30th Parliament · 1st Session
Mr SPEAKER (Rt Hon. B. M. Snedden, Q.C.) took the chair at 2. IS p.m., and read prayers.
– Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers:
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble Petition of the undersigned citizens of Australia respectfully showeth:
Whereas the Aurukun Associates Agreement Act was passed in contravention of a 1968 agreement;
Whereas this Act conflicts seriously with Commonwealth Government Policy on Aboriginal Affairs and on Australian equity in multinational corporations working in Australia;
Your Petitioners therefore note with appreciation the statements already made on the matter by Government members but humbly pray that the Commonwealth Government will also
And your petitioners as in duty bound will ever pray. by Mr E. G. Whitlam, Mr Baume, Mr Donald Cameron, Mr Connolly and Mr Innes.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We, the undersigned citizens of the Commonwealth of Australia by this our humble petition respectfully showeth:
Your petitioners therefore humbly pray that milk substitutes be restored to the schedule of Pharmaceutical Benefits for children up to the age of six years as soon as possible.
And your petitioners as in duty bound will ever pray. by Mr Chipp, Mr James, Mr Les McMahon and Mr Scholes.
To the Speaker and the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth that many Australians are concerned at the announced decision by the Australian Government to reduce the 1975-76 Overseas Development Assistance vote by $21m, and by the abolition of the Australian Development Assistance Agency.
We your petitioners do therefore humbly pray that the Australian Government:
And your petitioners as in duty bound will ever pray, by Mr Peacock, Mr Dobie and Mr Innes. Petitions received.
To the Speaker and House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth that many Australians believe that the Australian Assistance Plan is essential for effective social development, and that it has been invaluable in enabling communities to identify and take action on their needs. We, your petitioners, do therefore humbly pray that the A.A.P. be retained and be fully implemented, as recommended in the report of the Social Welfare Commission, and particularly that all regions in Australia be fully funded.
And your petitioners as in duty bound will ever pray, by Mr Bryant. Petition received.
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 since the Australian Assistance Plan is making it possible for citizens to help themselves, thereby ensuring best possible use of limited Government resources, as shown by the fact that over 200 community projects have been initiated or funded through the A.A.P. in the Outer Eastern Region.
Your petitioners most humbly pray that the House of Representatives in Parliament will take immediate steps to continue the Australian Assistance Plan as recommended in the Report tabled by the Honourable the Minister for Social Security, Senator Margaret Guilfoyle in Parliament on 4 March 1976.
And your petitioners as in duty bound will ever pray. by MrInnes.
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 since the Australian Assistance Plan is providing the opportunity for citizens of Australia to participate in an integrated planning process with all levels of Government and since Regional Councils for Social Development foster self-help and extensive volunteer activity in local committees.
We your petitioners do most humbly pray that the House of Representatives in Parliament will take immediate steps to continue the Australian Assistance Plan as recommended in the Report tabled by the Honourable the Minister for Social Security, Senator Margaret Guilfoyle in Parliament on 4 March 1976.
And your petitioners as in duty bound will ever pray. byMrMacphee.
United Nations Conference on Trade and Development
To the Speaker and the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth that many Australians are concerned that Australia take a strong role of leadership at the forthcoming United Nations Conference on Trade and Development.
We your petitioners do therefore humbly pray that the Australian Government instruct its delegation to the fourth session of UNCTAD:
And your petitioners as in duty bound will ever pray. by Mr Anthony and Mr Les McMahon.
To Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Petition of the undersigned citizens of Australia respectfully showeth:
That distress is being caused to social security recipients by the delay in adjusting pensions to the Consumer Prices Index months after prices of goods and services have risen, and that medications which were formerly pharmaceutical benefits must now be paid for.
Additionally, that State housing authorities’ waiting lists for low rental dwellings for pensioners grow ever longer, and the cost of funerals increase ever greater.
Your petitioners call on the Australian Government as a matter of urgency to adjust social security payments instantly and automatically when the quarterly Consumer Prices Index is announced;
Restore pharmaceutical benefits deleted from the free list;
Update the State Grants (Dwellings for Pensioners) Act of 1974, eroded by inflation, to increase grants to overcome the backlog; and
Update Funeral Benefit to 60 per cent of reasonable cost of funeral. (This benefit was 200 shillings, 20 dollars, when introduced in 1943. It was seven times the 1943 pension of 27 shilling a week).
And your petitioners as in duty bound will ever pray. by Mr Lionel Bowen and Mr Les McMahon
To the Honourable the Speaker and Members of the House of Representatives assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:
That whereas uranium found in vast quantities in Australia is the raw material for nuclear fission reaction.
And whereas presently assured reserves of uranium in Australia represent a potential production of over 540 000 kilograms of Plutonium 239 if utilized in Light Water Reactors overseas,
And whereas the Maximum Permissible Inhalation of Plutonium 239 is 0.00000025 gram,
And whereas Plutonium 239 is one of the most dangerous substances human society has ever created, causing mutations and cancers,
And whereas there are no methods of safely and absolutely confining Plutonium from the biosphere for the requisite quarter of a million years,
And whereas Plutonium coming in contact with the air forms an aerosol cloud of micron-sized particles, its most dangerous form,
And whereas the export of uranium may return to us an import of Plutonium particles dispersed in the global environment via the circulation of the atmosphere,
And whereas there are no sure safeguards against the military use of nuclear fission, andthe nuclear proliferation represents a prime environmental threat to all forms of life on the only earth available to us,
And that it is therefore an act of self-preservation to demand a halt to all exports of uranium except for bio-medical uses,
Your petitioners humbly pray that the members, in the House assembled, will take the most urgent steps to ensure:
And your petitioners as in duty bound will ever pray. by Mr Donald Cameron and Mr Jull.
To the Honourable, the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned dozens of Australia respectfully showeth; that we implore our Federal Government to retain a full commitment to the public sector of education, with special interest in the child with special needs.
Your petitioners most humbly pray that the House of Representatives in Parliament assembled will take immediate steps to retain and even extend the Schools’ Commission and to urgently consider the needs outlined above.
And your petitioners as in duty bound will ever pray. by Mr Peacock.
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:
We the undersigned, who are all in the employment of Martin Wells, and are fully aware of the Industries Assistance Commission Report on the Spectacle Frame Industry, deplore their attitude they have taken and their recommendation to the Government, to cease quota restrictions on spectacle frames, sunglasses and sunglass frames, and of the lowering of tariff rates on spectacle frames to 25 per cent.
We have been advised by the Management that if this report of the IAC is accepted by the Government then the Company of Martin Wells would have no alternative other than to sack 400 employees.
The Government is well aware that unemployment is very high. If they accept this report, the Government would be directly contributing to another 400 people being put on the unemployment list.
The very important point that must be brought to the attention of the Government is that 80 per cent of the employees at Martin Wells, live within a 10 mile radius of the factory.
To find other employment in the area would be virtually impossible. Factories in this area, like Martin Wells, do not have a great turnover in staff. It should be noted that the housing population in this area is high due to the fact that Mt Druitt Housing Commission is adjacent to the industrial area. All factories in this area must be kept going to be in the best interest of the people and avoid serious social problems of mass unemployment.
We feel that it would be in the interest of the Government to note that employees have many years of service with this Company, and have obtained a high degree of skill in the manufacture of spectacle frames, which has led to this Company gaining world-wide recognition.
We feel that adoption of the IAC Report would lead to lower standards, conflicting with health requirements and that the higher influx of imported frames would only lead to a higher degree of inflation and a further ‘rip off to the Australian public.
We deplore the report of the Industries Assistance Commission which will end the operation of the last Australian Manufacturer in the industry.
And your petitioners as in duty bound will ever pray. by Mr Armitage.
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 whereas the Democratic control of organisations registered under the Conciliation and Arbitration Act is essential to a sound system of industrial relations.
And whereas Democratic control can only be guaranteed by the opportunity for all rank and file members of organisations to vote in elections for all officials and all Committees of Management and whereas some forces within the Trade Union Movement are attempting to deny rank and file members the right to vote in all Union elections;
Your petitioners humbly pray, that the members in Parliament assembled will take steps to:
And your petitioners as in duty bound will ever pray. by Mr Lionel Bowen.
To the Honourable the Speaker and House of Representatives assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:
We, your petitioners, therefore humbly pray that you will:
And your petitioners as in duty bound will ever pray. by Mr Connolly.
The Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth: That the undersigned 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.
To the Honourable the Speaker and Members of the House of Representatives assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:
That whereas the natural environment of Fraser Island is so outstanding that it should be identified as part of the World Natural Heritage, and whereas the Island should be conserved for the enjoyment of this and future generations,
Your petitioners humbly pray that the members, in the House assembled, will take the most urgent steps to ensure:
And your petitioners as in duty bound will ever pray. by Mr Connolly.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned students and staff of the Mount Gravatt College of Advanced Education, Queensland, respectfully showeth:
That we deplore any attempt to cut back or curtail education spending (including grants) by the Australian Government.
Further we support the ‘E’ Day Campaign of the Australian Teachers’ Federation and the Australian Council of State School Organisations to prevent cuts in education spending.
Your Petitioners therefore humbly pray that the House urge the Government to protect education programs by resisting cuts to expenditure and by encouraging initiatives.
And your petitioners as in duty bound will ever pray. by Mr Jull.
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.
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 present telephone rental charges for people living on farms or in small country towns are exorbitant.
That Melbourne and Sydney people are able to make all of their calls at the local fee charged, whereas many calls to doctors and dentists, etc., by country people are at trunk call rates.
Your petitioners therefore pray for relief for country telephone subscribers.
And your petitioners as in duty bound will ever pray. by Mr Lloyd.
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 400 million people in the world are undernourished
Inflation is hitting the poor countries more than the rich
Every reduction in aid affects people
Australia can afford to help
Australian Aid helps people help themselves
If we are to achieve the United Nations aid target, Australia must give at least 0.55 per cent of Gross National Product (G.N.P.) in the next budget.
And your petitioners as in duty bound will ever pray. by Mr Les McMahon.
To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The petition of the undersigned members respectfully showeth that:
There is a growing interest and concern in all sections of Australian society for the conservation of the environment, natural and man-made.
That there are also rapidly growing pressures by powerful forces tending towards the destruction of the Australian heritage.
That it is therefore urgent to appoint the Australian Heritage Commission, which was approved by both sides of this Parliament and to give the Commission sufficient independent staff, resources and funds.
That Technical Assistance Grants and Administrative Support Grants to community organizations are needed to partially redress the gross imbalance in technical expertise and resources suffered by community groups in pressing the community ‘s case against the exploiter.
That a proper balance between the Governments programme of public austerity and the need for action in conservation would be a modest increase in the budget allocations in these areas over that of 1 975-76.
And your petitioners as in duty bound will ever pray. by Mr Moore.
Similar petitions were lodged by Mr Lionel Bowen, Mr Garland and Mr McLean.
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:
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.
To the Speaker and the Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned students and staff of the State Colleges of Victoria respectfully showeth:
That the Immigration of teachers recruited from outside Australia be prevented while students with similiar University qualifications are refused entry into Diploma of Education courses, and school leavers are refused entry into the State Colleges of Victoria.
Your petitioners therefore humbly pray that that Minister for Immigration, Mr MacKellar will carry out this petition.
And your petitioners as in duty bound will ever pray. by Mr Scholes.
-My question, which is addressed to the Minister for Health, refers to the mangling of Medibank. Will staff currently employed by the Health Insurance Commission have to remain at present levels, or more probably increase, to cope with the administrative burdens of recording each person’s health insurance status, administering a cumbersome premium scheme and running both the present and proposed arrangements until the end of the year? Will the private funds have to increase staff to cope with their increased work load? Will the Department of Health have to administer some of the new scheme? As these are probabilities, how can the Government claim to be making savings -
– Order! The honourable member is being argumentative. He may seek information in his question and may do so forthwith.
-How then can the Government claim to be making savings on the new Medibank arrangements?
-The modified Medibank proposals do not come into force until 1 October. We will not know what adjustments need to be made until it has been in operation for a period. If there are to be any reductions in the staff of the Health Insurance Commission appropriate steps will be taken to ensure that nobody is unduly harmed.
– Has the Prime Minister seen reports that some left wing unions intend to mount a series of rolling strikes against the Government because of the changes to Medibank? Can he see any justification for this line of action and what is his reaction to it?
– I have seen reports concerning this matter in today’s Press. I would have thought that there would not be much chance of a great deal of support being gained for this purpose. The Government’s proposals maintain the universality of Medibank, they maintain the principle of no means test and they confirm our principle of providing a degree of choice for as many people as possible right throughout the income scales. In addition, other proposals that are involved in these matters which the Minister mentioned in his statement and in a Press release he issued, make it quite plain that we wanted to establish circumstances where the general level of taxpayers would be providing a lesser subsidy to those who wish to insure themselves for intermediate or private ward treatment. One of the odd things I find is that some people are trying to support the view that the general run of taxpayers and levy payers under Medibank should be providing additional support to those who wish to insure for intermediate or private ward treatment. If that is the platform from which some left wing unions would seek to muster a cause I would hardly think it is a popular one with their own members.
-My question is directed to the Minister for Health. Will the Government’s Medibank proposals reintroduce a 2 -class system of health care in Australia, whereby those above a certain income level will be forced into private health insurance schemes and the remainder left in Medibank? Will not the stigma attached to public ward patients re-emerge and will these people now find that they are forced back into second class status by this new hidden means test?
– Let me reply, firstly, by saying: ‘Rubbish!’ Under the proposed scheme there will be no means test at the point of service. There will be no division. No Australian person will be forced out of Medibank. Even the highest income earner in Australia can take out a $300 a year package to cover himself and his family, and a single person can take out a $150 a year package. It is not designed to and it will not cause the divisions that the Australian Labor Party would like to see created in this community. What it does, firstly, is provide the widest ranging choice that any health scheme has ever offered the Australian people and, secondly, it identifies the charges for health care in this country. Nobody has a free meal in this country. What is more, so much has been said about a free health scheme that never existed. The taxpayers in this country have been paying for it. Those in the higher income levels will be paying closer to the cost of their health care under this proposal. Pensioners and people on the lowest incomes will be getting their health care free to them at the point of service.
– I direct my question to the Minister for Health. Will all income earners be worse off in Queensland under the recently announced proposals in regard to Medibank than they were prior to the advent of the Labor Party’s Medibank when medical and hospital care in Queensland was provided free to all Queenslanders by the Bjelke-Petersen Government, free of a means test? (Opposition members interjecting).
– Do Opposition members want me to repeat the name Bjelke-Petersen? Will public hospital patients and outpatients attending Queensland hospitals be able to attend these institutions under the new proposals free of any charge to themselves personally or to Medibank or to private insurance organisations? Will the cost of x-rays and pathology tests and costs of running mental hospitals be included in the new Medibank proposals? Do the proposals as announced require the approval of all State governments?
– Queenslanders will enjoy the same wide ranging choices of the type of health cover that all other Australians will obtain. We are not discriminating against the Queenslanders. All Medibank patients in Queensland will, under the new proposals, have access to medical’ and standard accommodation at no cost to themselves at the point of service. Those dependent on pensions and the lowest income earners will pay no levy for those services, and those on the higher incomes will have the choice of remaining in Medibank or taking out private insurance for themselves for intermediate or private ward accommodation with doctors of their choice. It is true that Queensland has had a free hospital scheme for inpatients and outpatients for some years but, as I said earlier, nothing is really free. The free hospital system in Queensland was brought in some years ago because Queensland gave that form of service a higher priority than, say, rail freights which have been very high in Queensland. But it is the people who pay for the so-called free service.
There will be no means test at the point of service. For those who are privately insured the Queensland Government will have the right to charge against the insurance fund the costs of accommodation in the hospital for x-rays and other hospital services. All public and private hospitals will continue to receive $16 a day as a subsidy towards the bed patient. The State mental hospitals are a matter of concern to the States and indeed for that matter to the Commonwealth Government. The Government will be discussing these and other possible changes to the heads of agreement with the State Ministers in the very near future.
– Has the Prime Minister seen the statement by the New South Wales Minister for Health, Mr Stewart, describing the Commonwealth Government’s proposal to increase intermediate and private ward charges as ‘bushranger tactics’ that New South Wales would not go along with? Is there any validity in these charges? What would be the impact of a refusal by New South Wales to go along with the increases?
-If the New South Wales Government refused to enter into negotiations and to come to some agreement along the lines that were suggested in a letter from myself to all Premiers last week the result would be that the New South Wales Government would be putting itself in a position of wanting to offer larger subsidies to the better off in the Australian community and to those who wished to insure for intermediate and private ward treatment. If that is the order of priority of the new New South Wales Government then so be it. But it is this Government’s view that those who wish to insure for intermediate or private ward treatment should carry the major part of that responsibility themselves. The general level of taxpayers and those who pay the levy under Medibank should not be required to contribute substantial additional subsidies for that purpose.
In New South Wales, as has been the case in other States, as a result of the introduction of Medibank, treatment in intermediate wards is being charged at $20 a day and treatment in private wards at $30 a day. The proposal for discussion with Premiers- it was not put in any dogmatic sense, but was one for discussion- was that these charges ought to be increased to $40 and $60 a day respectively. It is worth noting that in New South Wales, before the introduction of Medibank, the charge for an intermediate ward bed was $4 a day more than the charge we are now proposing; it was $44 a day. The suggestion that the quite unrealistic charge of $20 a day for an intermediate ward bed in a public hospital ought to be maintained is itself utterly unrealistic. The real cost is $90 to $ 100 in the major capital city hospitals. This, as I say, results in a situation where the New South Wales Government is in fact suggesting that the taxpayers generally should be subsidising people who wish to insure for intermediate or private ward beds to a much greater extent than would be the case under the proposals of the present Government.
From Mr Stewart’s learned statement it would appear that there are other consequences of the New South Wales position. The position of private hospitals would be made more difficult. To some degree the insurance rate might be lower, but an additional burden would be put on standard ward beds and on public hospitals generally. Again, that would come back to the taxpayer, who would have to foot the bill. So if Mr Stewart is putting a point of view that he wants to put an additional charge on taxpayers he is going the right way about it. This is an odd circumstance, since already the Premier of New South Wales, Mr Wran, seems to have come to the understanding that it is beyond his capacity to pay for his election promises.
– I direct my question to the Minister for Health. What are the privacy implications of the continuous transfer of information between private health funds and Medibank and between the Taxation Office and the Health Insurance Commission, made necessary by the new 2-class universal system of health care?
-That is a very good question. I shall give a detailed answer to it later. The Taxation Office never reveals information. We have referred a Bill relating to privacy to the Law Reform Commission. One of the terms of reference of the Commission is to examine ways and means of ensuring that the privacy of individuals is preserved. We will be studying measures that need to be taken to protect the privacy of individuals.
