wrong and the Liberal Party’s right to rule suddenly had been upset. The Opposition just could not understand it. Despite the frustrations brought about by the Senate Opposition, the Labor Government was able to place quite a few pieces of very progressive legislation on the statute book. Certain members of the Opposition believed they had the right to rule and felt that something was wrong because they were sitting on the Opposition benches. In 1974 the Country Party goaded the then Leader of the Opposition, the present Speaker, into threatening to reject

Supply in the Senate. In the event it provoked a double dissolution in 1974 from which Labor emerged victorious although with a slightly reduced but workable majority and was able to carry on its program. Rejected Bills which had been the grounds for the double dissolution were then put to a Joint Sitting of the Parliament and were passed into law.

One of these Bills was the legislation setting up Medibank, a concept that had been hotly opposed by the former Opposition in this House and in the Senate. After the 1974 election the Liberal and National Country parties thought they could still prevent the introduction of Medibank because legislation had not been passed to provide for the financing of Medibank. Of course, Labor’s original proposal was that it should be financed by a levy on income. Because no legislation had been passed for the funding of Medibank the then Opposition thought it had successfully frustrated the Government and that it could not introduce Medibank. But the Government soon proved it wrong. The Government introduced Medibank and decided to pay for it out of Consolidated Revenue so that the people of Australia would no longer be denied this advance in medical care. We now know that since the election on 13 December the Liberal and National Country parties have been considering introducing a taxation levy to pay for Medibank.

Let me trace the events of history a little further. In early 1975 Senator Murphy of the Australian Labor Party was elevated to the bench of the High Court of Australia. Under normal procedures he would have been replaced by a Labor nominee from his State.

Mr Donald Cameron:
GRIFFITH, QUEENSLAND · LP

– Tell us what you did with Senator Gair.

Mr WALLIS:

– Because it did not suit the Premier of New South Wales Senator Murphy was replaced with a non Labor person. To that person’s credit, when the Budget crisis developed last year he did the right thing. Perhaps the honourable member for Griffith (Mr Donald Cameron) would care to interject about the replacement of Senator Bert Milliner, one of the most respected members of this Parliament, a man respected by people on all sides of politics. When he died in July last year the Premier of Queensland appointed to the Senate in his place a non Labor person. Obviously, he was a stooge. In fact the appointed Senator said that his only object in coming into the Parliament was to vote against the Australian Labor Party. So on 2 occasions conventions were completely thrown aside and from that time on Australian politics took a different course. Conventions that had been respected by both sides of the House for many years were suddenly thrown overboard. If in future a Liberal senator from a State with a Labor Government is to be replaced we cannot now expect his replacement to be a Liberal nominee. Despite the fact that the Labor Party would like to see adherence to conventions, I think if the rules of the game are to be changed we can play by the new rules.

The Budget introduced by Treasurer Hayden last year was a good Budget. It has been shown to date that it would have put Australia back on the road to recovery. Members of the former Opposition realised that as time went on that Budget would start to take effect and that the economic picture would start to brighten. They realised then that they had to move. That is when they decided to defer the Budget. They did not have the guts to reject it; they just deferred it, thus precipitating a crisis. I repeat that they did not have the guts to reject the Budget. I come back to the constitutional crisis that erupted following deferral of the Budget. Let me make this final point on that aspect: I mentioned before that November 1 1 is Remembrance Day. From now on political scientists and keen students of political history will confer two meanings on Remembrance Day, Firstly, it will be the day when the fallen of two world wars will be remembered; secondly, it will be remembered as the day when part of Australian democracy died.

We saw a Government that was twice elected to office ejected from office by the actions of the Governor-General. I do not intend to say any more on this subject. What has been said up to date clearly covers the points that should be made. Various people have said that members of the Labor Party acted badly in boycotting the opening of the Parliament and in other actions. I think that any fair minded person who had a look at how the Labor Party was treated following its election to office in 1972 must agree that members of the Labor Party had every right to feel that they had been treated unjustly and that the umpire had certainly not been fair.

Unfortunately the then Opposition Parties were able to force the Labor Party to the people and, by means of a vicious Press propaganda campaign, were able to see the Labor Party defeated. But that election defeat was not the complete wipeout that one would be led to believe by what some people on the other side of the House have said. Let me tell honourable member this: I have quite a few Labor Party sub-branches in my electorate. Because of what happened in the course of that election campaign, the membership of those sub-branches has doubled; they are much more solid and are working much harder. So, do not let anybody think that the Labor Party has been slaughtered, because it has not been. As 1 have said before, the Labor Party is like a block: The corners can be knocked off but the block remains. There was no resounding defeat. Let us look at the vote the Labor Party attracted. It got 42.8 per cent of votes cast but has only 36 seats in this House. I compare that with the position of the National Country Party which, with less than 10 per cent of the votes cast, has 23 seats in this House. Is there any fairness in a system which produces that result? The Liberal Party received a total vote I per cent less than the vote that the Labor Party received. But what is its representation here? The Liberal Party has 68 seats in this House. I repeat those figures: The Labor Party with 42.8 per cent of the vote holds 36 seats in this House; the Liberal Party with approximately 42 per cent of the vote has 68 seats in this House.

In the time that I have been a member of this House there have been some great defenders of Parliament. These are the people who try to portray themselves as the great respecters of parliamentary democracy and democratic institutions. After what has happened in the last few months I am afraid that the claims of those great defenders of the parliamentary institution have been found to be wanting. That fact is certainly indicated by the results obtained by the various parties. Those results demonstrate that a great need exists for electoral reform in this country. The Labor Party tried to introduce electoral reform. Bills were brought before this House and passed, but they were rejected by the Senate. Every political scientist in Australia agreed that the proposals that were placed before this House for electoral reform were the fairest electoral redistribution proposals ever presented in Australia. But our proposals did not suit those people who were then in Opposition. I am amazed that the Liberal Party took the attitude that it did on those proposals as the Liberal Party stood to lose more by a gerrymander of electorates in favour of the National Country Party than we did. If those electoral redistribution proposals had been passed the Labor Party possibly would not have gained any more seats than it holds; it would possibly have lost a few more seats. My own seat would have been in jeopardy. The point is that the Opposition Parties refused to pass that legislation. Once again the National Country Party tail wagged the Liberal Party dog. But, sooner or later, electoral reform must be passed to ensure that parliamentary democracy does reign in Australia.

I said that I was very proud to be involved in the 3 years of Labor Government. I have very good reasons for saying that. While the Labor Party was in office, Australia, in common with every other comparable nation in the world, faced the economic problems of inflation and unemployment. We do not say that we had all the answers, but at least we were trying to do something about those problems. The record of what we did is as good as that of any other country in the Western world.

Although we heard some very nice words from the Prime Minister (Mr Malcolm Fraser) tonight, I thought his speech was typically Liberal: The words were very fine but the actions will never fit those words. There are examples in my own electorate of advantages that the people of Australia were able to gain in those 3 years of Labor Government. Last Saturday I had the privilege of attending the opening of a community health centre in a town in my electorate. This is only one of many areas in which many great improvements were made during those 3 years of Labor Government. One of the first actions of the Labor Government on coming to office- and this possibly helped more Country Party candidates than other candidates in the election was the introduction of the isolated children’s scholarship. I am sure that the honourable member for Maranoa (Mr Corbett) would agree, because I know he was vitally interested in this area, that until 1972 the Liberal-Country Party Government had done nothing whatsoever to give assistance to people living in isolated areas throughout Australia to ensure that their children had a decent opportunity to get a reasonable education. One of the first acts of the then Labor Minister for Education, Mr Kim Beazley, was to introduce the isolated children’s scholarship.

I have seen educational facilities upgraded in many areas throughout my electorate which in the past have been very neglected. About three or four years ago I made a tour of my electorate and I made it my business to attend every school in the electorate, including the outback areas. There was not one school which you could say came up to standard. I am pleased to say that thanks to the Australian Labor Party Government which provided additional facilities many of those schools have been upgraded and their facilities greatly improved. In the larger towns assistance was given to the many kindergartens that were set up and which now operate in these areas. These kindergartens are all running into financial problems, but I am pleased to say that following the establishment of the Children’s Commission and the setting up of the various coordinating committees that work in conjunction with the State authorities, we were able to channel Federal money to these areas, and I am sure that the people in these areas are very grateful for what the Australian Labor Party did in its 3 years in office. In quite a number of areas in my electorate child care centres are being established. I know that up to date none of them is actually operating, but promises have been made to establish them. In some cases tenders have been called for and I certainly hope that the Government, in carrying out its proposed expenditure cuts, does not cancel any of these projects that have been promised. There have been many other improvements.

Possibly one area that has gained most out of the Labor Government administration has been that of local government. I heard in debate here today much about how the Labor Government was trying to take over the functions of local government authorities. There are 15 local government bodies in my electorate. I very much doubt whether any of the councillors on those bodies would agree with the sentiments that were expressed here today about their fear of what the former Federal Government was doing. I know what their approaches to me have been. They have been very grateful for the great assistance that has been given. For argument’s sake referring to the question of Grants Commission allocations, there are 1 5 local councils in all in my electorate. Two years ago they received $750,000 and last year an amount of $980,000, a total of $1,730,000. 1 know from my discussions with many councillors that they are very concerned as to what the future holds. They know that what they got from the Labor Government was tangible. Now they know that there are new proposals being put forward and they know’ of this talk about money from general income tax and so forth, and I am afraid they are very worried. There are some very vague proposals, not proposals that will be based on the needs of the various councils. They know that in the past they were able to get an allocation of money when they could put up a case. I can assure the House that these local government councils are concerned as to what the future holds for them.

I have heard much in this debate about honourable members representing large electorates, some of which are beautiful, some of which are north of the Tropic of Capricorn, and so on. Well, I happen to represent a large electorate too, and of course in any large electorate the problem of transport is of prime concern. I am pleased to say that during the 3 years in which Labor was in office we were aware of the question as to when the Eyre Highway was going to be finished and the problem of when people were going to be able to drive from Adelaide to Perth on a bitumen road. I know the answer that I received from previous Ministers for Transport. They told me: ‘All that is South Australia’s worry. That is its financial responsibility’. Last year the Labor Government brought in the national roads program. Because of that we can expect to be able to drive from Adelaide to Perth on a bitumen road well before Christmas next year.

We saw the commencement of the TarcoolaAlice Springs railway. I know that this has been talked about for years; but now the project is well on the way. It was opened last April. I had the pleasure, with the then Prime Minister, of attending that function. I noticed that no Liberal Party members were there. Certainly, the honourable member for Northern Territory (Mr Calder) was there, because that railway line is of great concern to his electorate. I wondered whether the function was being boycotted by Liberal Party members. I thought that at least that would ensure the success of the project because the last project the Liberal Party boycotted was the Snowy Mountains scheme. I do not think that anybody would dare to say that that scheme, which was started by the Chifley Labor Government back in 1949 and boycotted by the Liberal Party, was not a success. Under the national roads program other projects in my area should commence shortly. I hope so, anyway. There is a new Minister for Transport (Mr Nixon). I certainly hope that he pushes on with the programs laid down by the previous Administration. The Stuart Highway through the Northern Territory is of great benefit to our friend, the honourable member for the Northern Territory.

Mr DEPUTY SPEAKER (Mr Lucock)Order! The honourable member’s time has expired. Before I call the honourable member for Holt I remind the House that this is his maiden speech. I anticipate that the usual courtesies will be extended to the honourable member. I call the honourable member for Holt.

Mr YATES:
Holt

– I now rise and ask for the indulgence of this honourable House and for the courtesies it extends to new members desirous of making a maiden speech. I first thank the people of Holt who have returned me here. Many of them, like me, are migrants. I suppose one could describe me as a pomegranate. The people of Holt also would expect me on this occasion to thank Sir Robert Menzies for his courteous message to us after the election. Coming from the mother of Parliaments, the House of Commons, I realise that my former colleagues of all parties and on all sides would wish to extend to this Parliament, to you Mr Deputy Speaker, to Mr Speaker, to the Clerks of the House and to all honourable members their personal respects.

It is true that I have made a maiden speech before. That was on 15 June 1955. So I am a pretty old maiden- In the chair was Mr Speaker Morrison. When he finished his loyal service to the House of Commons, Her Majesty made him Viscount Dunrossil. He came to serve us here as Governor-General of Australia. His portrait hangs in King’s Hall. As I saw his portrait I saw very much the same as I see in the new Speakerthat great Scottish charm and that great Scottish courtesy. Mr Deputy Speaker, I hope that you will convey from the electors of Holt our personal good wishes to Mr Speaker. Also, we extend our congratulations to you, Sir, and to all other honourable members who have been elected as officers of this honourable House. In passing, I recall a speech made by Mr Speaker when he visited Dandenong recently. He referred to himself as being like an old milk horse because he knew the area so well. We would prefer to remember him with great affection because prior to redistribution he held the seat and was the Federal member of Parliament.

There is another courtesy I would like to observe as a maiden speaker and on behalf of others who have made a maiden speech. I would like to extend and to record the grateful thanks of new members to the Clerks of the House, to the attendants and to those in charge of transport and the Parliamentary Library. I must admit that I could not have found my way to this place or from this place unless I had received their help at all times.

A maiden speaker is, by tradition, moderate, temperate and non-controversial. Mr Deputy Speaker, this is totally contrary to the whole of my personality and I give this House a solemn undertaking that it will never endure a speech like this again. This evening, however, I must refer to the old and famous seat of Flinders which came into being in 1901 and which has its centre at Dandenong. Of course, historians are disagreeable persons- I respect them- but they do agree on one thing: The journeys of both McMilland and Strzelecki are the first recorded discoveries of the area which I now represent. Indeed, in Strzelecki’s Official Report of the Papers of the House of Commons of 1841 he wrote- I am glad that he wrote it because it makes me feel good:

Prospects to future settlers which this country holds out and which it was my lot to discover I took the liberty of naming after His Excellency, the Governor, Gippsland.

Historically too, these are important centres.

May I now turn to what are important centres in Holt. Firstly I refer to Berwick. It is quite clear from early evidence that Terrance O’Connor sold to Captain Gardiner from New South Wales his land around the centre of Berwick. Because he came from Berwick-on-Tweed he called the city Berwick. It is of course absolutely impossible when referring to Berwick not to say that it is the home of Australia’s most distinguished diplomat of this century- Lord Casey, who served in the Cabinet, as a Minister of State, and who also served in the Middle East.

The great farming area of Cranbourne was first registered in the survey by a Mr Foot of the Lands Department. He seems to have had ideas of nobility. In naming the areas he used quite arbitrary names- names of parliamentarians, Lords Lyndhurst, Packenham, Longford, Cranbourne, you name it. Dandenong itself is the gateway to Gippsland. It was discovered by the Wedge family and eventually became the most important cattle market for the area. It certainly seems to have been swampy in those old times, for a graveyard stone records the following:

Erected in memory of James Morrison, Native of Ballarat who was drowned while bathing his horse in the Bangholme Waterhole.

It would be inaccurate and indeed remiss if I did not mention that the most famous Australian politician came from the area- Lord Bruce of Melbourne who was Prime Minister of Australia between 1923 and 1929. Looking back on my parliamentary career I can remember the green cards- the Clerk of the House will know thiscoming through all the back benches. On those cards were 5 words: ‘Lord Bruce of Melbourne speaking’. Almost at once the back benchers from the Commons moved across to the Lords to hear him. He was a magnificent speaker. I can still recall his voice in the Lords today where he was heard with the most profound respect.

I have mentioned Mr Speaker as a predecessor in the area but I would be wrong if I did not mention Mr Len Reid who took over the seat in 1 969. He was a brave and courageous pilot who served in Malta. His services to the area of Holt are well known. He is respected and loved by everybody. In this House he was particularly involved with the Australian Parliamentary Christian Fellowship and today he is acclaimed for his work in providing livestock to Bangladesh to improve that country. In Bangladesh the words ‘Reid’ and ‘Australia’ are synonymous.

Mr Max Oldmeadow, who came from the present Opposition Party, sat in the House between 1972 and 13 December of last year. Likewise he was a man of learning and likewise he was a member of the Australian Parliamentary Christian Fellowship. Nobody in Holt can quarrel with the amount of federal aid that, one way or another, he persuaded his Ministers to put into our area. It is only fair and just for me to say that his efforts in obtaining Federal funds were for the best possible ends. I am thinking of the Commonwealth library in Doveton, the children’s centre in Dandenong and the scouts centre in Doveton.