– I direct my question to the Treasurer. Will the honourable gentleman advise the House the background calculations used to arrive at the figure of just over $l,000m as the estimated cost of indexation in 1976-77? In forming the estimate, what was the projected gross growth in incomes in 1976-77? Will the Treasurer also state the most realistic estimate available for the rate of inflation in 1 976-77?
– The honourable gentleman is now assuming a position of pristine purity in Opposition because never, as I recall during my period in the House, did his Party when in Government release the forward estimates which he is now seeking. I can say to the honourable gentleman that the figures which have been put down have been carefully checked and assessed. So far as the information he seeks is concerned, he will learn that when I bring down the first Budget.
-My question is directed to the Treasurer. Has the honourable gentleman received a confidential report from the Treasury stating that under the new arrangements he announced last Thursday night some 57 per cent of taxpayers would be worse off?
– I have seen several Press reports that do assert that 57 per cent of taxpayers in fact will be worse off. The figure is wrong and its use in the articles concerned has created a quite misleading impression. It must be remembered that the Medibank levy applies not over the full year but over three-quarters of the year, and the net gain to taxpayers will be clear from a series of tables which I have had prepared. I seek leave to have those tables incorporated in Hansard for the information of honourable gentlemen
-Is leave granted? There being no objection, leave is granted. ( Tables read as follows)-
– I direct my question to the Acting Minister for Environment, Housing and Community Development. Is it a fact that the Government intends to initiate action which will result in an appreciable increase in the rents on housing commission homes, and will also result in the interest rate covered by the CommonwealthState Housing Agreement being increased from 4 per cent to the long term bond rate?
– There was a meeting of State Ministers for Housing and myself in Parliament House yesterday at which the question of this agreement was raised. The Commonwealth commitment to the States in relation to housing will be made clear by the Prime Minister at the Premiers Conference which is to be held, I believe, on 9 and 10 June. The housing Ministers Conference agreed that a meeting of officials should be held hopefully the week after the Premiers Conference, and that shortly following that there would be another meeting of housing Ministers to discuss details.
– I address my question to the Minister for Health. Is the Minister aware that nearly 400 ships enter the port of Gladstone in
Queensland each year and yet the quarantine services operate only on a 9 a.m. to 5 p.m. basis, 5 days a week? Does this mean that neither ships nor their crews arriving, for example, after 5 p.m. on Friday are checked by quarantine officers till 9 a.m. on Monday? Does the Minister agree that this situation poses a serious threat of the introduction of foreign diseases, both human and animal to Australia? Will the Minister take urgent action to remedy this?
– I have seen reports such as those mentioned by the honourable member for Capricornia. My answer to his first question is categorically no. Ships which have a berth to go to are cleared by quarantine and customs officials on arrival at the berth, 7 days a week, 24 hours a day. Ships which do not have a berth to go to anchor in the bay approximately 3 miles off-shore and are cleared as soon as possible by quarantine and customs officials during normal working hours even though they may not be brought to berth for some days. No ships ‘s personnel or passengers are permitted ashore until customs and quarantine clearances have been granted. I have checked with my department and I am assured that this requirement is rigorously enforced by the customs officers and officers of my department at Gladstone. There is no record of this requirement having been contravened.
– Have it incorporated in Hansard.
– I am sorry that the honourable member is not interested, but other honourable members may be interested. The suggestion that crews are free to go ashore before clearance is completely without foundation. I am sure that the honourable member for Capricornia will be pleased to be able to convey that information to the people in his electorate who are very concerned about the possible introduction of diseases into this country that could affect both the human and the animal populations.
- Mr Speaker, I take a point of order. I require the Minister to table the documents from which he was quoting in answer to the question.
– Did the Minister read from a document?
– It is a confidential document.
-Did the Minister read from the document?
-Is it a confidential document? Mr Hunt-It is.
– The Minister is not required to table it.
– My question is addressed to the Prime Minister. I ask: Does the Public Service regulation governing transport home by taxi after overtime duties for female personnel still apply? If so, can he tell me why a resident of my electorate who is employed in the Melbourne office of a Federal Government department would be denied the safety of a taxi home after working until 9.30 p.m.? Can the Prime Minister assure me that proper measures will be taken to ensure the continued safety of female personnel travelling home after completion of overtime work?
– It would be much better if the honourable gentleman would make representations mentioning the name of the person and the circumstances involved so that a proper examination could be made. I do not believe that it is proper to canvass individual circumstances at question time. The honourable gentleman has not mentioned the person ‘s name. I can assure him that if the full details are provided the examination will be pursued.
-My question is directed to the Treasurer. I am sure that all honourable members are glad to see him looking so well and in such sparkling form again. I ask: Has the Treasurer seen recent Press reports that a number of trade union leaders are intending to undertake industrial action as a protest against the changes which he announced to Medibank? Is the Treasurer concerned about these threats and can he give the House any indication as to their basis?
– I have seen Press reports indicating that certain unions are apparently intent on taking upon themselves the process of industrial action against the changes which I announced in my economic statement in this House last Thursday. I believe that the union leaders have demonstrated what can be described only as a completely irresponsible and politically motivated attitude. I remind the House, as my colleagues the Prime Minister and the Minister for Health have done so well today, that the changes to Medibank retain the principle of universality, protect the position of low income earners and widen the field of choice available in the area of health care. Because the levy is linked to taxable income, those on the lowest incomes, of course, will pay no levy and those on moderate incomes will pay the levy only in accordance with their means although income earners remain entitled to all the benefits of Medibank- that is, treatment and accommodation in public hospitals by doctors engaged by the hospitals and benefits at the present level for medical expenses incurred outside hospitals. In short, as has been emphasised today, the arrangements made by the Government provide a measure of social justice whilst at the same time introducing a much needed area of financial responsibility. One fact remains, as my colleague the Minister for Health has made clear, and that is that Medibank must be paid for one way or another.
- Mr Speaker, with the leave of the House I should like to take the opportunity to add to the response I gave a few moments ago to a question asked by the Deputy Leader of the Opposition. The Deputy Leader, I think, was asking for information both in the forward sense and in the retrospective sense. When I was sitting down I recalled that the Deputy Leader did ask me on what rate of inflation was the cost of tax indexation estimated at approximately $1,1 00m. That of course, as the honourable gentleman should be aware if he reads the statement made on Thursday last, is a retrospective calculation which goes from March of this year back to March of the previous year. The figure is 13 per cent and it does make allowance for indirect taxation.
-I ask a question of the Treasurer. Is it correct as reported by apparently expert analysts that the main purpose of the policy of the Government is to force down real wages so that the economic recovery that the Government wants can take place? If so, by how much does the Treasurer think real wages will be forced down during the course of the next 12 months?
– The proposition that we have been putting in this House and before the Conciliation and Arbitration Commission is that if there is to be a reduction in the overall rate of inflation this year then that reduction must take place with the acceptance by all members of the Australian community of restraint in the wage and salary area. That has been made perfectly clear. The honourable member is well aware of the need for greater productivity out of which there can come increasing shares both to capital and labour. He is also aware of the need to unlock the savings ratio which has been far too high in recent years. I would say to the honourable member that, far from the inference that he has made in his question, the real objective of this Government is to put value back into the wages which people are now receiving. Too many members of the work force of this country, unfortunately for the honourable member, are now appreciating the absolute folly of wage increases which to them and their families have become illusory as the process of inflation induced by the honourable member and his colleagues has continued unchecked in recent years.
– I direct a question to the Prime Minister. Is he aware that the previous Government undertook to direct Government departments and instrumentalities to use only Australian produced paper? Does he agree that whilst this policy has been carried out by the Government Printer it does not appear to have been followed by many sub-contract printers, nor by such instrumentalities as Trans.Australian Airlines, Qantas Airways Ltd, the Australian National Line and the Australian Broadcasting Commission? TAA printed its last annual report on paper made in Wales and the ANL report was printed on Japanese paper. This has taken place at a time when Australia’s paper production workers -
-Order! The honourable member may not give any more information.
-I will proceed immediately to the question. I ask the Prime Minister: Can the Government see the need to redirect all departments, instrumentalities and sub-contractors to use only Australian paper? If the answer is in the affirmative, will the Government issue such directions as a matter of urgency?
-The honourable member has been assiduous in pressing the needs of his own electorate and his own State on these matters and I welcome his bringing these matters to the attention of the House. The Government does confirm the instruction that has been issued in relation to its own departments. That instruction will be reinforced. I will also ask my colleague, the Minister for Administrative Services, to approach Government instrumentalities of the kind the honourable member has mentioned to ascertain whether they can exhibit a greater degree of ‘buy Australian’ in the matter of printing reports and using paper.
– Will the Minister for the Capital Territory indicate whether he is considering the imposition of a nominated corporation on the people of the Australian Capital Territory to administer the City of Canberra? Is he about to relegate the so-called Legislative Assembly, which has been elected by the people of Canberra, to the role of an advisory body to the nominated corporation, which will then be free to inflict harsh and irresponsible decisions on the people of Canberra in the same way as the Government did in last week’s mini-Budget?
– Press reports about these matters are inaccurate. The Government will soon be considering the question of some form of local authority for the Australian Capital Territory Legislative Assembly. Until the Government has done so I have nothing to add.
– I address a question to the Minister for Repatriation. Not having had an opportunity to study completely the new Medibank system, I ask: Will repatriation pensioners be disadvantaged in any way under the new system?
– I thank the honourable member for Herbert for his question. He is well known for his deep interest in ex-service matters. When the Government decided on its Medibank plan it made special provision for those people who are beneficiaries under the Repatriation Act. That is to say that where a veteran is in receipt of full medical care by the Department of Repatriation -
– Full medical treatment? Will you repeat that? Full?
– Can the honourable member not hear? Yes, full. That includes war widows, people on 100 per cent general rates and so on. These veterans, if they are single, will not have to pay the Medibank levy. Those who have dependants will pay 50 per cent of the Medibank levy. I can assure the honourable member for Herbert that in this way veterans are fully protected from the Medibank levy that has just been introduced.
-I direct my question to the Minister for Immigration. By way of background I refer to the problems in Beirut. Is it a fact that the Minister has altered the classification of those people eligible to come here from Beirut and Lebanon since 7 April? If so, what alterations have taken place? Will the Minister be good enough to tell those people previously denied entry into Australia that they may now reapply?
– I am not sure of the date of the latest instructions in relation to the entry criteria for people coming out of Lebanon and seeking to come to Australia. However, I am able to tell the honourable member that the normal entry criteria for people who have managed to escape from the situation in Lebanon and who have made application to come to Australia at one of the Australian posts surrounding that area of the world have been relaxed to the extent that the utmost priority is given to what are known as category A applicants that is dependent parents, husbands, wives and dependent children. Special attention is given to those applicants who meet the normal migration criteria and additionally those people who have some special relationship with residents of Australia and who have their own special compassionate circumstances. Their applications are received and sent to Canberra for assessment. In this way a number of people in the third category of compassionate circumstances have already entered Australia. Special instructions have been given to members of my Department both in and outside Australia to treat every application with the utmost compassion and attention. We have strengthened our representation in the posts in Nicosia. With the very kind co-operation of the Netherlands Government we have put an officer into Damascus, operating from the Netherlands Embassy there.
In all ways we have endeavoured to help those people who have left the Lebanon and who have sought to come to Australia. Obviously we cannot accept everyone who wishes to come here but we are making special arrangements particularly in respect of category A people. Even if they do not have passports, for instance, we are accepting identity documents and we are carrying out health checks after the people arrive in Australia. We are keeping a very close watch on the situation there. Everyone on both sides of the House, I am quite certain, has the utmost sympathy for those people whose lives have been devastated by the internal situation which at present obtains in the Lebanon. The Government has made special efforts to assist as much as possible. I am keeping in very close contact with the leaders of the Lebanese community in Australia. In fact they have recently commended the Government for the actions it has taken. We will continue to keep a very close eye on the situation and to assist wherever we can.
-I ask the Minister for Health: Is there a very serious shortage of influenza vaccine throughout Australia? Is this shortage very severe in the city of Maitland, the fifth largest city in New South Wales? Can the Minister inform the House of the position with regard to the supply of flu vaccine? When is it likely to become readily available?
– I understand from the representations of the honourable member for Paterson that there is a shortage of influenza vaccine in the city of Maitland. Certainly there has been a shortage in quite a number of regional areas. In defence of the Commonwealth Serum Laboratories I have to say that CSL was the first laboratory in the world to develop the vaccine. By the end of June it will have produced, by its employees working 7 days a week, not less than 2 million doses of A Victoria influenza vaccine. I think there is it something of a panic in the communitygenerated by the media to some extent and by people who have been concernedbecause of an assertion of another influenza outbreak in the United States of America called Swine influenza. The outbreak was contained in a place in New Jersey where there were 18 cases. Two patients died. No such cases have since been reported yet the United States Administration has embarked upon a complete national vaccination program.
At the present time in Australia, as a result of the recommendations of the National Health and Medical Research Council, we are limiting availability of the vaccine on the medical benefits list to children under 5 years of age, to pensioners and to people with chronic respiratory and cardiac diseases. We estimate that there are about half a million of these people in Australia. The CSL has produced 1.186 million doses of this vaccine to date. I have been in touch with representatives of the Laboratories who have assured me that they have dispatched to wholesalers in each of the States the appropriate amount which is worked out according to a ratio of the number of applications in each State divided by the number of doses available overall. The wholesalers have a responsibility to ensure that the vaccine is fairly distributed throughout each of the States. We have, of course, been in touch with as many people as possible to ensure that there is a fair distribution. Whilst there was a greater panic two or three weeks ago, I sense that supplies are getting through on a better scale in the last week or two and that people are recognising that there is not the same great threat from this influenza strain as was at first thought.
-My question to the Minister for Immigration and Ethnic Affairs also concerns Lebanese coming to Australia. I notice that last Thursday he provided an answer in the Senate to a question concerning the number of persons who applied, were approved, and were rejected for entry into Australia last December, January and February by country of origin. Although 40 countries were listed, Lebanon was not. I therefore ask the Minister: Is it a fact that no persons applied for entry into Australia from Lebanon last December, January or February?
-Of course people applied to come to Australia from the Lebanon in those periods. The reason that the statistics are not included is that the Australian immigration officers in the Lebanon, in Beirut at that stage, were working under extreme difficulties. Both the locally engaged staff and the Australian officers were in some physical danger. We decided at that stage that we should give emphasis to those applicants in category A, the category that I have already mentioned. The staff numbers were down and rather than spend time compiling the usual statistics we used the time to process as quickly as we could, given the limited staff available, the applications from those people with the highest priority.
-Can the Minister for Foreign Affairs tell us the exact task and role of the Commonwealth Police unit at present serving on the island of Cyprus? We sometimes take these people for granted. Can he tell us what is their role, how many are there and what they are achieving on our behalf in Cyprus?
-I will supply the honourable gentleman with the precise details as to numbers. The Government continues previous government policies of endorsing peacekeeping efforts through the United Nations. I think it is fair to say that this is one of those bipartisan issues. We have frequently commended the contribution that the Australian police have made toward that peacekeeping effort. This Government applauds their role. The previous Government gave its support. As I said at the outset of the answer, I shall supply the honourable member with the precise numbers in Cyprus at present.
-Has the attention of the Prime Minister been drawn to an article in this week’s National Times entitled: ‘Fraser Makes States Sob- With Good Reason’ by John Edwards? Is it correct, as the article states, that under the new federalism arrangements the States will receive about $120m less than they received under the pre-Fraser formula and as a result, under the April agreement the States automatically revert to the old formula?
– I am afraid I have to confess that I have not read the National Times of last weekend, or of any weekends for some months before that.
– My question is for the Treasurer. Since the Government proposes in its first Budget to make pensions paid to all persons below age pension age subject to taxation, why are not the greatly increased child endowment payments also subject to tax?
– The decision to tax service pensions, widows’ pensions, supporting mothers’ benefits and unemployment and sickness benefits will affect only those people whose incomes are pushed above the minimum taxation threshold. The honourable gentleman will recall that in the statement I made last Thursday I drew a specific reference to the anomaly which exists in this area and which the Government believed required correction. So far as the major point of the honourable gentleman’s question is concerned, that is to say the family allowances and the major increase in child endowment, if I may say so, Mr Speaker, that is one of the most significant measures of social welfare introduced in this country by any government. It is a major move in social equity. It is a move in favour of the independence of women. I believe that it will greatly assist families, particularly those in the poorer financial brackets, and as I think I said in the statement, it will directly have a very advantageous impact upon the 300 000 poor families with some 800 000 children. Because of the importance of the advance made in relation to social equity, the Government was not of a mind to qualify the significance of it by subjecting the new allowance to taxation.
– My question is directed to the Minister for Repatriation and is supplementary to that asked of him by the honourable member for Herbert. Is it not a fact that exservice members with accepted war caused disabilities as distinct from full medical entitlement will no longer be eligible for free medical treatment from their local medical officer but will have to pay a Medibank levy? Is it not a fact that they have been eligible for this treatment ever since the war? Is this not a breach of contract which would never be accepted under obligations incurred under workers compensation legislation? How many ex-service members have such accepted disabilities and what is the total saving to the Government?
– I repeat what I said to the honourable member for Herbert, that is, that a man or woman who is in receipt of full medical treatment from the Repatriation Department will receive a full Medibank levy exemption and a man who has a wife or family will receive a 50 per cent exemption. I was not trying to obscure the fact that a man who is in receipt of free medical treatment for a disability will have to pay the Medibank levy. The honourable member for Prospect is correct; he will have to pay the Medibank levy. But that has always been the case. The Repatriation Department accepts the fact that it will give medical treatment in hospital for a disability or pay a member’s local medical officer for treatment for that disability. The Repatriation Department never accepted the responsibility for all other treatment outside the area of that disability. As for the information about numbers that the honourable member sought, I do not have it in my head, but I will willingly give it to the honourable member as soon as I can muster it. When the Government looked at the operations of the Repatriation Department and decided on administrative economies it had one thing uppermost in its mind, that is, that the same high standards of benefits and the same high standards of medical treatment would be continued. The result of those administrative economies has meant one thing, that is, that those high standards have been maintained and no veteran- man or woman- has been disadvantaged.
– For the information of honourable members, I present the report of the Australian National Advisory Committee for International Women’s Year.
– Pursuant to section 15 of the
Dairy Produce Act 1975, I present the annual report of the Dairy Produce Board for the year ended 30 June 1975.
– Pursuant to section 13 of the Meat Export Charge Collection Act 1973, I present the annual reports on the operation of that Act for the years ended 30 June 1974 and 30 June 1975.
– Pursuant to section 90 of the Wool Industry Act 1972-1974, I present the annual report of the Australian Wool Corporation for the year ended 30 June 1975. The interim report of the Corporation for 1974-75 was tabled in the Parliament on 2 March of this year.