I am in this House to carry on my work and to make this House and the Ministers aware of what the people of Holt require. I hope this House will listen to me with care. I am convinced that the points I am going to make do apply to other areas as well. Firstly, there is no doubt from the speeches tonight that there is a very serious, critical economic situation in Australia at present. I believe above all else that this country needs a national plan. It seems to me to be unbelievable that a nation which is dependent so much on foreign investment, whose economy is so volatile and whose exports are bound for Japan and other nations in the Far East, has no national plan whatever. If France can work out a national plan for good housekeeping, for common sense in national affairs, surely we can now work one out between industry, the unions and the people for, as a nation, we are all interdependent.

Our second problem revolves around unemployment, particularly among young people. I do not and will not countenance the 2 words ‘ugly teenager’. There are no such people. They are only young people who have been deprived of the love and affection that they should have received as of right. I turn now to the industrialists of this country and ask them what they have done about creating new apprenticeships this year and what they have done about extending their traineeships. What have they offered this year to the young people? Have their personnel officers gone out and negotiated with the employment officers and social welfare officers in the area in an endeavour to help the young people? If not, why not?

Dandenong to day presents a totally different picture from the agricultural centre it use to be. It is now the main industrial centre of industry. I can mention 4 major companies in the areaGeneral Motors-Holden’s Pty Ltd, International Harvester Australia Ltd, H. J. Heinz and Co. (Australia) Ltd and Sperry Rand (Australia) Ltd. There are many small businesses as well. We are involved in serious union problems. I am wondering whether it is right in the closing years of this century to allow a group of people to operate under the title of a friendly society and be totally outside the common law, the law of contract, of this land. I think that this Government and this nation should look extremely carefully at this particular point.

Let me deal with the specific requests that I have received from the areas of Holt. Berwick requires attention and help from the Government for its new state school and finance for its new library. Cranbourne requests the provision of some money in order to enable it to build up the dirt tracks from the town to the bay because those roads are required for the tourist industry. Thirdly, the people of Dandenong have tremendous problems with road congestion and they are interested in the installation of new traffic lights and the provision of every possible help for road safety. I must also remind the Government that it gave an honourable undertaking to the Dandenong Hospital. At this moment in time we do not know whether there are sufficient funds to pay for the new wing of the hospital and the Dandenong Hospital Committee wants to know the Government’s view. Fourthly, Doveton expects some help- in particular, help for its health centres and to improve social services. It badly needs social workers and a doctor. I must say that the people of Doveton show an extraordinary spirit of community work which is remarkable and I shall never refer to that area as being underprivileged or backward.

Fifthly, the people of Springvale, Noble Park and Dingley are anxious about road safety. They are above all worried in case the Government should fail to continue to give financial assistance to the Housing Commission to build more houses. Also in the same area Father Moran has a Catholic school program for a new centre and I hope that the Government will support this project too. In the fast developing area of Dingley all possible help is needed to assist in the provision of sewerage.

I want to turn in the last few minutes to the wider field of world affairs. It was no accident that I went on the first all Party parliamentary mission to China and I must say now that I wish to assure His Excellency, the Chinese Ambassador here, and Dr Fitzgerald that there are many people in this country who are most anxious to improve cultural relations between the 2 nations and I will do all I can to assist. In Africa today we have come to the most critical impasse in the affairs of the Rhodesian Government and I now make a special plea to our friends in Rhodesia. I am referring particularly to Prime Minister Mr Smith, Lord Graham, Mr Van der Byle, Mr Harper, the Ministers, the Cabinet, the churches and to all the moderate elements in the nation. It is perfectly possible that in 1966 they completely misunderstood the efforts of the Prime Minister of Malta and myself who desired and tried to work for a Commonwealth arbitration commission of 3 Premiers to go in an endeavour to sort out the terrible difficulties in which the Constitution of Rhodesia had got and also her relations with Britain.

Today the Rhodesian nation will be receiving Lord Greenhill. He is a man of great wisdom. At this moment I beg all members of the Rhodesian Government to try at once to solve the constitutional problem because there is very little time left. We in Australia have a special interest in Rhodesia through the tobacco industry, through mining and through family connections. Indeed, the last commander of the Royal Rhodesian Air Force was an Australian. For those who work in foreign affairs it is always advisable to remember that right must be morally right and to work for it. However, I do feel that a former member of this House knew what it all meant. His name was Colonel Billy Kent Hughes. To fight for that which is right is no easy task, and this is the poem that he once wrote:

How will man use the knowledge he has gained

To help his fellow men or keep them chained

To the wheels of slavery, well greased with hate?

Or will he rise the master of his fate

And on this planet whirling through space remove the barricades of pride and race,

Of language, colour, creed and rigid caste

And find enduring happiness at last?

As an honorary Texan I think I might be allowed without causing any upset to use the words of Abraham Lincoln:

Let us have faith that right makes might, and in that faith let us, to the end, dare to do our duty as we understand it.

My duty is quite clear. It is to observe as we do in our prayers our duty to God, to stand up for the things which are right, to serve the people who have elected me here, to work for the Australian people as long as I am in this Parliament and above all to support and care for the traditions of this honourable House. Therefore I commend to the nation and to the people of Holt the words that are contained in this gracious speech from the Governor-General.

Mr MARTIN:
Banks

-I feel somewhat modest following that excellent speech made by the new honourable member for Holt (Mr Yates) and whilst I am no expert on the history of America there is one quotation to which I would like to refer. These are the words of Benjamin Franklin:

Where liberty dwells, there is my country.

After hearing the events of the last few months I often wonder whether there is any liberty in this country. It is traditional when speaking in the Address-in-Reply debate to congratulate the Speaker on his appointment to that august position. I do so publicly now having done so privately previously. The position of Speaker is an important one. The Speaker must uphold the dignity of the Parliament not only within this chamber but also outside it. I am sure that the present Speaker has the capacity to do just that. In fact, I think I can say off the record that quite frankly I was surprised at how well he has been doing his job. That is meant to be a compliment.

There is another matter about which I am gravely concerned, namely, the dignity of Parliament as an institution; even the very survival of the parliamentary institution itself. I refer to the Goebbels’ technique of the big lie, the smear campaign and the destruction by innuendo. The architects of this destruction of our democratic institutions are none other than the Press barons of this country. Time and again we see the Press campaign of denigration of the elected member of the Parliament, whoever he may be. The campaign seems to be to drag down the leaders, and it seems to be becoming more maniacal in its intensity, for what reason I know not. In the short period in which I have been a member of Parliament, I have seen this maniacal campaign in operation and I say that unfortunately it has succeeded.

First, there was the campaign to destroy John Gorton, a previous Prime Minister. The campaign of slurs, lies, and innuendoes succeeded. We lost, in my view, a good Prime Minister, a real Australian. Then the hatchets were out for his successor, one of the former Prime Ministers, the right honourable member for Lowe, the right honourable William McMahon. The Press campaign again succeeded. The Liberal-Country Party Government lost office. The Press campaign was then on to boost the present Speaker and he became Leader of the Opposition. However, he did not last long in their good graces. The hatchets were out after him, including some hatchets from within his own Party. The Press again succeeded in its campaign and Mr Speaker was axed and replaced by the honourable member for Wannon, Mr Malcolm Fraser, the present Prime Minister. The campaign then really started in earnest to bring about the defeat of the twice elected Labor Government. There was the same pattern by the Press- slurs, lies, innuendoes, no holds barred, anything goes. The net result of this maniacal Press exercise of power was the dismissal of the democratically elected Labor Government by the Governor-General. A new Government was subsequently elected by what we call a democratic election.

The question I pose is this: Is it really a true exercise of the democratic process when the Press and the media of this country can exercise so much power over the thoughts and actions of people, that the people become as mere putty in the hands of three or four Press barons? It is a sobering thought, but this is what has happened in the past and is still happening. The Speaker of this Parliament has a grave responsibility to protect not only the rights of members of this Parliament but also the parliamentary institution itself. The forces of ultra conservatism- the extreme right- are as great a threat to the democratic parliamentary institution as are those forces of the extreme left.

There is one thing- I feel I must comment on it- that worries me after hearing most new honourable members of the Liberal-National Country Party Government make their maiden speeches in the Parliament. Unfortunately the majority of them seem to me to be ultra conservative, ultra right wing and out of touch with the real people in the electorates. I wish them well when they come down to earth.

Mr James:

– Young Turks.

Mr MARTIN:

– As my colleague has said, they are young Turks. I think that is a very appropriate expression. On 1 9 February I directed a question to the Prime Minister regarding allegations of activities in Australia by the Central Intelligence Agency of the United States of America. I asked the Prime Minister whether he intended to have an investigation made into the allegations and to report the results of the investigation to this Parliament. The Prime Minister said that the allegations were absurd and gave no assurances of conducting any investigation. That same day the honourable member for Chifley (Mr Armitage) also raised the matter in this Parliament and asked the Government to institute a full inquiry to ascertain whether the allegations were correct or incorrect. So far there has been no response from the Prime Minister or from any spokesman for the Government. The Prime Minister just cannot sweep these serious allegations of Central Intelligence Agency activities in Australia under the carpet. There should be an inquiry, not only into these specific allegations but also into other allegations of CIA activities. I would favour a move to set up a select committee of both Houses of this Parliament with representation from the Government and the Opposition to probe completely the specific allegations and all other allegations of CIA involvement in Australia.

The important issue is whether the Central Intelligence Agency has been operating in Australia covertly to topple a legitimately elected Labor Government. That of itself is sufficiently important to warrant an inquiry into the whole issue. It is just not good enough for the Prime Minister to try to cover up. It is just not good enough to say that allegations of CIA activities in Australia are absurd. It has been established as a fact that the CIA has been involved in activities to topple legitimately elected governments in other parts of the world, so why not in Australia. Ex-President Richard Nixon adopted the same attitude as that being adopted today by our own Prime Minister. If Richard Nixon’s protestations had been accepted there would have been no Watergate inquiry. Why will the Prime Minister not set up this inquiry? Is it because he fears the truth, as did Richard Nixon? The Australian people want no part of foreign interference in our affairs, irrespective of the country of origin of that interference. Inquiries currently taking place in the American Congress have indicated that interference in elections in other countries accounted for 30 per cent of the covert activities of the Central Intelligence Agency of the United States of America.

There is evidence to show that on 10 November 1975, the day before the GovernorGeneral dismissed the Whitlam Government, a cable was sent from the Australian Security Intelligence Organisation liaison officer in Washington to the Director-General of ASIO in Canberra conveying a message from the head of the East- Asia Division of the CIA, a Mr Shackley. The CIA was apparently concerned at the activities of the then Prime Minister, Mr Whitlam, and threatened to sever all intelligence links with Australia. The CIA was also apparently concerned with the activities of ASIO. There had been a revelation of the names of CIA operatives in Australia. Four people had been named- a Mr Walker, who was purported to be the CIA station chief in Australia, and three other CIA agents who had been designated as officers in charge of the ultra-secret installations at Pine Gap near Alice Springs. Those 3 people were named as Mr Fitzwater, Mr Bonin and Mr Stallings.

It is interesting to note that in early November 1975 Mr Whitlam had spoken about Mr Stallings and his association with the Leader of the National Country Party, the Rt Hon. Douglas Anthony. The CIA had apparently jumped to the conclusion that Mr Whitlam, who was then Prime Minister, was a threat to CIA activities in Australa. The CIA apparently feared that Pine Gap was under threat, particularly as the agreement with the United States of America came up for renewal on 10 December 1975 which, it is interesting to note, was 3 days before the forced election. The CIA was also apparently concerned with the then government shakeup of ASIO and other intelligence services in Australia. The Director-General of ASIO, Mr Peter Barbour, had been shunted off to New York as Consul-General and the head of the Australian Secret Intelligence Service, Mr T. W. Robinson, had been sacked.

Mr Millar:

– By whom?

Mr MARTIN:

– By the Prime Minister of Australia, the Honourable Gough Whitlam. ASIO had been an embarrassment to the Whitlam Government, and in view of the close liaison between the CIA, ASIO and ASIS it would be true to say that the CIA had become an embarrassment to the Whitlam Government, and the CIA was aware of this. Is it any wonder that the CIA had reason to work against the Whitlam Government? History has shown that CIA dirty tricks helped to unseat the legitimate government of Australia, as had been done in other countries to legitimate governments. I have no doubt it was done here.

Honourable members will recall the letter bomb incidents. We do not seem to have heard anything about them since the elections. That is a typical example of a CIA dirty trick. There is evidence to show that operatives from ASIS were working in Chile after being trained by the CIA during the period when President Allende was President of that country. It is known that Prime Minister Whitlam ordered their withdrawal as soon as he became aware of their presence there. Is it any wonder that the CIA was concerned that the continuance of the Whitlam Government was a threat to its own interests, which were not necessarily the interests of the United States of America? Is it any wonder that there is a real suspicion that the CIA had much to gain from the removal of the Whitlam Government and did in fact work to that end? That is the reason why there should be an inquiry- either here by a select committee of the Australian Parliament or by the already established committees of investigation set up by the United States of America Congress.

The CIA is an evil organisation. They are not only my words but also the words of one of its operators, one of its agents. Let me quote the words of Phillip Agee:

After 12 years with the CIA I finally understood how much suffering it was causing, that millions of people all over the world had been killed or at least had their lives destroyed by the CIA and the institutions it supports.

He also said:

Even after the revelations we ‘ve had so far-

He was referring to the world-wide activities of the CIA- people still don’t understand what a huge, powerful and sinister organisation the CIA is. It is the biggest and most powerful secret service that has ever existed.

I quote him further:

I don ‘t know how big the KGB-

That is the Russian equivalent of the CIA- is inside the Soviet Union, but its international operation is small compared with the CIA. It’s known now that the CIA has 16 500 employees and an annual budget of $750m. But that is not counting its mercenary armies, its commercial subsidiaries . . . Add them together and it spends more like billions every year.

The question which I ask the Government Parties is this: How much of that billion dollars did they receive for their election campaign? How much did the National Country Party of Australia receive from the multi-national oil companies? Honourable members opposite should not feel ashamed to admit it because they join a long list of other conservative right wing parties which are dedicated to maintaining the status quo and the oppression of the have-nots. A tremendous amount of damage has already been done to Australia’s relationship with the USA over allegations of CIA involvement in the events which took place prior and subsequent to the dismissal of the Whitlam Labor Government.

These allegations must be investigated. Obviously the Australian Government will not carry out these investigations. It has too much to lose. It is frightened. In the name of democracy there is no other alternative than to ask that the United States Congress itself investigate the activities of the CIA in Australia. I shall ask Senator Frank Church, the Chairman of the United States Senate Select Committee to Study Government Operations with respect to Intelligence Activities, to investigate CIA activities in Australia. I shall also ask Congressman Otis G. Pike, Chairman of the Select Intelligence Committee of the United States House of Representatives to investigate CIA activities in Australia. I have no doubt that these investigations will establish that the United States of America Central Intelligence Agency has engaged in covert activities in Australia over a long period which eventually led to the destruction of a legitimately elected government. The name of Australia will be added to a long list of other countries where CIA activities have damaged the good name of the United States of America.

Mr DEPUTY SPEAKER (Mr Drummond)Before calling the honourable member for Ballaarat I remind honourable members that this is the occasion of the honourable member’s maiden speech. The usual courtesy of silence will be appreciated.

Mr SHORT:
Ballaarat

-Mr Deputy Speaker, I am delighted to support the motion before the House which was so ably moved by the honourable member for Eden-Monaro (Mr Sainsbury) and seconded by the honourable member for Dawson (Mr Braithwaite), and to reject the amendment moved earlier today. I am sorry that my speech is following that of the previous speaker, given the content of his remarks tonight. It is a great personal pleasure for me to join others in congratulating Mr Speaker on his election to such a high and important office and the honourable member for Lyne (Mr Lucock) on his restoration to his near traditional position of Deputy Speaker and Chairman of Committees.