– For the information of honourable members, I present the report of the Industries Assistance Commission on other electronic equipment.
– For the information of honourable members, I present the report of the Temporary Assistance Authority on files and rasps.
– Pursuant to section 10 of the States Grants (Schools) Act 1972-1976, I present the report on financial assistance granted to each State under the terms of that Act during the financial year 1974-75.
Mr Speaker, I would like to make a personal explanation.
-Does the Minister claim to have been misrepresented?
-Yes, I do. In the Sydney Morning Herald of Friday 2 1 May, in part of a report on social welfare cuts, I was reported as saying that veterans would not get pension and allowance rate increases through the 6-monthly consumer price index movements. That is totally opposed to what I said. The Government policy is that pensions paid to repatriation beneficiaries will be increased every 6 months in line with consumer price index increases. That is what I told the reporter.
-I seek leave to make a personal explanation.
– Does the honourable member claim to have been misrepresented?
-Yes, I was misrepresented. In The National Times of 24 May 1976 the following passage appeared:
The enthusiasm for tax indexation among Liberal Ministers seems to be a fairly recent phenomenon: in fact it’s less than a year old.
As recently as June last year, the Liberal MP W. C. Wentworth argued strongly for tax indexation in the party room.
A succession of speakers then argued against it . . .
My advocacy in the Party room was not in June of last year, as the article states, but in September 1974. At page 2080 of Hansard, in October 1974, honourable members will find that I did advocate almost virtually the same scheme as the Government has now brought forward. Furthermore, some months previously, on Federal File, when speaking with the honourable member for Hindmarsh (Mr Clyde Cameron), I advocated tax indexation. I think that that was the first time that that had happened publicly in Australia. My only supporter at that time, as I recall it, was the honourable member for Lilley (Mr Kevin Cairns). The fact that I now have distinguished converts, Mr Hawke and the Prime Minister (Mr Malcolm Fraser), confirms my strong belief that I was right then and am right now.
by leave- There has been a significant run-down in the defence capability of Australia in the last 3 years. This has not been the fault of the Service Chiefs or of the defence advisers to the country. The fault is to be properly laid at the feet of the Labor Government. Defence preparedness under Labor was given a low priority. Apathy to defence problems was a distinguishing feature of the Labor Administration. For the nation the consequences have been hazardous. Nothing in history encourages the view that a country can secure protection by being casual about its responsibilities. That lesson, Labor ignored. It is one this Government will respect.
The consequences of Labor neglect have been at once widespread and grievous. Forward planning for new equipment did not receive the support it plainly needed. Training activities were heavily restricted. Financial restraint was no longer an expression of discipline. It became a symbol of lack of interest. The effects were not to be disguised. The operational capability of our Services was diminished. So was the morale of those who served.
On assuming office the Government resolved that the state of affairs with respect to the nation’s defences would not be tolerated. The Government is firmly determined to ensure that defence planning and preparedness are restored to their proper role. I am authorised by the Prime Minister (Mr Malcolm Fraser) to say it is his expectation that he will, in the present session, make a statement to Parliament which sets out the Government’s broad attitude to the world environment in which this country must shape its policies and its relations with other countries. Meanwhile, I may observe that the singular feature about contemporary Australia is that it is passing through a fundamental period of transition with respect to its defence obligations. It would be absurd to pretend that those obligations are declining- that there is a spreading of some imaginary benevolence. Our world is not one ‘of peace and tranquility; it is exposed to a great array of aggressive forces; it is daily becoming more acquainted with the elements of violence and cruelty. We will share our responsibilities with our major allies. That is a proud attribute of nationhood. We accept, however, that we will take the prime responsibility for our own defence- the defence of Australia and its national interests.
It is against that background that I inform the House that the Government has decided to embark on a defence program which will involve the expenditure in real terms of more than $ 12,000m in the next 5-year period and the acquisition will create additional financial commitments carried forward into the later 1980s. The Government reached its view that an expenditure of $ 12,000m is needed to give the country a credible defence capacity after receiving reports from its advisers, These reports detailed our present military capabilities, their limitations, and the extent to which they need to be developed or varied as we move from the 1970s into the 1980s.
On the advice available to it, and corresponding with the long lead times for major equipment and construction, the Government has concluded that the greater portion of the sum to which I have referred should be spent in the last 3 years of the 5-year defence program. This is not to mean that growth of expenditure in the first 2 years will be insignificant, despite the need for restraint as part of the Government’s overall financial strategy. On the contrary, there will be sizable increases in real terms in the amounts spent in these 2 years over those for the current year under Labor’s budget. In particular, for the forthcoming year 1976-77 there will be an increase in real terms of between 5 per cent and 6 per cent over spending in 1975-76. In terms of the Budget next August this will mean a Budget provision for defence in the region of $300m above the expenditure approaching $ 1,900m expected to be incurred in 1975-76.
There will be an immediate increase in the level of Service activities. This will allow increased fleet steaming time, including greater participation in exercises. Flying hours for all Services will be increased. Training activities in all Services will be stepped up permitting higher standards to be achieved and the development and practice of techniques of combat, command, control and logistic support. The Government’s defence advisers are deeply involved in determining what priorities and what options should be included by the Government within the 5-year defence program with respect to equipment, manpower and facilities in the present state of technology and on the present outlook.
Precise advice on types and quantities of equipment will be provided as the correct year of decision approaches, in the light of military needs and taking advantage of latest technological information and contractual opportunities. There will be no premature decisions. Modern defence involves very complex and expensive technologies. It is not enough to have a firm resolution to defend. There must exist the technical capacity to do so. Moreover, access to modern defence equipment involves very long lead times in securing that equipment.
In the last 6 months I have approved a number of equipment acquisitions for the Australian Services including the purchase of the British Rapier surface-to-air guided missile system, the ordering of additional Leopard tanks from the Federal Republic of Germany, the selection of the landrover as the replacement vehicle for Army’s light truck fleet, and air defence radar control and reporting facilities for the Royal Australian Air Force. In addition I expect to be able to announce very shortly the successful contractors to undertake project definition studies for the new class of patrol boat to be acquired for the Royal Australian Navy. These craft will supplement and in due course replace the existing Attack class.
Arrangements are being made for Australian industry participation in all of these proposed acquisitions. It has long been accepted that the defence preparedness of Australia will include the availability of strong and competent industrial support for defence needs. However, it is some years since a complete study has been carried out of the capability of Australian industry to provide the industrial back-up required by the Australian Services now and in contingent circumstances.
Consequently, I have requested that the Defence (Industrial) Committee report on the ability of Australian industry to provide industrial support for the Services with emphasis on the support of equipment, production of consumable and minor capital items and the ability to cope with an intensification and diversification of this activity. This important review was launched yesterday. The Defence (Industrial) Committee is chaired by Sir Ian McLennan and has as members senior industrialists and top level Service and civilian staff from my Department. For the purpose of this study the Defence (Industrial) Committee has been augmented for the period of the study by the appointment of a number of industrialists who are leaders in their field. I record the thanks of the Government and of the country for the work they have already done and are in prospect of doing.
The Government intends that increased provision be made for the development of defence infrastructure, including the modernisation of naval dockyards, improvements in airfields and related support facilities, and in accommodation and educational and training facilities. The Government has already decided to accelerate the rate of construction of works at HMAS Stirling, Cockburn Sound, Western Australia, in order to facilitate commissioning of that establishment in 1978. 1 expect soon to announce what further works are necessary in order to increase the defence capability of this important naval base.
I have stated the Government’s intention to produce a White Paper on defence. That undertaking is repeated. The White Paper will be available for parliamentary debate and public discussion during the Budget session this year. By that time considered advice on the equipment, manpower and fixed defence facilities in Australia, contemplated for decision during the 5-year program period, will be ready for Government consideration and incorporation, as appropriate, in the White Paper. At a time when the nation faces serious economic difficulties, a decision to spend substantial sums of money on defence in the next 5 years does not make the resolution of those difficulties any easier. The Government freely acknowledges that fact. It accepts, however, that the first obligation which falls upon Government is to ensure the safety of the country and its people. I present the following paper:
Defence-Ministerial Statement, 25 May 1976.
Motion (by Mr Sinclair) proposed:
That the House take note of the paper.
-The statement just made by the Minister for Defence (Mr Killen) is a non-statement. There is almost nothing new in what the Minister has just said to the House. The Minister accuses the previous Government of neglecting defence, of allowing it to run down, but he offers no evidence of that because there is none. He proudly announces equipment purchases as if they were new, as if he were responsible. Every piece of equipment he mentions was ordered, or its ordering foreshadowed, by Labor. Labor ordered or foreshadowed the ordering of 2 Perry class frigates, 87 Leopard tanks, 8 P-3C maritime patrol aircraft, 2000 trucks for the Army, HMAS Tobruk the logistic landing ship, the Rapier surface to air missile, 1 1 radars for the Royal Australian Navy and the Royal Australian Air Force, and a new class of patrol boat.
The Minister says that he plans to complete Cockburn Sound in 1978. So did the last Government. He claims that training activities were restricted under Labor. The 1975-76 Budget provides $262m for training- $70m for the Navy, $1 16m for the Army, $74m for the Air Force. Almost 14 per cent of the defence vote went to training. The fact is that the total of $ 12,000m to be spent on defence over the next 5 years does not represent any change in defence policy. It carries on with the sound decisions related to long term defence preparations initiated by Mr Barnard as Minister for Defence in the first and second Labor Governments, and developed subsequently by Mr Morrison as Minister for Defence. That amount of money includes the great cost of 2 patrol frigates ordered by the Labor Government- or at least the ordering was foreshadowed- at a cost of more than $330m. The McMahon Government made no proposal at all to undertake the ordering of those frigates. It was the Labor Government which took steps to order 87 Leopard tanks. The Labor Government initiated action to consider a fighter replacement, and the former Minister for Defence spelled out the details of that consideration on more than one occasion. His views are on public record. He indicated at least once that the cost would probably be in excess of $500m.
The $ 12,000m to be spent over the next 5 years also covers the additional cost of manpower as the strength of the Army rises. The Labor Government put a ceiling of 36 000 personnel on the Army and indicated that we would progressively move towards that objective. On one occasion the present Minister for Defence tentatively suggested a target of 38 000 personnel, but he has retreated from that. On this is no great dissimilarity between what the Labor Government had committed itself to and what the Minister for Defence presumably has in mind.
The Minister for Defence’s statement is certainly simple- very much so. In spite of that, to the extent that it goes anywhere it is sound. It is sound because it confirms the policies formulated during Labor’s term of office. I repeat that it was the Labor Government that initiated action for the purchase of the 2 Perry class frigates. That decision was scorned by the present Minister for Defence when he was in opposition. During 23 years of Liberal-Country Party administration there was no tank replacement and the armoured corps were trapped in obsolete equipment. It was during the Labor Government’s administration that action was taken to replace those obsolete items of equipment. The present Minister for Defence, when in opposition, frequently made fairly inflated claims, garnished as usual with fairly florrid rhetoric, but now he is in government he has an opportunity to deliver the goods. After all, it was he who gave a pretty firm underaking to restore the cadet corps. I remember that in this House on 23 April 1975- more appropriately it could have been said 22 days earlier- the honourable member, with hand on heart, said:
Let me tell the honourable gentleman a simple but very moving story of a young school cadet who wrote to me wanting to know why the cancellation had been made. He asked: Would the Government be prepared to share the cost with us 50-50?’
That was a rather moving moment; more moving that the Minister’s statement in this place on 4 May when he said of this issue, namely the reestablishment of the cadet corps:
This issue has been far more difficult to resolve than was my previous anticipation, and for that 1 should apologise to the House and to the country, but I have not been able to resolve it before now.
He ought to apologise for this statement he has made to the House, because everything he has outlined as a proposed new acquisition, I repeat, was initiated either in terms of a commitment or a foreshadowed commitment by the previous Labor Government. The record of the Labor Government has far better understanding against the previous record of the LiberalCountry Party governments.
Let us look at the period 1967-68 on to 1974-75. The proportion of total defence expenditure devoted to capital equipment and facilities fell from 37 per cent to 13 per cent. That came about because of the neglect of capital equipment ordering during the closing years of the previous Liberal-Country Party Government. The decisions in 1973-74 and 1974-75 started a healthy reversal of that situation. The percentage outlay this year, as the last Minister for Defence in the last Labor Government pointed out, will almost double that of the preceding year. Let us be clear about it; it is no easy task to overhaul that sort of neglect where capital equipment is concerned because there is a problem of lags. First of all, consideration has to be given to the sort of equipment which is required before a decision is undertaken to place an order. Then there is a further lag of varying length according to the nature of the equipment, the source of supply and the standard of its development before it is finally delivered. That is what we were overhauled by- the neglect of previous LiberalCountry Party governments. It was the BarnardMorrison administration of defence that progressively and, comparatively, fairly rapidly sought to reverse that situation.
Let me justify that argument about lags from answers to questions in this Parliament from time to time. For instance, the third DDG destroyer was ordered in 1 963 and not delivered until 1967. The Tracker S2E aircraft ordered in 1965 was not delivered until 1967. The Orions were ordered in 1966 and not delivered until 1968. The Macchi aircraft ordered in 1968 were not delivered until 1971. Then of course there were the 24 Fl 1 Is. They were ordered in 1963 and not delivered until 1973. The Perry class frigates, the FFGs, will be subject to a 4-year delay before they are finally delivered. That is the nature of the lag that overhauled us. The present Minister for Defence is trying to get an easy ride on the momentum which Barnard and Morrison set in motion during their period of* administration.
Let us look at manpower during the period in which we were in government. If there is evidence of neglect it ought to show up here. The reengagement rate for the Navy as at June 1975 was 70 per cent. At June 1970, during the
Liberal-Country Party Administration, the rate had slumped to 36 per cent. The rate for the Army in June 1975 was 74 per cent as against 62 per cent in June 1970. The rate for the Air Force in June 1975 was 82 per cent as against 64 per cent in June 1970. The ratio of officers to other ranks reflected the good shape the armed services were in. In the Army the ratio was 1: 6.5 as against the United States 1: 6.4- a quite favourable comparison- or Canada which was 1: 8.4; or the United Kingdom 1: 8.3. By world standards we had established a very favourable situation. The Army was at its greatest level ever of volunteer personnel at 3 1 500. That is true of the level of volunteer numbers in total for all of the armed services.
Finally, I regret there seems to have been some effort on the .part of the Minister to inject a little emotionalism into this debate because I think that that is the most unhelpful and unhealthy ingredient which could be injected into defence considerations in this country. I believe that not only the community but also the defence services were not well served in previous years when this sort of rampant emotionalism ran wild, when professional patriotism was used to oppress and duress other people. Now the Minister says- I hope that his interpretation is somewhat different from the one which seems to be pretty obvious to me- in his statement:
Our world is not one of peace and tranquility; it is exposed to a great array of aggressive forces; it is daily becoming more acquainted with the elements of violence and cruelty.
That is a fair enough statement as a bland assertion. But what he is aiming at is the creation of a little bit of trembling around the ankles in the community. I ask the Minister a few questions. What does he say to this sort of comment: ‘The contingency of military threat against international lines of communication directly affecting Australia is remote and improbable’? What does he say about this sort of comment: ‘The contingency of military threat by a major power has been found to be remote and improbable”? What does he say about this comment: ‘Major assault against Australia is at present the least conceivable and the most remote of contingencies’?
– There are long lead times.
-I quote from page 5 of the defence report which states: … the prospect of direct strategic pressure against Australian interests by a major power remains remote. A threat, to be real, requires a combination of military capability, motive and opportunity. No regional power has or is likely to acquire for a number of years, the capability that might require a substantial Australian defence response. Given Australia’s friendly relations with regional countries, it would also take years for new circumstances to evolve in which any country came to conceive of major threat to Australia and to find opportunity, and such evolutions would be subject to the constraints afforded by political policy and co-operative regional diplomacy.
I am not suggesting for a minute that there is any room for complacency in the issue of defence; what I am asserting, though, is that mature, balanced, reponsible consideration ought not to be disturbed by emotional inputs. What we need is a calm, alert concern. The frenzy which is engendered by the sort of emotionalism we have seen associated with defence discussion in this community in the past leads too often to the wrong sorts of decisions. What we need is the sort of breathing space we seem to have ahead of us. I take the interjection of the Minister for Defence: There are long lead times, but that does not in any way detract from the point I have been making. What we ought to be doing is using the breathing space ahead of us for mature consideration of the development of a defence doctrine based on the development of answers for our special needs, to confront the sorts of problems that could arise in our near area, problems which might affect this country at some future time. It is especially important that this development takes place in the light of the United States Guam Doctrine of 1 969 of limited commitment.
It is most unfortunate that on the first attempt -and I stress the word ‘attempt’- in a statement on defence the Minister for Defence first of all should have sought to take credit for wearing someone else’s clothes. More importantly I hope that the evidence, as minor as it was, of trying to inject some emotionalism into this debate will not be repeated in the future. I believe that there is room for a very sound defence policy to be developed over the years ahead according to a 5-year program and longer and that this policy be much broader than policies that have been developed in the past. Such a policy can be developed only if there is sensible and restrained discussion, if there is responsibility on the pan of those people who participate in the debate, and most of all, if we in the community are not clobbered by professional patriots who use their professional patriotism as a shield to camouflage their own sluggishness which was the record of previous Liberal-Country Party governments.
Debate (on motion by Mr McLeay) adjourned.
-I have received advice from the Leader of the Opposition that he has nominated Mr Willis to be a member of the Standing Committee on Expenditure to fill the vacancy caused by the resignation of Mr Jacobi.
Message from the Governor-General recommending appropriation for proposed expenditure announced.
Bill presented by Mr Lynch, and read a first time.
– I move:
This Bill, together with the companion Bill, Supply Bill (No. 2) 1976-77, seeks interim appropriations for the services of the Government for the period 1 July 1976 to 30 November 1976, by which date it is expected that the Appropriation Bills for 1976-77 will have been enacted. The amounts sought in the Bills reflect the decisions relating to expenditures referred to in my statement of last Thursday evening and, more generally, the Government’s continuing policy of expenditure restraint.
Supply Bill (No. 1 ), which relates to the ordinary annual services of the Government, seeks interim appropriations totalling approximately $3,412m. This is $720m or 26.8 per cent higher than the amounts provided in Supply Act (No. 1) 1975-76. The major element in’ this higher provision is an additional $495m for Medibank. The balance of $225m is due to higher salary and wage rates ($130m), higher administrative costs ($43.7m- of which the postal and telephone increased tariffs form a significant part) and a further $51m for additional services. Excluding Medibank, and notwithstanding the increases in the other costs, the total supply provisions in the 2 Bills are less than those in the Supply Acts for 1975-76 which were introduced by the former Government. Supply Bill (No. 1) includes $1 10m for the Advance to the Treasurer, compared with $ 120m in 1 975-76.