I am deeply honoured simply to be a member of this House. I am even more honoured because I represent the people of the electorate of Ballaarat. I thank the people of my electorate very sincerely indeed for reposing their trust in me to represent them in Canberra for the next 3 years, and I hope for many years beyond that. I can only assure them that I shall strive with all my ability to justify their trust in me. The Ballaarat seat has now had 9 occupants. There have been some notable names amongst them. The most well known and illustrious was Alfred Deakin, three times Prime Minister of Australia. For the past 20 years the seat was represented by the honourable Dudley Erwin. He was a wonderful local representative and also a fine parliamentarian who achieved high office in government. It is with considerable humility that I attempt to fill his shoes, both in this House and in Ballaarat. I echo the sentiments of the whole of my electorate in wishing him health and success in the years ahead.

The sine qua non of responsible and efficient government is a close relationship with and a mutual respect and trust between the government of the day and the Public Service. In recent days I have been appalled to listen in this chamber to a vilification by certain honourable members of the Public Service and the Treasury in particular. The attack has come principally from the other side of the House. Regrettably, however, it has been echoed by certain honourable members on my own side. As an officer of the Public Service for 20 years before entering Parliament- the last dozen of those in the Treasury- I can only deplore such attacks. Even more is this so when individual officers are singled out for vilification as was done by the honourable member for Hindmarsh (Mr Clyde Cameron) last week. The senior officers of the Treasury, and indeed of all Public Service policy departments, are dedicated, highly qualified professionals whose objective advice no government can afford to ignore. Those officers have made a greater contribution to responsible government and to the well-being of all Australians than the likes of the honourable member for Hindmarsh could make if he sat here for 100 years.

That is not to say that the Public Service will always be correct in the advice it gives. Of course it will not. I believe there is real point in the argument that key policy departments are often too remote from the world outside Canberra. But equally, the world outside Canberra is frequently too close to its own affairs and individual interests to see issues objectively and in the overall national interest. The solution is not to pay no heed to one side or the other but rather to pool the particular expertise, experience and opinions of the various parties. Only in this way can the best advice by distilled. The remarkable economic performances of countries like Japan and Germany in the past quarter of a century can, I believe, be attributed in large measure to such an approach to decision making. All sections of the community have a role to play in this processunions, employees, employers, both large and small, industry groups, consumers, representatives of welfare and social organisations, academics, the Public Service and the Government. It is a major responsibility of government to ensure that the necessary machinery is established to facilitate such consultative processes. I am delighted to see that in many areas the Government has taken steps already to get the machinery side of things all right. I urge the

Government to continue to place much importance on this aspect of its activities.

Equally important I also urge interested parties outside government to ensure that their own houses are sufficiently in order to be able to participate effectively. I have particularly in mind here certain rural industries where, too frequently, the members of the industry are not sufficiently cohesive and unified when approaching the Government. But the establishment of the machinery is not enough in itself. There must as well be a real wish and a will on all sides to participate and contribute constructively and cooperatively.

I turn now to several aspects of the GovernorGeneral’s Speech. I will restrict my remarks principally to economic issues. However, it is not possible to set aside economic issues from other issues. There is a vital inter-relationship between economic, social, migration, environmental, education, defence and other issues. Decisions taken in any one area generally affect the other areas. At the end of the day it must be a question of determining overall priorities. It is an old saying, but a true one that you cannot get a quart out of a pint pot. We do not have a limitless pit of resources in Australia, nor can we draw without limit on the resources of other countries.

One of the cardinal errors of the Labor Government was that it did not recognise this simple yet fundamental truth. The Whitlam Government tried to do everything at once. In so doing, it introduced such a degree of capriciousness and incompetence into government policy making and administration as to destroy confidence throughout the entire community and to destroy the ability of the private sector- large and small business alike- to produce the real resources needed if Labor’s social welfare and other programs were ever to be fulfilled. It decimated the rural sector without any apparent regard or concern for the consequences. It alienated several of our major trading partners. It took such a xenophobic and obsessive approach to foreign investment in Australia that it brought to their knees several vital sectors of the economy which rely heavily of foreign investment, notably the minerals sector. It ignored the major contribution that foreign investment has made in developing Australia throughout its history and which it will be required to continue to make in the future. In short, Labor killed the goose that laid the golden egg. In so doing, it killed any hope of achieving the goals- many of them desirable- that it had set itself.

I congratulate the Government on the start that it has made since December in picking up the pieces. There can be no doubt that the general thrust of its economic policies has been along the right lines in that it has been directed at the number one problem facing Australia- inflation. Unless inflation is brought down to an acceptable level we will never be able to solve our other problems, particularly those of unemployment and high interest rates. Nor will we be able to build for the future, provide for the needy in our community, or improve all those things that need improving in this country such as health, child care, roads and so on. Only by drastically curtailing the rate of increase in government expenditure can the Budget deficit be reduced substantially in other than the very long term.

Why is it imperative that the Budget deficit be reduced much earlier? It is imperative because if it is not reduced we will continue to have the situation of imbalance between fiscal and monetary policy which characterised the last 2 years of the Whitlam Government. Such imbalance throws the whole weight of economic management onto monetary POliCY. The consequences of this in terms of the level of interest rates and of rapid changes in the availability of money are all too obvious from the events of the last 2 years. The people of Australia must recognise that unless the Budget deficit is reduced there is no way in the world that the interest rate structure can be lowered. Indeed, if the deficit were to continue at its present enormous level during the period when economic recovery gains momentum, then interest rates would have to rise.

An important question is the time scale over which the deficit should be majorly reduced. The deficit, through its effects on overall liquidity, will have its most horrendous inflationary consequences when consumer demand picks up substantially. It is a matter of some judgment as to when this may occur. What we must ensure, though, is that liquidity in the economy is not excessive at that stage, otherwise we will be back into the boom and bust era and the inevitable problems of stop-go economic policy. In 1974 and 1975 the whole thrust of economic policy was in the wrong direction and in a state of utter confusion. The new Government has corrected this. Australia is now moving in the right direction, thanks to sensible and courageous policy decisions by the Government. But we are still in the early stages of recovery. Business and consumer psychology will be of the utmost importance in the months ahead. Hard decisions will have to be taken, and this means that more than ever a steady hand at the wheel of economic policy will be required. Too rapid a turn of that wheel, in whatever direction, could cause the ship of recovery to list. What we need is a return to a stable and long run growth path, and this requires a return to stable and reliable government. Labor tried to introduce change, both social and economic, too rapidly. We all suffered enormously. The rate of change is critical both to institutions and to people. If the rate of change is too rapid the system and the people who go to make up that system experience what Tomer has so appropriately described as ‘future shock’, to the lasting detriment of all concerned.

Almost exactly 5 short months ago a man well versed in economic policy and one who is well known to us all in this House, and indeed to most Australians, made a major speech in Melbourne. It was such an excellent and well thought out speech that I should like to quote some extracts from it. The speaker said:

It should be appreciated that there is a limit to the rate of change, to the level of activity, which can be funded from the public sector at any given time.

A problem, and it is the basic economic problem of mankind, is that demands for resources are limitless but the supply of resources is finite.

If the public is not prepared to pay higher taxes- and it seems that for the time being, at least, the public is not- then the Government must limit the level of expenditure.

I believe that for the time being we have carried out as much change in the direction of a larger public sector as our political system will allow- indeed, we have strained the limits of public acceptability.

Honourable members will note that a great deal of what I have quoted coincides very closely indeed with the types of things I have been trying to say tonight, which in turn are very similar to the Government’s thinking. Who was the author of the address? It was the honourable member for Oxley (Mr Hayden), delivering the Arthur Calwell Memorial Lecture at Monash University on 22 September 1975. At that time he was Treasurer. It is the same honourable gentleman who harangued us earlier today with a tour de force of economic gobbledegook that would be hard to surpass. How difficult the honourable gentleman must have found it to speak as he did today. He did not believe what he was saying, we did not believe what he was saying, and the vast majority of Australians would not have believed it either. How difficult indeed he must find it to sit with the colleagues with whom he keeps political company.

In concluding my remarks I wish to return to where I commenced, namely, the electorate of Ballaarat. I guess that most honourable members think of their own electorates as being somehow unique. I believe I have more cause for so thinking than many other members. Ballarat itself is steeped in the history of Australia. It is said by many that democracy in Australia was born in the 1850s at the Eureka Stockade. The wealth generated by the Ballarat gold fields had a major impact on the economic and social development of Victoria in the nineteenth century. Today the electorate is very much a mixture of primary, secondary and tertiary industry. For example, it is in the heart of the largest potato growing area in Australia and is an important area for sheep, beef and wheat. At the same time it has a considerable and highly diversified range of secondary industry centred mainly in the city of Ballarat itself but located as well throughout the rest of the electorate. Several firms are large employers of labour even by metropolitan standards. However, the main employers of labour in total arc small businesses.

I am pleased to see the encouragement that is now being given to small businesses by the Government, and I am particularly delighted to see the change in the investment allowance that was announced yesterday by the Treasurer (Mr Lynch). This change is to be applauded for its recognition of the problems facing small businesses including, in particular, rural producers. The electorate has several industries including footwear, textiles, roller bearings and other sections of engineering which are highly sensitive to the Government’s tariff and related policies. In Ballarat we also have an area which in recent years- deservedly so- has become one of the main tourist centres in Australia. If any honourable gentlemen would at any time be contemplating the spending of the odd tourist dollar I would be happy to extol to them even more strongly the virtues of my electorate.

The problems facing the electorate are much the same as those facing many other nonmetropolitan electorates. There is a need for greater facilities for both the aged and the very young, for the handicapped and for those who for a wide variety of reasons need assistance. I am proud to say that the electorate places great emphasis on self-help and voluntary effort in many of these areas but there are still many where only government can provide the necessary financial requirements. In present conditions the increasing calls on government will of necessity meet with a less than full response. It is for that very reason that the economic chaos of the past 3 years must be rectified as soon as possible to enable this nation to get on with the longer term tasks confronting it.

It is not only welfare and social services to which this situation applies. Roads are another and serious case in point. Under the National Roads Act 1974 and the Roads Grant Act 1974 the proportion of Federal funds going to rural, local and arterial roads in Victoria is planned to fall from 22.5 per cent in 1974-75 to 8.8 per cent in 1976-77. In money terms the figures are $ 17.3m and $7.5m respectively. Rural local roads in 1 976-77 will be receiving 5.5 per cent of the Federal road grant despite the fact that in Victoria these roads comprise 74.6 per cent of the State’s total road network. That is a situation which, in my view, is patently unjust and is leading to major deterioration in many rural roads. I would urge the Government to ensure that when funds for the next triennium are being determined rural local roads be given a more equitable proportion of the Federal funds for roads.

The main point I wish to make about my electorate is the inter-relationship of the various components of the electorate. Major setbacks in the rural sector have a consequential effect on the manufacturing and commercial sectors in the electorate. Setbacks in the manufacturing sector, for whatever reason, have a consequential effect on the commercial sector, and so on. No one sector of the electorate can be considered in isolation. That point has particular significance insofar as the activities of the Industries Assistance Commission are concerned. I have the impression that the Commission does not always pay what I would consider necessary regard to the inter-relationship between the industry it is investigating at any one time and the other industries and activities of the area in which the industry is located. This is more significant in country areas than in cities where resources can more easily move from one industry to another without severe economic or social dislocation. In country areas resources displaced from one industry frequently cannot be readily absorbed in another even when the economy is far more buoyant than it is today.

In his maiden speech in this place my predecessor said that the answers to our problems lie not so much in legislation as in the responsibility of the individual. Let it never be forgotten that government can do only so much. Its main role must be to create the right environment in which the community as a whole, all members of the community, can live and work and act with the maximum of individual freedom, economic prosperity, social wellbeing and human dignity. The rest is up to us. Sir, I thank you and honourable members on both sides of the House for hearing me out with such patience and courtesy.

Debate (on motion by Mr Charles Jones) adjourned.

page 392

ADJOURNMENT

Defence Service Homes-Accelerated Office Accommodation Program

Motion (by Mr Viner) proposed:

That the House do now adjourn.

Mr NEIL:
St George

-In the electorate of St George and throughout Australia there are people who are still suffering financial and nervous strain owing to serious bungling by the former Labor Government. They are people who were entitled to defence service homes loans but whose loans were deferred indefinitely. They are paying interest on bridging finance at usurious rates and they have been given no indication of when they are likely to be able to obtain their defence service homes funds. There are 1974 applicants throughout Australia and their wives and families are seriously prejudiced. The legislation, as is well known, was introduced to benefit servicemen who lost many advantages owing to their service; they lost many rungs on the ladder of life. The legislation was extended by the former Labor Government to include servicemen who did not serve overseas in a war zone in order to compensate them for the itinerant nature of their occupations and as part of the policy for a volunteer army.

In 1975-76 the Budget allocation was ‘ $122. 5m. Since that time, on more than one occasion there have been compulsory waiting periods- not through the fault of the Departmentin many cases after the applicants had received final approvals and in many cases after they had exchanged contracts. This was a tearing-up of the law. It represented a tearingup, as a result of Labor policy, of the rights of individuals who had entered into very important engagements in the legal sphere. In early 1975 there were a number of instances of people who had exchanged contracts and were within a few days of settlement, having made arrangements for removalist and for all the necessary requirements to move, who found that their cases had been deferred indefinitely. Those people were forced to take bridging finance or lose their deposit. I am told that there was at least one case of a young couple who lost their deposit. This is a clear example of the Labor Party’s much vaunted respect for the rights of the little man being seen to be completely nullified. Who wants to lose, at that stage of life, a deposit of $3,000 or $4,000 because of this sort of bungling? I might add, Mr Speaker, that in many cases the cost to the individuals, who are not rich people, was $300 or more in extra interest for a month or so and an extra $ 1 00 or $ 1 50 in legal fees to sort out the problem. I understand that that money was lost to the persons concerned.

The Department says that in some cases there was fine print in the documents; but what is the use of that to people in this predicament? I understand that there was no fine print in the early stages but some was introduced in the middle of last year. Then, on 22 August 1975 a compulsory waiting period of 11 months was introduced- not from 22 August, but from 1 August. People who read about it in the newspapers on 23 August read that the compulsory period was backdated to 1 August. It did not matter whether they had their approval or whether they had exchanged contracts. Many of these people were faced with the same difficulty. Whatever may be said about any discussions over the counter between the client and the Department and whatever may be said about fine print, it simply is not good enough. These people acted in good faith. I am informed that a number of them- about forty- used the solicitor who also acted for the Department which provided the loan. Surely in those cases some further procedure could have been adopted to protect these people. The present situation is that a number of people, including, as I say, people in my electorate, are now in circumstances in which they have been deprived, if they are in the later years of life, of a satisfactory retirement. As is known, many people use this loan in later life. If they intend to use it they so pattern their financial arrangements. They hope to have a reasonable peace of mind when they retire, and they tailor their commitments accordingly. Now they are faced with having to pay an extra 12 per cent interest, and they have no indication of when this situation will end. All that has been said so far is that the matter will be reviewed.

The effect of the Labor Party’s policy in these cases, particularly where contracts had been signed, was, as I say, totally immoral. It ripped up the law. The Labor Party which for weeks we have heard pride itself on having the divine right of morality, has been seen to commit nothing less than a fraud upon the very people in this community who, under the Act should receive priority- the very people, servicemen and the like, who for the last 3 years were denigrated by this Government. I make these suggestions: The position is very urgent. Let us take a young person who has missed a few of the rungs of life. He comes out of the Army and he wants to get a home. What is the point of his hanging on for 12 months or 2 years before he receives a loan? He neeeds the finance immediately. It is a complete subversion of the Act to fob him off, to make him wait a long period. It defeats the entire purpose of the Act. I merely ask the Minister to treat this matter with considerable urgency.

It is not a matter in which a particular set of immediate actions could be suggested, but I make 2 suggestions. Firstly, it is obvious that the Labor Party let the whole position get right out of hand. Perhaps consideration should be given to introducing a priority system. Priority should be given to those who have served the longest, to those who have served overseas and to those who have exchanged contracts. Then all I would hope is that those who are entitled to a loan under the Act would receive their moneys as soon as possible. Secondly, I understand that there is little difficulty in the banks carrying out much of this type of administration. The administrative costs of the Department in dealing with these loans are very high. Provided that the banks were able to draw the finance, there does not seem to be any reason why discussions should not be instituted with the banks or with other institutions to see whether it would be reasonable for them, to take over this function. But it would be necessary to ask them about it. It would be necessary to see whether the training courses in relation to the Act could be put into operation. They should be very simple. No doubt the banks would welcome the contracts. Probably they would get more customers out of it and this Government’s avowed intention of reducing public spending might well be met.