I need hardly add that Supply Bills, being interim financing measures, do not and cannot anticipate the Budget for the forthcoming year. They are essentially carry-on measures which will be subsumed by the Appropriation Bills when these are enacted. I commend the Bill to honourable members.
Debate (on motion of Mr Hurford) adjourned.
Message from the Governor-General recommending appropriation for proposed expenditure announced.
Bill presented by Mr Lynch, and read a first time.
This Bill seeks interim appropriations for capital works and services, payments to or for the States and certain other services totalling, in all, approximately $8 18.3m, for the period 1 July 1976 through to 30 November 1976. The amount included in the Bill for the Advance to the Treasurer is $100m, compared with $2 10m in 1975-76.
I repeat and emphasise that Supply Bills do not anticipate the forthcoming Budget. They are simply carry-on measures to finance on-going expenditures of the Government until the Appropriation Bills, which will be introduced on Budget night, are enacted. I commend the Bill to honourable members.
Debate (on motion of Mr Hurford) adjourned.
Debate resumed from 20 May, on the following paper presented by Mr Lynch:
Fiscal Policy Decisions- Ministerial Statement, 20 May 1976- and on motion by Mr Sinclair:
That the House take note of the paper.
Motion (by Mr McLeay)- by leave- agreed to:
That so much of the Standing Orders be suspended us would prevent the honourable member for Adelaide speaking for a period not exceeding 95 minutes.
-First of all, let me assure the House that I will in no way take 95 minutes to complete my speech. It is a tradition of the Parliament that the person leading for the Opposition should be given the same time as is given to the Minister making a statement. The explanation of the period of time contained in the motion is that this time was taken by the Treasurer (Mr Lynch) to make his statement last Thursday night.
The Liberal and National Country Party Government is deliberately continuing a policy of high unemployment in order to test an outdated economic theory and to satisfy a false ideology. This is the only objective interpretation of the Treasurer’s statement on fiscal policy decisions which he read to this House last Thursday night. I believe that he and all who follow him should stand condemned for the unnecessary hardships they are causing so many in the Australian community.
The Government’s economic theory in layman’s language goes like this: There are 3 shares of the cake- the householders’ share, which is mainly the wage earners’ share, the share for government and the share for business. The real trouble with our economy is that the business sector has been squeezed too hard, with the consequence that it is not investing. Therefore there is stagnation. The only way to do something about this is to squeeze the other 2 sectors. The best means of doing this is to mutilate the government sector, keep credit tight, create or maintain high levels of unemployment, hope for a resulting compliant trade union movement and then, by submission in national wage cases and by other means, hope for a reduction in real wages. This Government seems to think that by some magical means the result will then be a lowering of inflation and a taking up of the slack by this wizard known as the private sector.
The beauty of this magnificent theory for Liberals and their National Country Party allies is that it also satisfies their conservative ideology. That ideology is that government is bad and to the greatest extent possible must be dismantled. The vast improvements to the lives of so many Australians brought about by the intervention of government in Health schemes, social security programs, welfare housing and so on are ignored. There is so much that is false about this ideology that it is difficulty to know where any comments should begin. However, let me first state a point of agreement. The rate of return in the business sector is too low. In a mixed economy like ours, where the private sector is responsible for the employment of three-quarters of the work force, it is important to encourage firms to invest again. For that investment to be maintained, the rate of return will have to be improved on the profits which are being obtained in many sectors at the present time. If we are to achieve a sizable reduction in the number of our fellow citizens unemployed, and we must achieve this, then investment must be encouraged- so a higher rate of return must be obtained.
But the Australian Labor Party Opposition rejects the notion that a policy of creating unemployment and beating the trade union movement into submission is tenable in this day and age. It is just not workable. It is socially damaging, leaving unhealable scars on our community. It is out of date. The Phillips curve just does not apply now. We cannot trade off higher unemployment for lower inflation and greater investment. The free market economy does not apply, if it ever did. Big and powerful unions are as dominant in the determination of wages as big and powerful corporations are dominant in the determination of prices. It is a new ball game, and we need a government which understands this ball game. We do not have such a government now.
The Australian Labor Opposition believes that we should gently but firmly spend our way out of this present stagflation situation. We believe in the middle way-to quote my friend the honourable member for Oxley (Mr Hayden) in his Budget Speech last August- ‘a line along which we can achieve sound and sustainable growth while at the same time bringing inflation down gradually over perhaps two to three years’. I know that at least one of my colleagues, the honourable member for Port Adelaide (Mr Young), would suggest that the life of a Parliament in these difficult economic times should be 4 years in order to achieve this sort of economic management.
Let us not become hooked on theories which suggest that there is something evil in deficits in themselves. There is not. It depends on the economic circumstances. While there is an underemployment of people and other resources and while the private sector is not taking up the slack with its investment decisions, governments must fill those gaps with public spending. Certainly there must be restraint in that public spending. It cannot be limitless. To the greatest extent it must be in a form that can be turned off as soon as the private sector gets moving. Otherwise we shall ricochet back into the gross demand inflationary situation of 1973 and 1974 inherited by Labor from the McMahon Government. This serious situation had been caused by an under valuation of our currency in 1972 and an over expansive, politically attractive, buying the votes LiberalNational Country Party Budget in that year. Preferably the restrained spending this year should be in productive areas. We need improved public institutions - better mechanics- to bring about this greater public spending in the productive areas. In the meantime there is no reason why we should not be using what we have in the Department of Construction and the Department of Environment, Housing and Community Development to get on with the task of putting into production unused capacity in the building industry of this country.
I do not overestimate the danger of allowing the money supply to increase at too great a rate. I do not quibble at the present targets of 1 1 per cent to 13 per cent growth. But I do believe that with careful money market management this can be achieved without increased interest rates and without dampening down the level of economic activity in this country to the present disastrous level. I mentioned earlier a false ideology which is causing this situation. I can do no better than quote a Notes on the News talk 10 days ago by a friend of mine at Sydney University, Professor Ted Wheelwright. It may well be me talking, as my experiences and attitudes are the same as those which he expressed. I am pleased to read this piece of economic history into the Hansard record of our nation. Professor Wheelwright said:
It is now clear that no real economic recovery is in sight. This is the reason for the mini-Budget, or the economic statement, as the Government prefers to call it, on which much midnight oil is now being burned in Canberra. When the Prime Minister of a country tries to talk its economy out of a recession by exhorting consumers to spend, as Mr Fraser did a month ago, the situation must be quite serious. Ministers return from business lunches and report business disillusion with the Government ‘s economic policy.
Industrialists in manufacturing industry report that it is stagnant, and farmers in substantial areas of the rural sector are telling the Government that this year their real income will be lower than it has been for some considerable time. The traditional signs of economic crisis in the rural sector are with us: The destruction of livestock, some form of Government help to impoverished small farmers, and severe unemployment in country towns.
Hence, a week ago Mr Fraser told Parliament that (I quote) ‘Examinations that will take place over the weekend will lead to a significant statement by my honourable colleague the Treasurer before we rise for the winter recess’, (unquote)
This means within the next 3 weeks, for the winter recess normally begins on 3 June. Hence the flurries in Canberra, the midnight oil, and this week of speculation. A lot of the speculation is about further cuts in Government expenditure, for the Fraser Government is ideologically committed to a sizeable reduction in the public sector, so that the private sector will expand. Or so the argument goes; true, although there is also the concept that by reducing the deficit this will reduce the money supply and hence inflation, there has now crept into the debate a crude notion that the private sector is ‘good’, and the public sector is ‘bad’.
And there are the other signs of recession, senior public servants (preferably retired and knighted) who wield things called axes, which will ‘ cut ‘ or ‘ prune ‘ public expenditure-
The metaphor is never spelled out; the horticulturalist knows that to axe a tree is to kill it and to prune too severely can result in stunted growth and no fruit or flowers for several years. Professor Wheelwright went on:
These ways of thinking have a tendency to harden into dogmas, which can do irreparable harm to the Australian economy, which does have significant differences from other economies.
The dangers of uncritically importing the currently fashionable ideologies of cutting or otherwise emasculating the public sector to save the private patient, were brought home to me over the last couple of weeks when I had a few business lunches in quick succession. One was with an advertising executive, who complained that because of a cut in Government expenditure his agency was virtually on half time, and he was on half pay. This did not figure in any statistics, and I bought his lunch, being in a secure position in the public sector.
Another was an architect, who complained of cuts in Government expenditure which had really curtailed the demand, and hence the income, of architects and town planners.
I believe that even honourable members of the Government side have had experiences like this, as I have had. He went on to say:
The third was a printer in Brisbane who had to lay off staff because of a cut in expenditure on the Australian Government Publishing Service, which has been doing a lot of subcontracting to small private printers. The fourth was a tutor whom we could not pay to mark essays because of cuts in Government expenditure on education.
Perhaps more than any other advanced country in the capitalist world economy, Australia has been built on the public sector. It began as a prison farm, depending on what then might have been called ‘handouts’ from London, with ‘officer Sludgers’ collecting their dole in the form of rum currency. It has a long history of public sector activity; each colony had to develop its own economy, and its own service to the community. It had to build up its own public service, its own engineers for roads and bridges, ports and harbours and so on. Each colony had to provide the railways, the educational system, the hospitals, and often the brickworks and the meatworks to house and feed the people.
The result, today, is that one person out of every four in Australia is employed in the public sector, in various forms, such as public service, education, railways, electricity supply, health services, airlines, banking, insurance, telecommunications, broadcasting, housing commissions, CSIRO, public works, not to mention police forces, the judiciary, courts and the armed forces.
In terms of capital investment, for the last quarter century at least, one-third of all gross fixed domestic capital formation has been in the public sector- Commonwealth and State. Thus, one-third of all investment dollars have been spent on such things as irrigation works, roads, railways, airports, hospitals, schools and universities.
The nations economy has been geared to this kind of economic activity; without a large public sector, which helps to knit the Australian economy and society together by performing essential functions which do not make a profit, there would nave been massive unemployment long ago, Canberra would not exist, and the nation would have collapsed. The uncritical acceptance of an alien economic ideology, formulated in the reactionary enclaves of the mid-west of a country- the U.S.A.- whose economic history is so different from ours, can only spell disaster for the Australian economy.
It is not surprising but ironic that John Singleton, advertising executive and leading light of the so-called Workers
Party, is quoted as saying: ‘It’s no good Fraser saying get out and spend; we’re on the Titanic’.
Incidentally, Ted Wheelwright entitled that talk, ‘How to Ruin the Economy Without Really Trying’-and sub-titled it, ‘Public Sector “Bad”, Private Sector “Good” ‘. This is the context in which to examine the Treasurer’s latest statement. It expresses a philosophy which is totally alien to that of the Australian Labor Party. A great many people in this country may have been talked by our conservative opponents into believing that there was something bad about the public sector, but we believe that many of them are already realising the mistakes they have made. We want more expenditure in the public sector than the Liberal and National Country Party Government is allowing for. We believe that that expenditure should be restrained and, as I said earlier, selective. In particular, it should be in productive areas which will mean the use of resources which are not now being used, and it should be in areas where the expenditure can be terminated reasonably easily- when the rest of the economy gets moving.
We believe that if the Australian Labor Government Budget of last August was allowed to run its course, without the damaging jawboning for the need for belt-tightening, without the psychologically counter-productive economic statement after economic statement and without the unemployment creating expenditure cuts- first of all $360m in 1975-76, now a dramatic $2600m in 1976-77- we would have found by now an increase in the confidence of consumers, resulting in them spending. We would have found a response to this from businesses with their making an increased number of decisions to invest and we would have found business investment confidence enhanced by the absence of the deterrent created by so many of the private sector contracts being cancelled because of cuts in the public sector government spending. In short, we would have found an increase in production and a marked decrease in unemployment. Instead of that, by its wrong attitudes and its wrong policies, the Liberal and National Country Party Government has created an increase in seasonally adjusted unemploymentand this statement shows it is persisting in this policy.
In our Labor scenario, with a continuation of our policies of the last Budget, the increase in production would have led to an increase in productivity. We would have sat down with the unions of this country and explained that initially this productivity increase must go to the business sector to allow an increase of return to that sector. This increase, as has already been explained, is essential for that successful fight against inflation and for that continuing new investment to lift us completely out of the present economic stagnation.
We welcome the forthcoming talks between the Government and the unions. Close harmony between the 3 sectors- government, business and householders- is essential for the economic prosperity of this country. To date, there has been too little of this consultation. To our cost, we Australians have inherited the British tradition of distrust. Labor has been in power for too short a period since Federation for this distrust to be broken. We are pledged to break it. I believe we can, when given the opportunity, achieve- harmony and concensus at least to the extent of the Scandinavians and even perhaps the West Germans. Of course there will always be some conflict of interest. The Scandinavians owe their great harmony to their long line of social democratic governments. The present Government can never match what Labor can achieve in this sphere. There is little doubt that a social compact with the unions is required, but it can be achieved only in the right atmosphere. Blundering intervention in national wage cases seeking to reduce the real returns of wage and salary earners is not the proper atmosphere for such talks. Nor are economic statements which announce a cut in the standard of living of so many Australians by the impositions of such measures as a Medibank levy and a reduction in the social wage of householders by the cutting of government spending.
Support for wage indexation in the present economic circumstances would have been a proper atmosphere in which to have such talks. The industrial labour movement needs such an atmosphere of goodwill to prevail if it is to give up for a while its claims to a share of increased productivity to stimulate investments in order to reduce unemployment. I make a further point about these talks between government and unions. In future they must include the employers, they must be continuing and they must be at many levels. For instance, to illustrate my point in the union area only, it is not good enough merely to include the executive of the Australian Council of Trade Unions. For the future economic prosperity of this country there is a vital necessity for there to be a greater understanding of the needs and limitation of our economy at the level of State Trades and Labor Council executives and members. So this is Labor’s scenario: Create consumer confidence and allow governments to spend more even at the expense of an increased deficit- with this will come increased production- and make a social compact with the unions to allow the increased productivity initially to stimulate investment in order to sustain the economic recovery and thus reduce unemployment. Labor’s number one aim is to reduce that unemployment.
It would be wrong to assume from what I have said that the Australian Labor Party believes that all our problems can be cured by massive increases in government spending. What we are saying is that turn-arounds in government spending are of crucial importance in stabilisation policy and that this is not the time for government deflationary moves. The rest of the world would seem to agree with this view. We are interested in efficiency in government expenditure, but deplore random slashes without concern for functional impacts as a means of achieving efficiency.
I have in previous speeches dwelt at length on the campaign this Government has waged against the deficit and the pains it has taken to convince the electorate that all and any government spending cuts are good. This hard sell, when coupled with the Prime Minister’s ideological small government line, takes on greater significance. If the electorate accepts that all government spending cuts are right, then the Prime Minister’s attempts to reduce the public sector spending will be that much easier. Unfortunately, by falsely attempting to demonstrate an inexorable link between reduced government spending and economic recovery, the Prime Minister is clouding the real issue.
If the Prime Minister has an ideological commitment to small government, both State and Commonwealth, then let him get out and sell that view. Let there be debate on the real issuethe extent of the provision of public services. Do not let the issue be dressed up as something it is not- an economic imperative. The people of Australia must be given the opportunity of seeing the Prime Minister’s small government message for what it is- a reduction in the number of goods and services the people receive from government. It would appear the people of New South Wales have realised what is in store as the Government’s assault on the public sector continues. We must examine closely what the Prime Minister means when he says ‘less government’ and attempts to imply that this will make us all better off.
If the Australian Government could manage to save itself the salary bill of every department and still get its programs done, the result would still be a Budget deficit. So less government must obviously mean less for people who depend on government. Senator Hubert Humphrey recently summed up the facts of less government when he said:
This business of less government, this slogan of ‘Less is More’ is a shoddy, phoney business. Don’t buy the phrase. Take a look at the specifics. Take a look at what they mean. Less for whom? Less for the people who can least afford to suffer the pains of having less.
The real message of the Prime Minister is less government- even fewer telephones for constituents of Country Party members. He plans to return economic power to individuals. Unfortunately, only priviliged individuals can benefit from this plan in a complex modern society. The Government must be there to prevent exploitation of those who lack the advantages others have had bestowed upon them. The Fraser Government’s plans are ones of taking from the have-nots to give to the haves. But not only is this Government prepared to bring about a drop in individuals’ social wage by removing government services. It goes before the Australian Conciliation and Arbitration Commission and argues for a drop in real wages as well. This is an argument which sits very strangely beside the pleas of the Prime Minister to- consumers to go out and buy. Truly, we are faced with policies of confusion.
As the economic statement before the House is concerned to a great extent with government expenditure, I have centred my discussions so far upon this aspect of the Government’s economic policies. However, it would be remiss of me not to say more on other aspects of the policies this Government has for the economy. In its submission to the national wage and wage indexation hearing for April, in a section which goes under the title ‘Government Policies for Recovery and Inflation Control’, the Government propounds its arguments. It argues that inflation control is the key to recovery and that inflationary expectations must be dampened for this to occur. It does not spell out how this will occur or to what extent it will allow the economy to run down and unemployment to rise to dampen these expectations. It appears to be trying to control demand inflation, which assuredly does not exist, but says wage cost rises are of major importance. It even argues for real wage cuts. But what of its wages policy? The Australian Financial Review of 23 April called it ‘puzzling’. It is that and more. The actions of this Government in proposing impractical fiddles to the consumer price index and its damaging arbitrary decision to oppose the 6.4 per cent wage flow-on, have brought a climate of confrontation into the Australian industrial scene- something which is not needed if wage restraint, so successfully gained under Labor, is to continue. It is difficult to imagine an economic package which leaves 57 per cent of wage earners worse off acting as the magic catalyst of wage restraint. The Arbitration Commission has twice indicated that it believes the Government’s assessment of the economy has been insufficiently substantiated. Need any further comment really be made? I repeat: Truly we are suffering a government which does not know whether it is coming or going in this economic sphere.
To summarise what I have been saying, the Australian economy is stagnating unnecessarily. The Hayden Budget and other economic policies introduced in the second half of 1975 were appropriately contributing both to slowing down the rate of inflation and to stimulating productive activity. Since the election, conservative ideology has distorted policy and retarded recovery. Over-concern about the rate of growth of the money supply led to the interest rate on new savings bonds being set at too high a level. The investment allowance mis-allocates funds to the private sector. The Government’s interventions in the wage indexation cases, apparently aimed at reducing real wages, have lacked sufficient concern for the well-being of wage earners. But most important has been the unrelenting pressure to contract the public sector. The Government seems to think of the economy as a space made up of public and private sections, so that if the public share is reduced the private share will increase. But of course the economy is more dynamic and complex than this. Even given the Government’s own priorities, all parts of the economy need to be stimulated for a sustained recovery to take place.