This matter is causing considerable worry to the people affected. A couple who have 3 days to go before they move into their dream home receive a letter saying that it is all off. It costs them a great deal of money to do something else about it. A large number of people went into the war service loans office shortly before Christmas last year. I am told that there was an angry melee of people pouring out of the office. They were frustrated because they had been turned away. Perhaps more publicity would have been given to this matter but for the political events that took place at about that time. During the last few years there has been too much of that type of bungling from the Labor Party. There has to be an end to this stop-go procedure. I put to the House that there has been effectively committed a fraud upon persons entitled under the Act. The sooner this is remedied the sooner we can see that those most worthy persons in our community are given the justice to which they are entitled under the law.

Mr Keith Johnson:
BURKE, VICTORIA · ALP

– I am pleased that the Minister for Construction (Mr McLeay) is in the chamber because the matter which I wish to raise will be of great interest to him. It affects a large number of people, mainly public servants, in Melbourne, particularly in my area of Broadmeadows. It came about from an article in the Melbourne Age this morning headed ‘$80m Office Plan Scrapped’. The article states that the present Government does not intend to proceed with a proposal put forward by the previous Government. The proposal was the construction of office accommodation for public servants at various locations in Melbourne. In October last year the Labor Government announced that it proposed to provide office accommodation at Sunshine, Broadmeadows, Watsonia, Epping and Dandenong. Broadmeadows and Epping are in the electorate of Burke, Watsonia is in Diamond Valley, and Dandenong is in Holt. I hope that the members for those electorates will join with me in an endeavour to persuade the Government to change its mind and proceed with the original proposal. My friend, the Deputy Leader of the Opposition, when he was the Minister for Urban and Regional Development, considered this proposal.

It is a simple plan. In its simplicity lies its brilliance. The plan is popular and practical and would involve the Australian Government in no outlay of money for capital works and would commit it to no more exenditure than is now being incurred. There could be a reduction in expenditure. The previous Government was concerned at the concentration of public servants in the central business district of Melbourne- indeed, in all capital cities- and consciously sought to move them to the suburbs. This benefited the public servants who could work at places close to their homes. It eased the load on the egress and ingress routes in Melbourne. The proposal was for developers to provide funds. So no Australian Government money was involved in constructing the buildings and becoming landlords of the buildings. The plan was for the Australian Government to agree to lease the buildings for a fixed period at an agreed rental, with an option to purchase at some time in the future.

For some years I have approached various Ministers to have established in the City of Broadmeadows an Australian Government centre. The Council of the City of Broadmeadows supports my efforts. The Department of Social Security, the Commonwealth Employment Service, the Divisional Returning Officer and myself are housed in rented premises at various locations in Glenroy. Those premises could hardly be described as satisfactory because of the proximity of an arterial road which carries a large volume of heavy motor vehicles. The City of Broadmeadows has a fine City Hall, with excellent administrative offices, standing on a large allotment of land adjacent to a suburban railway station and a regional shopping centre. It is well served by public transport, with ample car parking space for private transport.

Land is available. Negotiations could be held with the Broadmeadows City Council. There would be no capital outlay by the Australian Government. The Broadmeadows City Council was enthusiastic to join with the Australian Government and a developer to develop the Civic Centre into a one-stop operation for any citizen requiring assistance from either the Australian Government of local government. The City will be deeply disappointed to learn that a building designed to complement its buildings and services and the provision of services to complement its services will not now proceed. The private developers will be disappointed as the proposed projects would have given a much needed fillip to the construction industry. The popularity of the scheme is not in doubt, as I understand that some 90 companies tendered for the right to construct the buildings. There seemed to be only advantages in the proposal and no disadvantages. So it is difficult for me to understand why it has been discontinued.

It is believed that some 10 000 public servants would be housed in the buildings. Rent is being paid now to house these people. They are not extra public servants; they are existing public servants. The amount paid in rent each year by the Australian Government for premises is of gigantic proportions and could be the subject of a separate debate. I repeat that no Government funds are required to construct the buildings and the rent to be paid for the buildings is being paid now. Senator Withers has been reported as follows:

The Liberal Government had reviewed the proposal in the light of its overall economic assessments.

It seems very strange that a project which will cause no expense to the Australian Government but will provide an excellent service to the community, a benefit to our own employees, and an advantage to the construction industry, can be considered as part of an economic assessment. It is my fervent hope that the Government will reconsider its decision and ensure that this scheme proceeds as originally planned.

Mr McLEAY:
Minister for Construction · Boothby · LP

– I assure honourable members that I shall not take too long but as this is the first time that I have had anything to say in this chamber in the life of this Parliament, may I congratulate you, Mr Speaker, on your election to your office and may I say that I hope you remain there for many years- you in your capacity and we in ours.

Mr SPEAKER:

– I depart from the practice of the Chair by congratulating the honourable gentleman who has been a friend of mine for very many years on becoming a Minister of the Crown.

Mr McLEAY:

-Thank you, Mr Speaker. I hope that we can retain this happy atmosphere in the chamber for a bit longer. May I thank the honourable member for Burke (Mr Keith Johnson) also for his courtesy in telling me earlier this evening that he intended bringing this matter up tonight on the adjournment and giving me the opportunity to find out some of the facts? I must confess I knew nothing about them. I hope that he will not go away after tonight’s proceedings with the view that I still do not know anything about the matter.

Having consulted the Minister for Administrative Services (Senator Withers), with whom this responsibility really rests, I find that this program was known as the accelerated office accommodation program which was introduced by the former Government in October of last year. When I say it was introduced, I understand that it was approved by the former Labor Government. But of course time overtook the then Government and the program was not translated into legislation. The program was introduced by the then Department of Urban and Regional Development. I acknowledge that the honourable member for Burke has had many years of service on the Public Works Committee, including service as Chairman of that Committee. I think that both he and I could find a lot to criticise in some of the activities of the Department of Urban and Regional Development. It was a Department full of planners and, if I may use the expression, socialists- people who tell people where to go to live and where to go to work.

This accelerated office program was a very good example of that Department’s thinking. I remember that when we were in Opposition the then Department of Urban and Regional Development introduced lots of socialist programs. At the time, I was speaking for the Opposition on these matters and I remember particularly some of the legislation that affected Albury and Wodonga. I am sure the honourable member will remember the election campaign when the former Minister, Mr Uren, issued Press releases at the rate of something like two or three a day which floated this idea of regional office accommodation and the idea of forcing’dispersing’ is the word that was used in the Press releases but ‘forcing’ is really what was meantpublic servants to go and live in, say, AlburyWodonga, or in the places the honourable member mentioned tonight, such as Blacktown and Campbelltown, Broadmeadow and Watsoniaplaces that I understand are as far as 30 or 40 miles out of Melbourne.

Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP

– Oh, fair go!

Mr McLEAY:

– I have been through the honourable gentleman’s electorate and these places are a long way out of Melbourne.

Mr SPEAKER:

-The honourable member for Burke made a powerful statement when he spoke. He should now leave it to the Minister to reply.

Mr McLEAY:

– The point is that in the documents associated with this project, words are used to the effect that this will disperse 10 000 public servants out, of course, into the electorate of Burke. We take the view that the public servants themselves are entitled to have a say in where they work. We do not believe that anybody should be forced or conscripted to work or live anywhere where they do not want to live and work. This is really what this sort of project boils down to.

I remember the debates on the Northern Territory Land Acquisition Act which was introduced by the former Department of Urban and Regional Development. I hope that now we are in Government the people who used to plan these things are no longer planning them or recommending them to us. I am sure that some of my friends in the National Country Party of Australia will remember that legislation which sought to give authority to the Labor Government of the day or any other government to acquire land in the Northern Territory and to do a great number of things to householders and people who own land without any right of appeal to any court. This is the way in which DURD used to think.

I remember the case of the Glebe lands. I am sure that some of the older members of this place remember what I suggest was a nonconstitutional purchase of $ 17.5m worth of land at Glebe by DURD for rearranging old dwellings. Not a single extra person will be housed for that money. There are many things that we can say about DURD. This is a DURD plan and for that reason I would like to do what I can to kill it. Honourable members will remember that DURD purchased land at the army camp at Holsworthy with the idea of putting dwellings on it. It used to be an artillery proof range from the days of the First World War. As a result there are still unexploded shells nine to ten feet under the surface of the land.. It is all very well to put a house on the land, but what if one wants to build a swimming pool?