When in Opposition the Prime Minister said often that confidence would return to the private sector immediately a Liberal-National Country Party government was elected. This has not happened. Businessmen are rational. They will invest only when existing capacity is inadequate to meet total demand, and total demand for goods and services depends not only on investors, but also on consumers, governments and demand for exports. Each of these areas influences the level of economic activity. But this Government insists on cutting spending- or at least that is what it says is being done. Many of the so-called cuts described in the Treasurer’s statement were illusory. I will return to that point in a moment. Saying that public expenditure is to be reduced has a depressing psychological impact on the private sector. People in industries directly dependent on public spending will anticipate reduced turnover and so reduce orders, causing effects in other parts of the economy. Real spending cuts will obviously reduce total community spending, causing lower levels of employment and utilisation of capacity in directly affected industries and indirect effects on the rest of the economy. Obviously employment in the public sector will decline or grow only slowly, and unemployment in the building and construction industry will increase as a result of the decisions announced in the Treasurer’s statement.
The Treasurer’s statement is too vague, too lacking in information for us to be able to estimate its overall impact accurately. It looks as though the effect will be increased unemployment as a result of both reduced total spending and reduced expectations that spending will expand. The Government’s priorities are mistaken. The Treasurer said that inflation is the greatest threat to the long term recovery of the economy. It is obvious that rapid inflation harms not only the economy but also the whole structure of society. It is certainly important to reduce the rate of growth of prices. But nearly 300 000 people are unemployed; that is, nearly 300 000 people who are actively looking for jobs cannot find them. It is easy for the safely employed to neglect the enormous damage this is doing to the people involved. I think that the principal priority in economic policy at present should be in dealing with unemployment. If increasing employment opportunities became the focus of economic policy, a different package of measures would be required. Recovery of the level of economic activity would be the principal aim with the control of inflation a complementary goal. Caution with the money supply, personal tax indexation and increased child endowment might well be part of that package, but so too would be the continuation and expansion of the effective expenditure programs begun by the Labor Government. Care not to increase indirect taxes would be another element in such a package, for this would contribute to achieving both aims. In fact, let me place on record my view that it would be far preferable for the economic health of this nation if investment allowances were abolished in return for a commensurate cut in such indirect taxes as sales tax.
Now let me devote the rest of my speech to some specific comments on the Treasurer’s statement. Mostly I have left this task to my colleagues who will follow me in this debate. But I do want to make these points briefly: Firstly, there is much rhetoric but little explanation of how the measures are going to contribute to reducing inflation, and there is no description of how they will effect the level of unemployment. Secondly, the statement describes the normal process of budget preparation as a major breakthrough in responsible government. This is nonsense. Every year each department prepares its request for funds on the basis of what it can responsibly spend on continuing new programs in the absence of a financial constraint. These requests are then cut by Cabinet on the advice of Treasury to fit in with available resources. This happens every year under every government. It is unusual to publicise this process, although I believe on this occasion, after all the ballyhoo that has gone on about the need to cut government expenditure in early months, that those forward estimates would have been at their bone before the knife got to work. Thirdly, much of the statement is meaningless because it describes cuts from bids but often does not state the level either of the bid or of the planned allocation.
Fourthly, it is an erratic statement with too much detail about some measures and too little about others, and the whole statement is excessively long, reducing its credibility. Fifthly, Labor welcomes the increase in child endowment. We would have done this ourselves. We had had position papers on the subject since 1971. However, we delayed implementation until the recommendations of the Henderson poverty inquiry were made known. These recommendations were not made to our Government until last August which was too late for our last Budget. However, my sixth point is that we deplore the fact that these improvements to child endowment have been carried out at the expense of so many. We read in the Press that about 57 per cent of all taxpayers will be worse off as a result of the new tax system of family allowances, tax indexation and the Medibank levy. The figure allegedly contained in a confidential Treasury document confirms our own calculations on the subject that over 50 per cent of taxpayers in that taxable income area around average weekly earnings will be worse off. This assessment ignores the increased taxes likely now to be imposed by States and local government.
My seventh point is that the effect on the States of the economic package in the statement is serious. Their specific purpose grants have been cut enormously- for sewerage, for urban public transport, for hospitals, for water treatment and for education. They may be little worse off in the area of their general purpose grants in 1976-77 than they expected after the Premiers Conference, because the increase in taxes arising from the abolition of the rebates for children offsets the additional loss to revenue incurred from giving full indexation; but they will be decidedly worse off in future in relation to general grants as well as specific grants under the new revenue sharing formula, because the increases will not be as great as they were under the old formula.
My eighth point is that similarly local government is left in dire straits by this LiberalNational Country Party Government in this economic package. Today’s newspapers tell the sad story that all local government rates are likely to increase at least 5 per cent next financial year because of the Federal Government’s package. The figure of $ 140m for local government announced in this statement is just not enough. Listed as a minimum requirement was $176m, but to add to local government troubles there is the axing of funds available through the Australian Assistance Plan and other specific purpose grant programs.
My ninth point is that the lesser amounts in specific grants to the States for hospitals are well short of last year’s figure in real terms; for education, well short of recommendations by the education commissions; for railways, even the Adelaide-Crystal Brook line is questioned, as is the standard gauge program generally which seems now to be a thing of the past for this government; for the Department of Environment, Housing and Community Development, slashed by over $400m, and so on. This is bound to mean in addition to a reduction in the quality of life of Australians either an imposition of State income taxes or an increase in State indirect taxes. How on earth can any government claim to be generous in giving tax indexation when it forces on the people these State and local government imposts in addition to the Medibank levy? Let us contemplate what a counterproductive effect this is going to have on the wages front at a time when restraint is so badly needed. This exacerbates the danger to individual relations created by the decline in the social wage caused by so many cuts in government spending.
My tenth point is that many of the areas in which cuts have been made will have a direct effect on reducing productivity at a time when an increase in productivity is so badly needed. In addition to a fair day’s work in return for a fair day’s pay, we want improved management and improved public investment to achieve this purpose of greater productivity. This will not happen by reducing the expenditure on transport and delaying the building of standard gauge railways, and so on. I wish I had time to say more about this increase in productivity as it relates to the Adelaide-Crystal Brook railway line. I know that my colleague, the honourable member for Hawker (Mr Jacobi), who is in the chamber, wanted to speak in this debate and give more details of that but unfortunately the time of the debate is limited.
My eleventh point is that the statement must not be allowed to pass without my mentioning Medibank. This will be under further discussion when the relevant Bills go through this Parliament over the next couple of days. Suffice it for me to say now that, apart from condemning the imposition of the levy, I regret deeply the creation of a 2-class system of health care in this country.
My twelfth point is that there are some typical examples of Liberal-National Country Party parsimony in the effects of the announcements in this statement. The taxing of so many pensioners is to be deplored. So are the extra charges to be applied to so many old servicemen whose benefits from the Repatriation Department are being reduced. So is the miserable treatment applied to Aborigines. Any savings to this social expenditure now will be more than offset by the enormous increase in expenditure which will be required in future years because of the problems not being cured this year, because of lack of resources made available by this government now for Aborigines. Apart from the disgrace of it all- the lack of humanitarianism- it is just so short sighted. The Aborigine people will become increasingly bitter and this Government will be responsible for that.
Lastly, I must mention overseas aid, although let it be known that I have a lot more I would have liked to have turned my attention to in this statement. The total appropriated for foreign aid by the Australian Labor Government in 1975-76 was $378.2m. This was an increase of $48.6m on previous years. Our political opponents, the coalition parties now in government, slashed this to $351m. They are now providing for 1976-77, thanks to some good lobbying by the churches and other aid organisations $400m, an increase of $49m on their relatively miserable previous year’s figure but of only $22m on our Australian Labor Party Government’s figure. In other words, their increase is only 6 per cent on that provided by the Australian Labor Party’s Budget of last year. This is a decline in real terms when one takes into consideration an inflation rate of 13 per cent. And yet deceitfully the Treasurer’s statement under the heading of Foreign Aid reads:
Budgetary difficulties notwithstanding, the Government has decided on a 14 per cent increase in Australia’s total overseas aid program in 1976-77.
That is just not true. It is only 6 per cent on the figure appropriated last year. This is typical of so much that is misleading in this economic statement. One other area should be mentioned. If one adds up the details of the so-called figures reduced from the forward Estimates one gets nowhere near the $2,600m which the Treasurer alleges has been cut from those Estimates. This is one of the many things which breeds this aura, this atmosphere and this attitude in the community of a lack of confidence in this Government.
In fact, Mr Speaker, in summarising I believe that the announcements of this statement are -of very serious consequence to Australians in a number of ways. Confusion has been created. Nobody knows the real cuts in government expenditure. Few know where they really stand with Medibank. This damage to public confidence has serious economic consequences. Further, the attitudes and policies of the LiberalNational Country Party Government as continued in the announcements in this statement have created a set-back to the steady economic recovery which was under way before this Government came to power. We have seen that this is so by examination of the seasonally adjusted unemployment figures. In addition, the cuts in government expenditure, apart from their effects on confidence and on deterring consumers from spending, are deliberately creating unemployment. More men and women would be employed and more resources would be in use if only more government contracts were let.
Lastly, in summary, I draw attention to the lowering of the quality of life by the dismantling of sections of the public sector and by instituting 2 classes of health care, to the unnecessary penalties applied to large sections of the Australian community on modest incomes in reducing their take-home pay and to the increase in burdens on the States and local government- and thus on the people who pay State taxes and local government rates- in forcing more functions on those levels of government without providing the funds to carry out those functions. All in all, this Liberal-National Country Party Government in under 6 months of existence can be thoroughly ashamed of itself.
-We have just listened to the honourable member for Adelaide (Mr Hurford), the Labor Treasury spokesman, replying to the statement that the Treasurer (Mr Lynch) made last Thursday evening. He adopted throughout his rather lengthy speech a moderate tone. I think that calls all the more for an analysis of just what he has put to us as the official view of the Labor Party. He said, for instance- I can take up only some of his points as I have less time than he had-that unemployment was the main problem in the country to be faced by the Government. Of course it must be apparent to anybody listening to this debate that Labor’s efforts created the highest unemployment in this country since the great depression of the 1930s. He said: ‘It ought to be the principal objective of the Government to deal with this matter’. Later on in his speech he said that recovery recovery of the economy was the first step. Of course there we have common ground. But the dispute between our parties is as to how that should be approached. The Treasurer (Mr Lynch) for his part has had a lot to say about economic recovery and how it should be achieved.
The honourable member for Adelaide went on later to say quite clearly that he believes that the investment allowance ought to be abolished and the cost ought to be offset by a reduction in sales tax. Let us just pause there for a moment and ask ourselves: Which would have the greatest effect for the recovery of the Australian economy? Would it be an incentive for people to manufacture plant and machinery, providing employment in manufacturing and going right through the service industries, providing plant and equipment that can be used for productive purposes; or would it be the extra demand that we might expect from people presumably buying more goods after a drop in sales tax? I really do not think that any economist could come to the conclusion that such a reduction in sales tax would have anything like the recovery effect of the investment allowance, which is an encouragement by the Government amounting to near $500m. It is a progressive policy which I think will have a big effect in creating employment and in the future, enlarging the productive capacity of this country. But apparently the honourable member for Adelaide has stated the official Australian Labor Party policy, which is no investment allowance and reduction of sales tax by an equivalent amount.
He spoke of budget deficits and said that they are not an evil in themselves. We know that in Australia we have an enormous deficit problem. When the Labor Government produced the Budget before last it budgeted for a deficit of, I think, $2,700m. At the time I and other honourable members in this House said that there was no way in the world that the previous Government could confine the deficit to that figure. Sure enough, the figure ended up very nearly double the estimate. In fact that indication in the original documents was grossly misleading. Of course no one is saying that a deficit is necessarily evil in every case. But the point is: the size of it and the attitude that should be taken to our whole economic policy in this country. If one says that the size of the deficit does not matter- there are honourable members in this place who say such things, some of them even on this side of the House- what one is saying is that one will leave most of the economic control to monetary policy, which of course is inadequate for the task. We saw what happened when Labor tried to draw in expansion by using only the money supply. One would also be saying that the size of the deficit, no matter what it is, is of no consequence.
I remind the House that that view may be taken by some economists- I think Professor Wheelwright was mentioned- but it is not a view that is taken by any central banker or Treasury official of any of the countries in the Western World with comparable economies to whom I have spoken in the last few years; and that includes those from the United States of America, the United Kingdom, France, Germany and Belgium. In other words, those who are in responsible positions recognise that such fiscal packages are necessary and they recognise that a deficit can be too big. Each of those countriesI would hope the only countries with economies with which we would care to compare our economy- has recently instituted a similar package to the sort of package we are debating today. They have similar objectives. Those countries are very conscious of the size of deficits and they are trying to rein in their expenditures. It is all very well to put up attractive theories which state that one can have it both ways, but if one is in a position of responsibility, and Treasurers and finance Ministers of those countries are in that position, of course one cannot just do things that merely read well.
As far as I can see it the solution put forward by the Labor Party to meet our present predicament is to spend more. It is suggested that if money is spent in productive areas somehow it will cure our problems. I remind the House and the country that Labor tried all that in the last 3 years. It had its chance. If spending in productive areas is the major solution- that is mainly what was put to us today- what was the effect in these areas? Did we have a vast boom in the manufacturing sector, in the mining sector either, in development or exploration, or in the rural sector? Where was the boom in Australia? I shall tell honourable members. It was in land prices and in the growth of Public Service employment. All those other areas- manufacture, mining development and exploration and most rural industries- were in a position near disaster. This is a result, in the main of Labor policies, not entirely, but in the main.
This fiscal package which is put forward as part of what is necessary for economic recovery in Australia is similar to packages recently put in the United States and in the United Kingdom. Of course there was a time when the Australian Labor Party used to like to refer to Britain and say when the British Labour Party had done something ‘that it was a marvellous thing. Looking at the state of the United Kingdom economy at present-rit is under a British Labour Party- it is strange that we do not seem to hear that argument today.
We were told tonight that we are working to an alien system and we had an outmoded way of looking at things by being concerned about the level of government expenditure and large deficits. We were clearly told, let the country notice this, that the Labor Party is totally opposed to that outlook. In other words, that means that it is in favour of a continuation of its earlier policies. The Labor Opposition believes that we should not worry about the size of the deficit and the level of expenditure, and of course because it follows, about the size of taxation levied in Australia, no matter what it does to personal initiative.
The Government’s present position is not unlike the position of a company which acquires an unprofitable company. What attitude does it take to that company? It says: ‘This company we have acquired is in such a mess that we will try by a number of measures to get it on an even keel in the first year. If we are successful we will look for some sort of stability and profit in the second year, it will not be done quickly, in the last election campaign we said to the people of Australia: ‘The position is bad. The economy’s position is grave. It will take time and tough measures will be necessary. This Government has been prepared to stand up and to face the position and to take tough measures. The position will not be cured quickly. As yet the Government has not been in office for 6 months. This package is one step in getting this economy back on an even keel. What else would we really expect? What was promised to the electors of Australia if it was not an effort to rein in the earlier extravagance and to bring taxation to a lower level than anticipated.
In the last Budget the then Treasurer, the honourable member for Oxley (Mr Hayden), sold the idea successfully that the previous Government was providing tax cuts. Of course we know perfectly well that no tax cuts whatsoever were provided. As a matter of fact, personal income tax was budgeted to rise by an additional $2,000m. In Australia in recent years we have had the highest sustained level of inflation in our history, a level which certainly was higher that that in our earlier years. After all, in the 1960s and earlier we had on an average an inflation rate of 2 Vi per cent over 1 5 years. That rate of 2 !/4 per cent was sustained under Liberal Party governments. But of course in the late 1960s and early 1970s we were aware of the world recession taking place and great oil price rises, and it was natural that Australia would have an increase in inflation because of the pressures. But Labor came along with a lot of bright new policies, some of which I might say would have been appropriate for the late 1960s but which were completely inappropriate in 1972, 1973, 1974 and 1975. The result was that instead of having an inflation rate of the order of about 8 per centthat is all Australia ought ever to have had because the Australia economy was not much affected by oil price rises- we ended up in the dizzy heights which usually are associated only with banana republics.
Let us compare our inflation rate today with those of other countries in the Organisation for Economic Co-operation and Development with comparable economies. When the Leader of the Opposition (Mr E. G. Whitlam) was Prime Minister he used to say that we are ‘near the top’ we are ‘near the bottom of the OECD list’ or something like that. But let us compare our position with those economies that are well managed and highly developed- with the exception of Great Britian, of course. We do not, with respect to them, want to be compared with what is happening in Iceland, Turkey and other such countries. I am talking about the well managed economies. We were fortunate to have a well managed economy until recent years .
– What was your inflation rate at the end?
Mr GARLAND If the honourable member for Prospect had listened carefully he would have known that I said ‘sustained rate’. However, I do not want to be diverted. The position is that we had about double the rate that we ought to have had.
Of course inflation is at the root of our problems. Of course inflation has made the employment situation worse- I think ‘exacerbated’ would be the word used by the Leader of the Opposition to describe the situation. Of course inflation has made the interest rates rise. We have had record interest rates. The Australian Labor Party had its chance in this area and it did not take advantage of it. It is not that it did not receive warnings. I take the liberty of quoting from a speech that I made in this House in 1971 after listening to speeches from the Labor Party’s ranks. Speaking of the then and present Leader of the Opposition, I said:
It is easy to promise and while he speaks with such indignation of the last Budget and of inflation, his own speech on that Budget and the 2 policy speeches he has made in the last 18 months are a catalogue of vast additional expenditure that he would make. It is a formidable increase which, if implemented, would result in catastrophic inflation.
Perhaps I can be immodest enough to claim that that was prophetic. In endeavouring to criticise the package put forward by the Government the members of the Opposition are engaged in this debate in harping on emotional issues. They are going to say- it has just been said- that they accept from the package the benefits that are being given to the people, but they are going to hammer away at the areas which are to somebody’s disadvantage. They will criticise anything that will result in the weight of an additional burden. That, of course, is common in such debates. The shifting of the burden of discontent always results in less gratitude on one side as against the antagonism on the other.
The Government has developed a package which will result in the introduction of indexation, which is necessary to prevent people’s tax rates from rising with inflation. It is determined to cut government expenditure. It is determined to put some limit on the blank cheque that has been signed in relation to Medibank because it knows perfectly that if the expenditure on Medibank is allowed to grow at its present rate it will grow so fast that the money needed for it can come only from future education and welfare. The Government is also providing an increase- a large increase- in child endowment, which will be paid to the mothers of children in areas in which there is real need and in which the private welfare agencies have said that such payment is so necessary. I am delighted to support this Government and its package. I am delighted that we have a government that is determined to tackle firmly Australia’s major problems.
Mr DEPUTY SPEAKER (Mr Lucock)Order! The honourable member’s time has expired.
-The statement by the Treasurer (Mr Lynch) on Thursday night spelt the end of any commitment by the Australian Government to the basic needs of the Australian people. It served notice to the world that one of the richest and most fortunate nations on earth cannot afford to give its citizens the minimum decent standards of health care, public transport, urban development and social amenities enjoyed by the people of all other advanced Western democracies- all other well managed economies. Nowhere is the nature of the Fraser Government more clearly revealed than in the priorities set by the Treasurer last week. The attack on Government expenditure in the Treasurer’s proposals is not primarily an attack on the deficit but an attack on the living standards of Australians. Medibank as we know it is finished. Expenditure on urban and regional development is virtually eliminated. Public investment in transport is cut back. Any responsibility for the growth of our cities and the quality of life of their people is abandoned. At one stroke the Government is condemning millions of Australians to secondrate housing, second-rate transport and a second-rate environment in second-rate suburbs and towns. It is abdicating its responsibility in the very areas where public expenditure alone can meet the people’s needs. It is demonstrating the classic complacency of conservative governmentsthe do-nothing defeatism of successive Liberal Administrations which blighted the nation’s progress for 23 years.
During the election campaign the threat to all these programs was concealed in the usual wad of Liberal verbiage. The people were never told that Medibank, their sewerage programs, their growth centres, their urban transport improvements and their chances of buying land at fair prices would be virtually wiped out by a Fraser Government. It has taken the Prime Minister (Mr Malcolm Fraser) just 6 months since his policy speech to come clean about his promises. On television last night he was asked about his undertaking that education, health, welfare and urban programs would be retained. He replied:
You will remember those comments were made in the context of the last election campaign and in the context of what was going to happen immediately thereafter.
In other words, all those fraudulent promises were for electoral consumption only. Yet for those who studied the Liberal policy documents closely the deception was clear from the beginning. By promising that health, education, welfare and urban programs would not be curtailed in the present financial year the Government was able to disguise its intentions for subsequent years. The real mendacity of its policy documents hinged on a double-edged use of the word ‘essential’. The public was assured that essential spending would be maintained. It was never told what the Government considered essential.
Now we know. Nothing is considered essential. Medibank is not essential: Health care is again to become a needless worry and a needless financial burden. Growth centres are not essential: Our bulging and bloated capitals will continue to sprawl unchecked. Sewerage is not essential: A fundamental amenity for civilised populations is to be denied to hundreds of thousands of Australians. Land commissions are not essential: Man’s one irreplaceable and immovable resource is to be handed back to developers and speculators for their personal enrichment. Spending on urban public transport is not essen:tial: No additional funds will be provided next financial year. New hospital programs are not essential: Funds for hospitals are at a standstill.
The Liberals have never grasped that all these deficiencies, all these inadequate services and untackled problems add inexorably to society’s costs. If human values do not concern them, at least let them think of economic values. It is not the Government’s spending in these areas that constitutes waste: It is the Government’s failure to spend. The real waste is in the time, money and human resources dissipated by substandard services and public amenities which no other affluent nation in the world will tolerate. The high cost structure and built-in wastage entailed in overgrown cities are beyond estimation. The longer we postpone essential services like sewerage the greater the ultimate cost and disruption of providing them. The longer we delay the building of necessary hospitals and health centres the greater the cost in sickness, rehabilitation and absenteeism. The longer it takes to get to work on dilapidated trains the higher the toll in industrial production and human efficiency. The more deprived and backward our cities and towns, the greater the toll in crime and mental illness. All this neglect and impoverishment diminishes the nation’s productivity, blunts its competitiveness as a trading nation and burdens its people with needless inconvenience and hardship.
No other country In the world has neglected these areas as wantonly as Australia. No other federal nation- the United States, West Germany, Canada- is abandoning federal programs in order to reduce its federal deficit or deal with its economic problems. The least the Liberals can do if they want to reduce expenditure is evolve some rational system of priorities. Where should our available resources go first- on a superphosphate bounty, on abolishing the meat export levy, on investment allowances, on school cadets? Or on land commissions, on sewerage, on national transport systems, on growth centres? These programs are not luxuries. They are essentials. For most Australians they are the only essentials. These are the indispensable conditions of advanced, civilised societies, and they can be achieved only by government action and government expenditure. No matter how great a person’s income he cannot provide decent transport or decent cities for himself and his family without the intervention of governmentswithout government spending.
The problem is one of growing urgency. In the quarter of a century between the end of World War II and 1971 Australia’s population growth was increasingly concentrated in the major urban centres of New South Wales, Victoria and Queensland. Between 1947 and 1971 the censuses of those years show that the percentage of Australians living in urban centres with a thousand or more people increased from 68.9 to 85.6. The 1971 census showed that of 11 000 000 people then living in urban centres, approximately 7 500 000 or 68 per cent, lived in the 15 largest cities. The only way to reduce the pressures on already overstrained and overburdened community resources is to encourage the growth of new cities.
The Treasurer served notice on Thursday that the growth centre program will be terminated. In the favourite euphemism of the Fraser Government, it is ‘subject to review’. The Acting Minister for Environment, Housing and Community Development (Mr MacKellar) admitted to his own statement on Thursday:
The Government is fully aware of the problems that uncertainty can cause to business confidence in the centres and as a result has directed that the review be carried out as a matter of urgency.
The only respite for the condemned man is to be a hastening of his execution. For AlburyWodonga the most successful and creative experiment in co-operative federalism- the Government is providing $9m to meet its legal commitments compared with $45 m sought by the Department to maintain the program at its natural rate of development. Other growth centre projects are to lapse altogether.
The commitment to Albury-Wodonga was made on 25 January 1973 by the Premiers of New South Wales and Victoria, my Deputy and me. It was spelt out in solemn agreements between the 3 Governments and embodied in a development corporation set up by the 3 Governments and already operating. Whatever one may think of growth centres, they are not something where the Federal Government alone has a divine right to grant or withhold expenditure. Decisions by other governments and local government are affected. Decisions by private firms, developers, planning authorities and individual citizens all depend on firm assurances of government support- on government commitments. The Fraser Government’s backtracking, far from eliminating waste, will endanger millions of dollars in private investment and will jeopardise the employment of thousands of local residents and public servants.
As with cities and growth centres, so with hospitals and health insurance. The concept of Medibank, like Albury-Wodonga, was endorsed by a committee set up by our predecessors. The Nimmo Committee in 1969 called for a thoroughgoing reform of the old health scheme and described the private funds as bureaucracies. The pretence that Medibank will be preserved by the Fraser Government now deceives no one. People were deceived during the election but they are deceived no longer. The Prime Minister has yet to explain how Medibank will be preserved when more than, half the Australian people will be forced out of it. That is how the Liberals will preserve Medibank- by chopping it in half. Medibank will be made so expensive that half the people now covered for free, automatic, universal health insurance will be driven to join private funds. What waste and extravagance will be eliminated here? What are the savings for the Australian people? There is none.
Employers, State governments, taxpayers and motorists are familiar enough already with the waste, duplication, inefficiency- and above all, ever-mounting costs- of compulsory private insurance for third party and workers compensation. The Fraser Government has now decreed that precisely the same pattern of waste and high cost will afflict health insurance. We are to get the worst of both worlds. Whatever arguments there may be for private health funds there can be no argument for a competing mixture of public and private funds. The Fraser Government is merely adding to the inefficiency and duplication of existing funds. Statistics tabled in this Parliament on 28 October and never challenged demonstrate conclusively that a single government scheme for third party and workers compensation would have saved employers and vehicle owners $225m this financial year. Here we have the clearest example of how a government’s failure to spend produces inevitable waste and extravagance by the private sector.
The withdrawal of hospital subsidies, the destruction of Medibank, the drastic increases decreed in public hospital charges for intermediate and private wards will put the best medical care beyond the reach of even moderately well-to-do families. The Fraser Government is ensuring that private health insurance premiums will go on mounting year by year in the same way as third party charges to motorists. Every country in the world is facing steeply rising costs of medical care and hospital treatment. It is beyond question that the only way to rationalise and apportion these costs fairly throughout the community is by means of a single, comprehensive, national insurance fund. The only economical and efficient way to provide compulsory insurance is for a government to provide it. The destruction of Medibank will serve no purpose other than to revive the moribund private health bureaucracies. It is an ideological hangup by the Liberals.
In April 1974 the Hospital and Health Services Commission presented to the Government a report on hospitals in Australia recommending an urgent program of capital expenditure on public hospitals, mental hospital facilities and public nursing homes. My Government accepted the Commission’s recommendations. The Fraser Government does not. There is to be no growth next year in the hospitals development program. Expenditure allocated for next year will remain at the level of $ 108m for this financial year. According to the Minister for Health (Mr Hunt) the allocation will be $43m less than the Department’s estimated needs. In other words, the program for new hospitals will come to a standstill.
The Treasurer’s statement offered no hope to Australians who want to buy land. The land price spiral will continue. The Fraser Government will do nothing to halt the growth of land prices- always the most expensive component in the price of a home. The statement last Thursday by the Treasurer and that of the Acting Minister for Environment, Housing and Community Development made it clear that Federal funds for land commissions will be curtailed. This is another area set down for ‘urgent review’. Land commissions are already operating in South Australia and Victoria and the Labor Government of New South Wales will be going ahead with a land commission shortly. Only through government intervention can the community ensure that land is made available at fair prices to homebuyers. Land commissions depend largely on Federal funds which my Government provided. The Department has estimated that $41m will be needed for the coming year. The Government will give nothing save the $ 14.3m needed to meet existing legal commitments. The Treasurer stated that an interdepartmental committee would inquire into land commissions. He gave a useful insight into the Government’s thinking when he revealed that one of the committee ‘s main considerations would be the ‘viability of the private sector’- in other words, the private land developers and speculators who have grown rich on the hopes and savings of young Australians.
There is to be a drastic cut in funds under the national sewerage program. My Government allocated $113m for the current year. The Department sought $145m for next year. The Government will provide only $50m. The National Estate program- an investment of modest cost but inestimable public value- will be virtually destroyed. Of the $8m sought by the Department, the Government will provide $ 1.35m compared with the $5m provided by my Government. Despite pious words from the Minister for Transport (Mr Nixon) there is to be no more money for urban public transport next year. The New South Wales State election showed how keenly people feel on this subject. Yet public transport is another field where there has been unanimity of advice from qualified bodies and experts. A report by the Bureau of Transport Economics available to the Liberals in 1 972 drew attention to the need for investment in urban public transport and the magnitude of the funds required. The broad thrust of that report was accepted by my Government in 1973. The Liberals are abandoning it.
The Government maintains its deception and obfuscations even when announcing its new measures. It is difficult to discover anywhere in the Treasurer’s speech -
Mr DEPUTY SPEAKER (Mr Lucock)Order! The honourable member’s time has expired.
– I move:
-The question is: ‘That an extension of time be granted to the Leader of the Opposition ‘.
-Was some arrangement entered into?
– The honourable member for Adelaide did not take all of his time.
-Those of that opinion say ‘ aye ‘, to the contrary ‘ no ‘.
-An extension of time is not granted.
– We just heard a speech read by the Leader of the Opposition (Mr E. G. Whitlam) which obviously was written by Graham Freudenberg. It was read without a great degree of enthusiasm or interest. It must by doubtful whether the honourable gentleman had any idea at all about the substance of the subject on which he was talking.
– It was lack lustre.
– ‘Lack lustre’ is a very good phrase to use. I wish I had chosen it myself. I want to examine the performances of the honourable gentleman while Prime Minister. I cannot understand how he could have the hide, when judged against those performances, to get up in the House and condemn the Government after it has been in office for only 6 months whilst it has been trying to repair the devastating conditions that he himself created. I would like to mention 4 aspects. I point out that during a period of 10 years that we were in government we increased our gross domestic product by 5.2 per cent per annum, on the average.
During the 3 years that the Labor Party was in government it reduced gross domestic product to 2.8 per cent, and in each of the last succeeding quarters of 1975 it was operating with a substantial deficit in national production. Those figures are unbelievable in anyone’s language, including the banana republics and including, if you like, other countries which are in critically desperate economic positions today.
I can give the House the consumer price index figures. When we were in government from 1962 to 1972 the average rate of increase in the consumer price index was about 3.4 per cent. What did the Labor Government achieve under the leadership of the Leader of the Opposition who has just sat down. The increase was nothing like 3 per cent, but the average increase during that period was 13.4 per cent. Similarly, when we were in government average weekly earnings, which are the most important determinant of increases in prices and costs, increased at a rate of 7 per cent. But in the days of Labor the average increase was more than 18 per cent in 1972 to 1975. We heard the shadow Treasurer, the honourable member for Adelaide (Mr Hurford), talking about unemployment. What credit can the former Labor Government take in relation to unemployment, when in the March quarter of 1973, to be handed on as a legacy from our Government, unemployment was down to 87 000. Today we have an unbelievably high unemployment figure, It is something of the order of 270 000. Labor had predicted that if it remained in office it would increase to 360 000.
– That is what it said.
-Quite right. I want to speak about the bravado of the Leader of the Opposition. I have never known a man in all my life with such pretensions and delusions of grandeur as the Leader of the Opposition. I remember that four of five months after he became the Minister for Foreign Affairs he had not had time to do anything in that field because he was managing, so he said, about 10 other portfolios. No wonder he made a mess. Speaking about Curtin and another great man, Mr Chifley, he said on a radio interview that he regarded the 3 years of his Government as having far more influence on the development of Australia than the 8 years of the Curtin and Chifley governments m the 1940s. I wonder whether there can ever have been a more contemptible statement. Does any honourable member opposite or any member of the whole of the Labor movement agree with that statement, or do they believe that it is a show of vanity unequalled in Parliamentary life? But hold your horses Sir, I know that you are capable of reacting very suddenly and hostilely to a stupid statement. The Leader of the Opposition went on to say:
Menzies, in his 16 years as Prime Minister, did not achieve as much as I did in three.
-Who said that?
– This fellow who is up the back of the chamber gossiping with my friend from Hunter. I cannot understand a man who I admire so much talking to him in the friendly way that he is, especially after what I have just said about his performances in relation to national growth, inflation, employment and the other matters which I have mentioned. I cannot think of a greater failure in the history of this country than the honourable gentleman. It must be a surprise to everyone- every single thinking person in this House; every single person in the community- that a man with such a record can be sustained in office. Let us look at another angle of his criticism. As far as the 2 statements which have been made are concerned- the one made on television by the Prime Minister (Mr
Malcolm Fraser) and the other made in this place by the Treasurer (Mr Lynch)- the honourable member for Werriwa ought to listen to what Mr Hawke said. In the Australian of 24 May we see in the heading to an article that Mr Hawke, as the chief of the Australian Council of Trade Unions, said that the statements are very acceptable. I simultaneously thought of a cartoon which appeared in the Australian of the same date. It depicted Mr Hawke looking at a railway engine which ought to be marked ‘Labor’. Broken down, derelict, unable to pass the crossings or proceed further on the permanent way. It had Mr Hawke making this statement to Mr Fraser. ‘I’d give you a hand, mate, only I would be wasting my time; there is a national rail strike now on’. He might have added these words: ‘And you haven’t yet overcome the problems created by my predecessor in the leadership’. He would be referring to Mr Whitlam.
What are the national tasks that are immediately ahead of this Government which flow from the performance of its predecessor? We have got to repair the damage done by 3 years of Labor Government; 3 years of unparalleled damage that no one could ever have anticipated and which we all hoped would not in fact occur when Labor took office in 1972. First of all, we have to try to establish the essential conditions of national growth. I think, and I believe very deeply, that with sound government of the kind that is now being provided, we can get that growth again to go to a rate of 5.5 percent, which was the average during 10 years of former Liberal-Country Party governments. The Minister for Employment and Industrial Relations (Mr Street) has stated that we want, if we can get it, an inflation rate of no more than 7.5 per cent next financial year. In other words, the Government recognises that in the case of a country like ours- a great trading country- we cannot get out of step m inflationary terms with our trading partners or we will cost ourselves out of the international markets, cost ourselves out of production, and therefore cost ourselves out of increased employment.
I turn to other things that have to be done. Of course, we accept the fact that unemployment created by Labor- an estimated 270 000 unemployed- has to be reduced. I remember that when the present Treasurer was the Minister for Labor we had unemployment down by diligent effort to 88 000, according to the published figures, and it was reduced even further, in seasonally adjusted terms, for the succeeding 5 months. We want to restore confidence, and in doing so we want to make certain that investment increases, that business solvency and recovery are achieved, particularly in manufacturing industries and in building and construction.
Let me look at the prelude, if I can call it that, to the Budget. First of all our changed policies were adumbrated by the Prime Minister and then filled in in detail by the Treasurer. Our income tax indexation scheme will expand the tax grouping and will result in a reduction in income tax paid of something like 13 per cent. It will mean there will be a cost to the Budget or a loss to revenue of $ 1,050m in 1976-77. That, I should state, is an estimate or forecast of forward estimates for 1976-77. 1 point out that one of the changes that has been introduced and that the Labor Party ought to be saying something pleasant about is that for a single person there is the taxation threshold of $2,604 and for a man with a dependent spouse $4,299 before any tax is paid. Government forward expenditure has been cut from $4,700m by $2,600m to $2, 100m. That is a cut in expenditure- not the deficit, which is about $ 100m more.
I turn to the third element, namely, child endowment. I do not think there is a person who does not welcome the change. Any person who has a regard for children and a love of family will desire to ensure that the mother will have a better opportunity to feed, clothe, entertain and ensure the recreation of her children. We were told by the Treasurer that more than 300 000 families and 800 000 people will benefit from that measure alone. Yet we hear the contemptible statement of the former Prime Minister, now the temporary Leader of the Opposition, that he does not believe that anyone will benefit from the changes made in the proposals. He implies that he does not believe in the women of this country; he does not believe in the kiddies except one whom he got promoted in an electoral division with the help of Mr Fred Daly.
I want to look at the forward estimates because I think that this is one of our great problems. The Government rightly has not stated what it believes the forward estimates will reveal in terms of a financial deficit in 1976-77. It has not done what the former Labor Treasurer said that it should do. That is, to disclose the estimates of revenue itself. I am glad it has not done so, because everyone ought to know, and above all the former Treasurer ought to know, that one does not reveal those figures unless he is reasonably certain of what the amount is likely to be. The honourable member was able to turn an estimated deficit at Budget time of $2,960m into a deficit of $4,200m. This deficit, but for the actions of the Fraser Government, would have been between $5,000m and $6,000m. Under the circumstances can we take any notice of a man like the honourable member for Oxley? That deficit of $4,200m is after the deduction of Australian savings bonds of well over $1,1 00m. Can we take any notice of that. Can we take any notice of a man who forecast in his one and only Budget that there would be a 22 per cent rise in wages- it is now running at about 1 1 per cent- a 5 per cent increase in gross national productrunning at a negative rate- that employment would rise by 1 per cent- in fact it is falling- and that all the other assumptions as set out in table 2 of the Budget would be achieved? No, sir. If ever there was a failure after Cairns and Crean it was he. I place him at the top of the list of failures or rather at the bottom of the list of failures.