Mr King:

– You would get a lot of holes in you.

Mr McLEAY:

– That is a very sensible interjection, if I might say so. The purpose of referring to DURD’s involvement here is to say that this is one of those old hairy plans of DURD. It is not the slightest bit creative.

Mr Uren:

– What does that mean?

Mr McLEAY:

-The Deputy Leader of the Opposition asks: ‘What does that mean?’ Unfortunately he has missed what I have said. He was the Minister. DURD said: ‘Let us do some creative thinking. Let us get something going. Let us build some office accommodation. It does not matter that we have more office accommodation in this country than we can poke a stick at. Let us build some office accommodation9. That is the way that DURD operated. This is what this plan was all about.

The honourable member for Burke said that the plan he outlined commits the Government to no additional expenditure. He cannot understand why we are opposed to it, why we have thrown it out. Can I just say in the last moments of my speech that the cost of rental of this project would be between $10 and $15 a square foot. The cost of renting the accommodation that the honourable member would have built and which would be added to our deficit would be $10 to $ 1 5 a square foot. There is more office accommodation available in Sydney and Melbourne than it is possible to let at $5, $6 and $7 a square foot. The very best accommodation can be obtained at these rentals. The honourable member for Burke is shaking his head.

Mr Keith Johnson:
BURKE, VICTORIA · ALP

– It is not suitable.

Mr McLEAY:

-It is perfectly suitable. I have seen a great deal of it. At North Sydney there is a building about 15 blocks high. Only one little office is used in the whole building. Any government department would be pleased to have this type of accommodation at half the rental of a building to which the honourable member was prepared to commit the former Government.

What we are saying is that the cost of accommodation under this plan would be double what is available now. Such expense is not necessary. There are stacks and stacks of this sort of accommodation available. We acknowledge that the building and construction industry is in very great trouble but the construction of the accommodation proposed by the honourable member would not do anything to solve their problems. It would cost approximately $20m a year to transfer the 10 000 public servants to whom the honourable member referred. As well, it would cost $6m or $7m just to fit out the offices. Those are the reasons the Government is opposed to this. I say once again that I appreciate the courtesy of the honourable gentleman in informing me beforehand that he was going to raise this matter so that I could make some reasonable response.

Mr UREN:
Reid

-The Minister for Construction (Mr McLeay) spoke about courtesy. He did not even pay me the courtesy of advising me that he was going to deal this matter in the adjournment debate. I heard only the last couple of minutes of his speech. The first of the 2 issues I heard him discuss related to whether the Government should proceed with the $80m project that the former Labor Government wanted to enter into with private contractors for the construction of office buildings to enable Commonwealth public servants to be housed in correct locations and to try to stimulate the building industry. Time and again I have challenged the Government and said that it will renege on that proposal. The Minister referred to the surplus office accommodation in the central business districts of Sydney and Melbourne. Let us analyse the situation. That surplus space is there because during the time of the Government that was in office between 1950 and 1972, and particularly in the period between 1960 and 1972, investment by insurance companies in office space in the central business districts of Sydney and Melbourne increased from $112m to $ 1,200m thus creating a glut in office space in those cities. At the same time, the then Government permitted foreign investment to come into this country unchecked, unplanned, uncontrolled and to overbuild those central business districts. Sydney extends 35 miles to the west, 35 miles to the south-west, 20 miles to the north and 20 miles to the south. Many of the people in the fringe area of Campbelltown, 35 miles to the south-west of Sydney, are living in squalor. Over 50 per cent of the people of the area work in or near the central business district of Sydney. The Labor Government said that it was going to do Something positive. The proposal by the Liberal Government to construct office space at Woolloomooloo to house another 1 5 000 Commonwealth public servants would have cost $70m on 1972 values. The Labor Government said that construction of that building should not proceed, .but an office block to house 5 000 public servants should be built at Parramatta. That program was under way, but this Government has cancelled it. The honourable member for Parramatta (Mr Ruddock) knows that, but he will not get off his backside to do anything about it.

I turn to the private office developers. The Labor Government knew that there was a slump in the building industry. We knew that even with normal public service expansion 500 000 square feet of office space was needed every year to house Commonwealth public servants. We also knew that in order to lift what in many cases were the substandard conditions in which public servants were working, we had to acquire another 500 000 square feet every year. So one million square feet of office space was needed every year to catch up on Public Service accommodation. Therefore, the Labor Government said that instead of buying up the glut of office space in the central business districts of Sydney and Melbourne we wanted office space in what we regarded as the correct locations. We determined that government office space in Melbourne should be located at places such as Broadmeadows, Sunshine, Dandenong and Watsonia to try to bring some balance to the transport system.

The honourable member for Farrer (Mr Fife), who is present in the chamber, is a former Minister for Transport in New South Wales. He knows that the transport system of Sydney cannot work with any efficiency because it is geared to a peak load. Unless commercial development takes place at transport nodes at places such as Parramatta, Liverpool, Penrith and Campbelltown to bring some balance to the transport system the problems of transport cannot be solved. The stupidity of the laissez-faire policy of the conservative government that governed for 20-odd years caused the chaos that exists in Sydney and Melbourne. It is responsible for the glut of office space. It is why the transport system fared so badly. The Labor Government said that it would solve the problem. It said that it would bring about a balance by encouraging private sector development in the areas of Sydney and Melbourne that I have mentioned, thereby killing 2 birds with the one stone by giving a stimulus to the economy. That is the kind of government initiative that was to be taken in co-operation with the private sector.

When I was Minister for Urban and Regional Development I took the initiative in acquiring the Glebe lands. They were offered to the Australian government or to any government agency that wanted to acquire them when Archbishop Loane appeared before the Henderson inquiry into poverty. The Labor Government looked at the matter in a rational way. It engaged a group of consultants to make a feasibility study. They recommended that if we paid no more than $ 18m it would be an economic proposition. We paid $ 17.5m. In the first year following acquisition we paid $1.5m in rehabilitation, and it is estimated that this year a further $2m will be spent, but in the first year we received something like $600,000 in rent.

Why did we buy the Glebe estate? We bought it for 3 reasons. The first was to ensure that the low income earners who were living there would not be driven out of the inner city to such fringe areas as Mount Druitt and Seven Hills, allowing the petty bourgeoisie to move in and take over the terrace dwellings which are now so fashionable in Paddington, as they are in Carlton and other places. The second reason was that it was a townscape over 100 years old that was worth keeping because for too long the people have suffered under the policies of a conservative government. The present Government has even failed to go on with the Australian Heritage Commission which was a positive recommendation of Mr Justice Hope of the New South Wales Supreme Court following his inquiry into the national estate. I ask the Minister for Construction (Mr McLeay) whether the Government is going to go on with the Commission or whether it will destroy it? We considered Glebe part of our national estate and a townscape over 100 years old which was worth preserving. The third reason was to try to prevent further freeway development. The honourable member for Farrer, when he was Minister for Transport in New South Wales, was a little more sympathetic than previous Ministers in this respect. The Main Roads Department in New South Wales was prepared to cut a swathe through the Glebe estate and destroy the houses there to put in another inner city freeway. Freeways have not solved any problems. Once the estate became Australian property we said that no freeways would be built through this area.

Tonight I have had to answer the Minister for Construction because the matters about which he spoke were former responsibilities of mine. The policies of the former Government were positive policies and something of which we should be proud. It would do the present Government good if it carried on the programs we proposed for Woolloomooloo and Glebe. It is time it got off its backside and did something for the construction industry by taking up the former Government’s proposal to inject $80m into the construction industry. The industry needs a stimulus, and that is what the Government should be giving it.

Mr McLEAY (Boothby-Minister for Construction) Mr Speaker, I wish to make a personal explanation.

Mr SPEAKER:

– Does the Minister claim to have been misrepresented?

Mr McLEAY:

– Yes. I did not say that the Parramatta project had been cancelled; I said that it had been deferred.

Mr SPEAKER:

-Order! It being 1 1 p.m., the House stands adjourned until Tuesday, 1 March, at 2. 15 p.m.

House adjourned at 11 p.m.

Cite as: Australia, House of Representatives, Debates, 26 February 1976, viewed 22 October 2017, <http://historichansard.net/hofreps/1976/19760226_reps_30_hor98/>.

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