-What about you, Bill?
– At least I stayed in my Treasury portfolio for 4 years and did very well. I now come to this: I ask everyone who can analyse what are the likely effects of changes in policy in these 2 statements as a prelude to the Budget. No one can doubt that there will be a diversion of funds or spending power from various groups in the middle income and the upper income brackets into the pockets of the less well off groups, particularly the mothers. There is no doubt that there must be a stimulatory effect on consumption expenditure, not in the white goods it is true, but on food, clothing, entertainment and recreation, as I mentioned a few moments ago. No one can deny either that supplementary to this- and I have not heard this mentioned before by anyone, including members of my own Party- is in fact that housing is booming today. As houses are commenced and completed there can be no doubt that there will be a substantial increase in the purchase of the white goods section of Australian manufacturerefrigerators, washing machines and any sort of equipment that goes into homes, including radio and television. We have to remember also that supplementary to those policy changes there is already an investment allowance of 40 per cent with double depreciation. I believe that these policies in combination create part of the conditions under which we can hope for an increasing consumption expenditure with a multiplier effect and by means of the increase in consumption expenditure to ensure increases in the order books, then to the factories and then into employment. I believe that we achieve more than that, because under the present provisions, particularly with regard to the indexation of wages and income tax supplementary to an increase in wages and child endowment increases, we have established the proper basis on which we can now approach the trade union movement in order to ensure that the unions are persuaded to come to the party and agree to an incomes policy and, more particularly, a responsible wages policy.
I believe that the Prime Minister and the Cabinet were right in agreeing to take action to make reforms to the secret ballot legislation because this provides the opportunity and the bargaining power to handle the most serious problem that faces this country today. That most serious problem relates to wages in excess of productivity. This does not complete the story but at least it does present the foundation on which, with sensible, reasonable discussions with the trade union movement we can hope- and we have good grounds for hoping- that we can get a sensible and proper response in the best interests of this country. I have not lost confidence in the trade union movement. I believe that there are more leaders in the trade union movement generally with common sense and goodwill than one would gather from the actions and statements of the Australian Metalworkers’ Union, the transport union and the building unions. I believe that there is a prospect- a little prospect perhaps, but growing into a bigger one as the days go by- that those wise men in the trade union movement will help the Government to succeed in achieving goals that will improve the national development of this country and the welfare of most Australian people.
– I have 2 reasons for making this response to the statement of the Treasurer (Mr Lynch). As the former Minister for Urban and Regional Development I must say that my special area of concern has taken the heaviest blows from the so-called ‘expenditure cuts’. The communities concerned with the quality of life in the suburbs were sufficiently large in 1972 and again in 1974 to place and to keep a Labor government in office. I, and my colleagues, were and continue to be deeply committed to the goal of a better life for the ordinary people in Australia. When in office we attracted a number of skilled and dedicated people to plan and implement our government programs.
In the area of urban and regional development we managed to bridge the gap between government and the people. The community, for the first time, was consulted in a regular way. Some provision was being made for people and for the future life of our communities. Now in a bloodyminded way this Government has hacked all those programs to pieces. It has not escaped the attention of thinking people in this country that the main reason for this savage attack on the Department of Urban and Regional Development is petty, high-handed revenge by the LiberalNational Country Party Government on concepts and efforts that were basically good for the Australian people.
Dear as Labor’s urban and regional programs are to my heart my second reason for responding to the Lynch Budget statement is probably the most important. That is this: That I see in the attitudes, the activities and the statements of this Government, such as the one last Thursday, a fundamental, arrogant and aggressive attitude to the ordinary people of Australia- those people whose interests the Australian Labor Party represents. Specifically I take the cornerstone of the Liberal-National Country Party Government economic policy- that is, that real wages must fall so that new investments can take place- to be an unnecessarily harsh attack on the interests of all people who rely on wages and salaries to provide for, and maintain, their standard of living. I have to hand it to this Government; it has made a very clever effort at clouding its intentions to the man in the street.
The Treasurer says that he has managed a very significant cut of $2.6 billion in government expenditure for 1976-77. But it is difficult for the ordinary voter to understand that this cut is not some very skilled saving of taxpayers’ money that would otherwise have been spent or ‘wasted’, as the Treasurer seems to equate the 2 words. No, this much publicised cut is from the forward estimates from the preliminary and rough projections for 1976-77 that are a normal early step in drawing up a Budget. It is almost as if the Treasurer has just discovered what the procedures for Budget construction are. The Treasurer has cut $2.6 billion from a very rough forecast figure. A figure that is ‘secret’ because of Treasury’s refusal to release it, and given the sly behaviour of the Liberal-Country Party Government in the past, quite possibly a fictitious and unnecessarily inflated figure into the bargain. If this Government is trying to talk up business and consumer confidence it will have to try something a little less transparent the next time.
The so-called mini Budget has been presented to the man in the street as some great advance in welfare. At this point I must say that I am pleased at the implementation of one of the recommendations of the Henderson report on poverty. Some relief is provided to the suffering of the poorest families in our community, particularly by a measure directed at the children of poor families and is deserving of support. The only trouble is that the rest of the package combined with this Government’s policies for the reduction of real wages and the maintenance of high levels of unemployment in order to temper wage claims will guarantee that more and more families and more single people, both old and young, will be sucked down below the poverty line.
The package presented to the wage earnerthe plus items of wage indexation and increased endowment, combined with the minus of the Medibank levy and the loss of deductibility for children- was presented as a ‘sensible policy’ that would add to his, the wage earner’s, welfare. Yet from the Treasury minutes published in the Age newspaper, the Government knew that 57 per cent of taxpayers would be worse off as a result of the measures announced last Thursday night. Let us take this 57 per cent and work from there. Many of the other 43 per cent of wage and salary earners will also be worse off in 12 months time, if their incomes after tax do not increase by at least the same rate as the consumer prices including indirect taxes.
Under the arrangements worked out by the Labor Government wage indexation guaranteed that growth wages would go up in line with prices. Net wages were eroded to some extent by taxation but amounts still close to the real wage were maintained and employers became familiar with the principle that their wage bill would go up by an amount sufficient to compensate workers for price rises. Now we are on the brink of shattering that understanding. The Fraser Government has not introduced tax indexation out of any concern for the workers’ tax bill. The Prime Minister has introduced it as one convenient part of a plan to break wage indexation and thereby ensures that the real wages of wage and salary earners is more quickly eroded.
To the 57 per cent who were directly worse off as a result of last Thursday night, plus the great bulk who will also lose out when wage indexation is busted, we have to add those who will lose out by the now widely anticipated rise in indirect taxes. The Federal Government looks odds on to increase indirect taxes in order to balance the Budget in August. Also, since Mr Fraser ‘s federalism basically means ‘squeeze the States’, it seems certain that the States will have to increase their indirect taxes simply to maintain on-going programs. Any of the wage and salary earners who have escaped so far have also to consider whether they have a mortgage on their home or hire purchase commitments because the inevitable outcome of the coalition’s approach to economic management is that interest rates will rise. Also, these people have to remember that the Labor Government’s scheme of making interest rates on housing loans tax deductible has been abandoned by Mr Fraser’s economic managers.
There are around 88 per cent of taxpayers on less than $240 a week. Around 98 per cent are on less than $300 a week. This vast bulk of the people who do the work in our economy will lose out directly, in terms of their incomes and what they can buy with them, as a result of the Fraser Government’s economic strategy. On top of this there is an extra indirect loss. Because the provision of certain public goods adds to the ordinary persons standard of living, the pattern of cuts in government spending announced on Thursday night will mean maximum losses of public services to the ordinary man and woman. An extra ship in the defence budget or the gross and anti-egalitarian hand outs of superphosphate bounties did nothing to improve the suburban families’ standard of living. The massive cuts in expenditure on sewerage, the shutting down of community health centres, the dismantling of Medibank certainly have reduced their standard of living- reduced the standard of living of the majority of Australians. The costs to the vast majority of the people of this Government’s economic policies and philosophies is very high.
Now let us look at who benefits. Take, for example, the tax indexation and the Government s wages policies. The combined effect of these measures is a 2-fold Governmentorchestrated benefit to the private profit sector of the economy. The Fraser Government provided tax indexation so that the employees’ wage demands can be cast aside. In effect, the Government pays, in the form of revenue foregone, part of the wage and salary earners’ justified incomes increases in 1976-77. This is not to help the employee, but it is to help the employer, at a cost to government revenue. Then, the Government intervenes in the wages case, and makes the case for breaking wage indexation on the grounds that it, the Government, has provided tax relief. If that case is successful, the employers again benefit, their wages bills do not rise in line with prices and the employees take the loss. The result- and this is the whole point of this Government’s attitude- is that the private sector profits. When we really look at the Government policy intentions, we can see that those intentions make a mockery of the Prime Minister’s claims that his Government is working for the well-being of all Australians. Such claims are becoming as transparent as his attempts to talk up business confidence.
I will go so far as to offer a little advice. This Government should begin to treat the people of this country who sell their labour, if they can, to earn a living, with somewhat more respect. It should credit them with some more sense than it does at present. It should be somewhat more honest in its dealing with them. After all, 88 per cent of them rely on less than $240 per week to live. These are the people who will be hardest hit by the indirect losses brought about by the Government’s economic package. These are the people whose standard of living will drop because the Fraser Government has ceased to provide important public services to the community.
The Department of Urban and Regional Development was widely recognised as the vehicle for the Labor Government’s concern with the quality of life and the provision of public services. The attack on the programs aimed at improving the quality of life amounts to no more than another attack on real wages. Real wages equate with living standards. Real wages are not just made up of money in the pay packet; an important element is provided by the quality of life enjoyed by people. The cut backs announced last week in sewerage programs, in growth centres, in land commissions, in area improvement programs to local government, in transport, in the preservation of the National Estate mean that the Fraser Government is abdicating its responsibility to most Australians.
These cut backs mean that the Fraser Government has contracted out of improving the quality of life in our major cities. It has turned its back on 85 per cent of Australia’s population. This was done in the name of Fraser s federalism. Fraser’s federalism is a policy which makes less money available to the States. It is a policy which says that the responsibility for cities, for transport, for sewerage, for the supply of serviced urban land and urban improvement lies with the States and local government. It is a policy which says to the States and local government: ‘If you want to improve the urban environment, pay for it yourself. It is a policy which means that the States will have to increase indirect taxes, or charge a surtax on personal income tax. It will mean that sewerage and water rates will rise, that local government rates will rise and that motor vehicle registration costs will increase. This will happen all because the Fraser Government has opted out of the Federal system. The consequences of this will be enormous.
The Fraser Government and its federalism has returned Australia to the 1950s and the 1960s. All this adds up to a lowering of living standards- an attack on our environment and real wages. Because there has been a major cutback by the Government on public works there will be a substantial increase in unemployment. I dare to say that by early next year the number of unemployed people in this country will be in excess of 500 000. We have not seen such unemployment since the end of the Second World War. That is the policy that this Government has put down and that is the policy of Fraser’s federalism.
Mr DEPUTY SPEAKER (Mr Drummond)Order! The honourable member’s time has expired.
– Having just listened to the prophet of doom- the Deputy Leader of the Opposition (Mr Uren)- I feel that I should commence on a brighter note. I believe that, because of the Government’s policy, next year unemployment will be reduced very substantially. I remember one of the Ministers in the former Australian Labor Party Government saying that he would resign when the number reached 250 000, but he did not do that. The policy of the former Labor Government was one of the reasons for unemployment being at the level we see today. In this debate the Leader of the Opposition (Mr E. G. Whitlam) said that one of the problems in the country today was the Government’s failure to spend. Certainly that could not be said of the Whitlam Government. It was that Government’s failure to recognise that there is a limit to the amount of money that a government can spend and at the same time retain a sound economic structure that caused many of the economic problems we face today.
One outstanding feature of the proposals contained in the economic statement of the Treasurer (Mr Lynch) is that the next Budget deficit will be very substantially reduced without undue hardship on any section of the community. That is a splendid achievement by the Treasurer and by the Government. Its implementation should mean that we are on the way back to sound management of our national economy and that, as a result, we should be able to look forward to a reduction in inflation and a reduction in unemployment with a return to a soundly based national prosperity. That is the objective of the Government and this program is a very substantial step towards that goal. However, if these proposals are to be fully effective there will need to be a responsible attitude to profits by business organisations and employers generally as well as a responsible attitude to wage demands by unions. I say that not because I do not accept the fact that reasonable profits have to be made and reserves built up to tide businesses over difficult times, but in these special circumstances I believe that it is encumbent upon every section of the community to adopt a very responsible attitude towards trying to achieve a more stable economy than that which we have at the present time.
The Government has given a splendid opportunity through these proposals for these major sections of the community to work together with the Government for the common good of all Australians by providing an economic program which is vitally concerned with social justice in conjunction with sound economic management. The Australian community should think about that fairly clearly. Inflation has seriously and adversely affected all sections of the community but in no area has it been more severely felt than in the area of the low income group and disadvantaged families. Indeed the Henderson Report on Poverty shows that those who suffer most from inflation and unemployment are the poor. That is a fairly obvious fact.
It has become increasingly obvious that the system of taxation rebates was of little benefit to families whose taxation was either at a very low level or even non-existent. This redistribution of social welfare assistance will not be as costly to the community as many people may think. It is estimated to cost something over $ 1,000m in the first year, but that will be offset by a saving of some $900m by the abolition of the rebate system. It has been estimated that about 70 per cent of taxpayers do not claim rebates for dependent children, so their take home pay will not be affected. While tax rebates for dependent children have been abolished, the rebates for a dependent wife, housekeeper and daughterhousekeeper have been raised by 25 per cent from $400 to $500. In the light of the steeply increased cost of living, this is a well deserved increase for which the Government should be commended.
To sum up, it means that the new approach to social welfare will go where the need is greatestthat is, to the lower income group and to the disadvantaged. In this way it is much more effective and much more equitable than any single social welfare measure introduced by the former Labor Government, despite the fact that that Government claimed a great deal of credit for what it did in this direction. This measure provides the complete answer to those people who are constantly claiming, without any foundation, that this Government is concerned only with the people in the higher income bracket. It proves conclusively that this Government has a better understanding of the needs of the poorer people than the previous Labor Government had, and that this Government is prepared to back that understanding with action.
Some concern has been expressed about the proposals relating to Medibank. I have found this in my home State of Queensland where people have enjoyed free medical attention and free hospitalisation in public hospitals over many years. Those who wanted to insure to enable them to go into an intermediate ward or a private room and to have the doctor of their choice had available to them the privately run organisations. These people are somewhat concerned about what it will cost them under the new scheme. I believe that there is some general confusion in relation to that matter. Therefore I think that people should not make a judgment on this matter in a hurry until the details of the proposals are known and understood so that individuals can then work out for themselves what they want to do under the new proposals and what it will cost them.
One essential feature is that no one will be forced out of Medibank whatever their income level. That is something which has been suggested in this chamber. The Opposition has said that the proposed scheme will divide the community into 2 sections. No one will be forced out of Medibank unless he desires to leave it. So it must be remembered that the scheme does apply universally. Some people may prefer to obtain insurance through a private fund instead of through Medibank but that will be their decision when all the details are known to them. It is important to note that those on the lowest incomes, including pensioners, will receive Medibank benefits free of charge. Two-income families will not be forced to pay 2 levies. It may be cheaper for them to do that. If they decide to pay insurance premiums that will be their decision. It should be emphasised that the choice will be their own. Therefore I believe it is important that they should wait until they are fully acquainted with all the details before they make that decision. It is noted that there will be no tax rebate for health insurance premiums. The new Medibank scheme will operate from 1 October, so people will have time to wait for the full details before making a decision.
I warmly welcome the personal income tax indexation proposal in the statement. One of the causes of continually increasing inflation has been that when wage increases have been applied to cover increased costs of living or for any other purpose, the wage increase has had to take into consideration the greatly increased taxation that would apply to the individual when the wage increase was granted. Tax indexation is designed to lessen greatly the amount of wage increases needed to provide a specified increase in the take home pay. Because of the beneficial effects on inflation of personal income tax indexation there will be an inbuilt protection for the value of future wage rises and there will be a protection of the value of savings that have been made down the years to the extent that inflation has been eating away at the value of those savings at a completely unacceptable rate. It is worth noting too that tax indexation will be providing increased financial benefits for the taxpayer year after year. Under the new scheme it is proposed that indexation adjustments will be automatic every year. The extent of the indexation will be determined by the rate of inflation over the previous 12 months.
A very good feature of these proposals is that in future tax increases can be made only by legislation, which will require the Government to introduce a Bill into Parliament and have a debate on the proposed increase. It will allow the Parliament to debate the need for the increased taxation, and the parliamentary representatives of the people from all over Australia will be able to present a case if they so desire against the increase or against the extent of the increase. This will bring, to this extent at any rate, honesty in Government operations and, goodness knows, looking at the record of the last Labor Government it is high time that we took all steps that can be taken to keep any Government of this country as honest as the Parliament can make it.
The Government is to be warmly commended on its decision to introduce full tax indexation on 1 July in addition to the 25 per cent increase in the tax rebate for a dependent spouse, housekeeper or daughter-housekeeper which I mentioned previously. There is also an increase by $150 to $350 in the single parent rebate. In both these instances the increases will be warmly welcomed. They are justly deserved. To obtain the full advantage of tax indexation I believe it will be necessary for all sections of the community to act with restraint in an endeavour to bring the full benefits of these proposals into operation. I hope this will be done by the community at large. If all sections of the community are prepared to work in this way to reduce inflation it can be reduced very substantially indeed. The Government recognises the need for restraint and has itself been active in the direction of reducing government expenditure where it is practical to do so. Of course, it is a great temptation for .a government not to do that because people are clamouring for expenditure everywhere. Governments are tempted to meet the demands of the community at large.
Despite the Government’s recognition of the vital importance of reducing the completely unacceptable size of the deficit which could have eventuated as a result of Labor policy, it should be noted that in some areas the Government has been sympathetic and understanding in relation to expenditure. I refer to the areas of education and social security as examples of the Government’s understanding. Despite this, it looks as if the forward estimates will be cut by approximately $2,600m and that is a tremendous effort on the part of the Government in its endeavour to achieve financial stability. In the field of social security no changes are to be made to the existing arrangements relating to age pensions and allowances, invalid pensions and sheltered employment allowances. Again this demonstrates the Government’s sympathy for these people most in need of the Government’s assistance.
The Government is also embarking on a 3-year program which will cost some $225m to finance the backlog of aged persons accommodation applications. That expenditure will- I must add this in all fairness- be limited to $45 m in 1976-77. There is a very great need in this area and this is recognised within the community. In my own area 2 aged persons homes have been built in recent times. I am very happy to see that the Government is making an effort to catch up with the backlog in this area. An amount of $140m will be available to local government authorities in 1976-77, and as someone has said, this will be available shortly so there will be a lot more done if we can get the finance. People within the community have done a tremendous job in this area. That amount of $ 140m which will be available to local government authorities in untied general revenue assistance represents a 75 per cent increase. This is another area that has been badly treated over the years and to which the Government is giving full consideration.
It has been suggested that 2 per cent of personal income tax should be made available to local government. As I understand that, this was going to be done. I hope that this does come about because local government does need it. In the area of local government, the authorities have had to keep on borrowing money to fulfil their obligations and they are in pretty difficult financial circumstances at the present time. It is high time efforts were made to relieve them of some of this burden.
There will be a marked increase in defence expenditure. Surely there would be no one who would fail to realise that unless we have the capacity to defend our country we are running the risk of losing it. Unless we are able to provide for the security of Australia then all the other things we are doing will be for nought. So I welcome the increase in defence expenditure, some details of which were given today.
I believe that the Australian people must be brought face to face with the fact that we have been living beyond our means and that no individual, no business and no nation can continue to do that without coming to a day of reckoning. It is very fortunate that we have had a change of government because it will enable the present Government to apply those measures which will bring us back from what could have been complete financial chaos and could have resulted in a disastrous reduction in the value of the Australian dollar. I believe that the Australian media have been ungenerous in its approach to the economic policies put forward in the Treasurer’s statement. For example, in one headline blazoned across a newspaper, or perhaps in more than one newspaper- this was mentioned here today- it was said that some 57 per cent of the people would be worse off under the Government’s proposals. The newspaper did not say that 43 per cent- even on its own figures; and they may not be correct- would at least be as well or better off under the Government’s proposals than they were before. There has been a splendid effort when one considers the total effort of the Government to restore financial stability to this country.
Order! The honourable member’s time has expired.
-The con text in which this economic statement which we are now debating was brought before this House was certainly not as a culmination of 6 months of successful management of the economy by the Government. Quite the opposite in fact. This statement was made after 6V2 months of office in which this Government had not only not brought about a recovery but had stifled the recovery which was underway at the time it took office. In the period that it has been in office we have seen not a reduction in unemployment levels but in fact an increase over the last couple of months. Unemployment was falling when this Government came to power. It fell during the 4 months after October, but in the last couple of months for which the figures are available it has in fact increased, that is taking unemployment on a seasonally adjusted basis excluding school leavers which is the figure the Australian Statistician says one should take. Inflationwise there has been no sign whatever of any substantial reduction in the rate of inflation. So on these 2 key indicators we can see there has been no remarkable effort by this Government- a government which came to power on the basis that the Labor Party could not manage this country and that it would be able to get the economy back on its feet, turn on the lights and all that sort of thing. The fact is that it has not turned on the lights. It has not put the economy back on its feet in those 6V2 months.
The reason this statement comes before the House now is that the Government is being pressured by businessmen and others to do something to get the economy going. That is why this statement is being made. It is not just one more event along the line; it is a special event brought about by the pressures on the Government to do something to try to get the economy moving again because it has not succeeded in doing it so far.
The objectives of the package as they are outlined by the Treasurer (Mr Lynch) are twofold in my view. Firstly, to reduce the size of the public sector. That is said to be necessary to give the private sector room to expand and also to reduce inflation. The second objective is to provide the basis on which to reach agreement with the unions regarding wage moderation- again to try to reduce inflation. In my view, and in the view of the Opposition, it is highly unlikely, for various reasons, that either objective will be achieved. The Government’s decision to reduce the public sector when the economy is in a recession is a desperate gamble and I think everyone in this country should realise that. This is not a sound economic policy based on solid economic forethought or analysis. It is a desperate gamble- a dangerous gamble at least -because it depends solely on an event over which this Government has no direct control. It depends entirely for its success on the consumers of this country deciding to spend more money because by reducing Government expenditure the Government is taking out of the economy expenditure on goods and services thereby reducing demand for all the various products which are produced in this country, and the only way in which that cannot lead to higher unemployment and more recession, less economic growth and so on, is for people to start spending more money.
So the Government is gambling on that happening. If it does not happen, then we are going to go into a far worse recession than we are in at the present time and have been in for the last year or so.
I think there can be little doubt that reducing government expenditure will accentuate the recession. The fact is that for this financial year, which has almost ended, government expenditure increased by 22 per cent. Under the Budget proposals put forward last Thursday night by the Treasurer government expenditure increases will be something of the order of 1 1 per cent which is a very substantial reduction. Indeed, given that the rate of inflation is now running at something like 12 per cent, and there is not likely to be any immediate substantial reduction in that rate, it seems likely that there will be no real increase in the rate of Government expenditure in 1976-77. So that is a very substantial change from the previous year. It is a substantial withdrawal of demand in the economy which must be made up somehow if we are not to have more recession. Secondly, the cutback in government expenditure undermines the confidence of consumers and investment. Confidence is something which I think we all agree is quite important. I refer to an article produced in the British PEP publication in February this year by the Oxford economist Santosh Mukherjee. I think it is an important article. Talking of the importance of confidence to recovery, he said:
Yet, in the words of the Secretary-General of the OECD ‘Confidence is unlikely to improve if unemployment goes on rising and unless reasonably clear signs of recovery begin to emerge’. Cutbacks of public expenditure before recovery has firmly set in would undermine rather than help to get European economies on the move again, and if the incipient upswing falters, governments must be ready to restimulate demand.
He is saying that it is highly dangerous to cut back government expenditure before the recovery has begun. No one in this country could argue sensibly that recovery has begun now. There are some signs that one might be on the way despite the efforts of this Government to this time, but no one could argue that a solid, sound recovery was under way now. So it is a dangerous thing, as the article from which I quoted mentioned, to cut back public expenditure.
As I have said, the Government assumes that consumers will increase their spending, but there are various reasons why this is unlikely to occur. Firstly, there is the recessionary environment which is created by the withdrawal of government expenditure, the factor to which Mr
Mukherjee referred. When there is more unemployment, people are unlikely to cease squirreling, or salting away their money rather than spending it. It is generally accepted that the reason people have increased their rate of saving in the last couple of years is the much higher rates of inflation and unemployment we have been experiencing in this country. Even if there were some cutbacks in the rate of inflation, if unemployment became higher people would still be likely to save their money, and we would not get the increase in consumer demand which would be necessary to get into the recovery stage. People would still be saving.
Secondly, many wage earners will be worse off as a result of the package. At the point of implementation of the package, that is, when tax indexation is introduced and we have the Medibank levy and the child endowment and dependent children’s tax rebate manoeuvre, a lot of people will be worse off. It has been said that 57 per cent of wage earners will be much worse off. Admittedly, most of them will not be much worse off but there has not been an increase in their welfare. I think it is illusionary just to look at the point of implementation. The point is that tax indexation is not a tax cut. Tax indexation simply means that the Government no longer increases the proportion of a person’s income that it takes in tax. It is not a tax cut in the sense of reducing the proportion of income one pays in tax. It is simply a means of ensuring that the tax burden does not increase. So over time people will be worse off because tax indexation is only a tax cut if their income does not go up. If their income goes up in line with the tax indexation formula and inflation it will not be a tax cut. It will simply mean that they will not have a tax increase. But the Medibank levy is a tax increase, which means that people will be paying a higher proportion of their income in tax. So there will not be a tax saving as a result of these measures. It was said originally that 57 per cent of people would be worse off at the point of implementation but, taken over the whole year, a vast majority of wage and salary earners will be worse off because they will be paying the Medibank levy in addition to having tax indexation. This is an important point in terms of whether they will increase their rate of expenditure or save. If they are worse off they are unlikely to increase their rate of expenditure.
We must not lose sight of the fact that the tax deductions on mortgage interest payments have been abolished. A lot of people will be paying more tax because of this and therefore they will have no incentive to spend more money. The increase in child endowment and the abolition of the tax rebates for children mean that families will have less cash in their pay envelopes. They may have more money in the bank but it will go straight into a savings account. It will not be in their hands in cash and in that circumstance it seems to me rather likely that there will be a tendency for savings as a proportion of income to increase rather than to be reduced. Furthermore, the tax deduction for private health insurance payments is to be abolished. This will mean that people who now itemise their private health insurance payments and claim more than the current block deduction of $540 to get a tax rebate will not be able to do that any more. They will be paying more tax.
Taxpayers will also be worse off than it appears at present because there will be an increase in State government taxes and charges. Everyone acknowledges that the States will have to carry a bigger burden. Therefore they will increase their taxes and charges and people will be worse off. Furthermore, there is the possiblity of increases in direct taxes in the next Federal Budget. The Government has not said that it will not increase indirect taxes in the Budget. Indeed, the Budget deficit which one can work out from the statement made by the Treasurer last Thursday night will be over $3,000m. If the Government is to reduce that figure to any degree- there is some suggestion from Treasury leaks and so on that it ought- it would mean an increase in indirect taxes, given that most other aspects of reducing the deficit are tied up and given that the Government will not cut expenditure any more or increase income tax or company tax. The only thing left is to increase indirect taxes and if that happens there will be less money in wage earners’ pockets and therefore less incentive to increase their rate of expenditure, particularly as the Government has argued that such indirect tax increases should not be passed on by the Australian Conciliation and Arbitration Commission in the form of wage indexation.
While the Prime Minister (Mr Malcolm Fraser) is telling people to spend, his Government is encouraging savings. It is doing this in 2 ways. Firstly, it is doing it through the Australian savings bonds, which have taken over $ 1,000m this year and which are still taking savings. Undoubtedly they are an incentive for people to save rather than to spend. The rate of interest is still relatively attractive. The introduction of the homes savings grant scheme is another incentive for people to save to get the maximum grant. Clearly, there are many reasons for assuming that consumers will not increase their spending.
In fact, there are a lot of reasons for thinking that they might be persuaded to reduce their spending somewhat.
All this is based on the Government’s ideological hangups about the size of the government sector and the size of the deficit. Previous speakers from the Opposition have made the point that the size of the deficit is not related to the rate of inflation. Indeed, we have shown in previous debates that there is no correlation between countries which have a large deficit and high rates of inflation, nor is there any correlation between countries having a large government sector and high rates of inflation. One can get almost the opposite picture by looking at the statistics. One of the motivating factors is an ideological factor rather than an economic factoran ideological hangup about the large government sector. In fact, the Australian government sector is not large. Compared with most other countries it is a small sector. Figures published by the Organisation for Economic Cooperation and Development last year showed that of the 24 OECD countries the government sector in Australia was the sixth lowest. Yet, by the way that the Prime Minister talks and the way that the Government is acting, one would think that Australia was near the top. Most countries, including the United States of America, have a much bigger public sector than we have.
Another factor I refer to is the second objective of the package; that is, providing a basis upon which the Government can get co-operation with the unions to reduce the rate of increase of money wages. This has been given great importance by the Prime Minister but it is highly unlikely in the Opposition’s view that the package presented by the Treasurer on Thursday night will enable such co-operation to be obtained. There are various reasons for that. Firstly, while attacking wage indexation and arguing for reduced real wages, the Government gives most workers little, if anything, by its recent measures. The Government is arguing for wage indexation on a basis which means real reductions in wages for all workers earning more than the minimum wage. It is arguing that full indexation should apply only to the minimum wage and above that all workers would get a reduction in their real wage. They would get the flat money sum which would be obtained by applying the indexation factor to the minimum wage; this means, therefore, reductions in real wages for all workers. That is a basic element of the Government’s policy at this stage. Yet, whilst trying to get the union leaders to co-operate the package gives them absolutely no reason to say to their members: ‘Look, you have something from the Government- big tax cuts’. There are no big tax cuts. There are tax increases. In the main, wage and salary earners will be overwhelmingly worse off by this package. There is nothing in the package which gives the unions reason to say to their members: ‘Let us co-operate with the Government. Let us cop reduced real wages. We will get it back in tax cuts’. The unions will not get reduced taxes from this package. In the United States of America and in the United Kingdom, where attempts have been made to get trade union co-operation, the governments have gone out of their way to make big tax cuts and have tried to give the unions something to hang on to. They have said to the unions: ‘You can get what you have lost back another way’. But that is not happening in this country.
Also what the Government gains in goodwill by introducing tax indexation- a basic union objective- it loses completely and utterly by the Medibank levy, not just because of the cash but also because of the conceptual factor. Medibank is something which unions appreciated and wanted and they are upset about the attacks on it which have been launched by this Government. It is not just the cash; it is the conceptual aspect as well. The Government has paid no attention to selective employment programs. It is running down the National Employment and Training scheme. It is giving no more money to apprenticeship schemes. It is having nothing to do with schemes like the Regional Employment Development scheme. It is showing no interest in looking after jobs.
Mr DEPUTY SPEAKER (Mr Drummond)Order! The honourable member’s time has expired.
– I have been fascinated by the speech of the honourable member for Gellibrand (Mr Willis). He has made 4 propositions, each of which needs to be explained.
– Very fast too.
– He rambled on very quickly. He was very nervous. In the first place nobody on the Government side says and no sensible person says that a deficit is of its nature a bad thing. Nobody with any sense says that. What has been said and what I have said over and over again is simply this: It is an absolute tragedy that Australia’s economy was so underutilised that the Government, which is now the Opposition, had to plunge this country into a deficit of over $4,000m. The size of that deficit is a reflection of the size of the failure of the previous Government to have the economy operating at full employment level. That is a fair definition of what a deficit is about.
The second point the honourable member makes is that he is not worried about the size of the government sector. He was overconcerned I was fascinated with this overconcern to say all the time that the tax indexation proposition, so strongly supported by the honourable member for Mackellar (Mr Wentworth) and myself in the Liberal Party, is not really a reduction in tax rates. A Bill before Parliament is designed to bring in tax indexation. It involves a reduction in effective tax rates by 1 3 per cent. It does that by changing the tax brackets. If one lives in a continuum in terms of economic experience it means that the proposed rates of tax to be paid after 1 July of this year will be 1 3 per cent below the proposed rates of tax to be paid during June of this year. That is an effective reduction on any simple common sense analysis of the proposition.
Let us look at the other side of the argument. A few months ago the Opposition, when in government, was arguing that it could not introduce tax indexation. Members of the Labor Party said they could only go a certain way towards introducing it. They said that they might look at it. Their proposition would have amounted to $395m. They said they could not introduce tax indexation because it would reduce revenue too much. They were saying that they could not give tax cuts of that size. That was the argument a few months ago in 1975. The fourth point made by the honourable member is another fascinating one. He was saying that the transferring of some tax rebates and other funds to family allowances means that money is more likely to be saved than to be spent. Anybody knows, and the honourable member for Melbourne Ports (Mr Crean) has said it over and over again over the years, that the respending coefficient of cash transfers is much higher than the respending coefficient of wages, and the tax rebates represented disposable income in the form of wages. Therefore the honourable member for Gellibrand in 15 minutes made only 4 errors, but each was very significant.
There are those who look at history as they look at a scroll. They see history over a long period and draw a line and try to compartmentalise one period from another. They look at 1919 and say that what happened then had nothing to do with 1918 and before; that what happened in 1933 had nothing to do with 1932 and before. They say that they will draw a line across 1945 and say that 1946 was a completely new ball game. The Opposition, with this distorted view of history, is trying to draw a line across that scroll as at the end of 1975 and say: ‘Let us forget all that happened in 1975 and before’. I promise the Opposition that it will not be allowed to forget that. It is not only silly politics but also it is a very distorted picture of any reasonable view of history. The Opposition has to live and it must live overall with the economic history which it created.
Sitting suspended from 6 to 8 p.m.
- Mr Deputy Speaker, before the suspension of the sitting for dinner we had an interesting excursion into history. We made it quite clear that we on the Government side would not allow a line to be drawn across the scroll of history concerning the economic performance of the Opposition when it was the Federal Labor Government. We intend to remind the Opposition and remind it again of that performance not only because it is sensible politics but also because our comments are a truthful recitation of what occurred during the 3 years from 1972 to 1975. There is one measure according to which the judgment of a government’s performance has to be made. It is a measure I ave repeated over and over again in this place. It is the measure of the success of a government in achieving full employment for its people. That is the measure which is understood by households. It is the measure which in fact reflects the economic nature of the society in which we live.
All the time that the Opposition was in Government I felt it was committed to full employment, but it was not committed to the other side of the bargain. To use Beveridge’s famous words which revolutionised the Western world, one can attain full employment only in a free society, in a society which is predominantly a private enterprise society, which is predominantly a free enterprise society. It cannot be attained otherwise. So the headlong run into the replacement of private with public expenditure by the Opposition when it was in government represented an ideological commitment. 1 make the point because it is important. To illustrate this crucial and central point, I quote from a journal called the New China News which is put out by Peking China. The issue of 1 9 May states:
No Unemployment in New China
Peking- There is no unemployment in New China. Among the 800 million population even the blind and deaf mutes take pan in work that is within their power under the care of the Party and the State.
Those last live or six words are important because they contradict what should be the aim of any government here, whether it is a government from the Labor Party or the Liberal and National Country Parties. One can obtain free choice and full employment only in a society in which private enterprise is expanding as rapidly as possible. That brings me back to the other point. The central feature of our society -
– ‘Rapidly as possible’ is the big question.
– The Deputy Leader of the Opposition (Mr Uren) might laugh. He produced explanations for the 3 years of Labor Government which resulted only in misery being caused. I was fascinated when he spoke here this afternoon. He said that he regretted what is being done with growth centres, parks and expenditure on all kinds of institutions. He hardly said one word to express regret at what he as a senior Minister had helped to cause in terms of full employment. It is no good having growth centres, parks and free institutions if they run only on the same track as in a country where hundreds of thousands of people are on the dole. That represents the philosophically different position between the Opposition and the Government.
Concerning the package itself, the honourable member for Gellibrand, who is a clever person, attempted to analyse the fiscal aspect. I have great respect for him as a clever person. But he made 4 errors and the nature of those 4 errors were pointed out before the suspension of the sitting for dinner. In total the fiscal package might be mildly deflationary. The positive sides of it in fiscal terms are the change to child endowment, tax indexation- which is one of the most important changes ever introduced in Australia- and, of course, a transfer from the rebate system to a cash transfer system. The negative elements are the fact that government expenditure is not presumed to rise in real terms over the next year and of course some health payments will have to be made. But underlying all of this has to be the proposition that private enterprise needs to expand in these circumstances.
This brings me once again to looking at the position of the Budget deficit. We say that the national deficit, as defined by this Budget, exists in order to cause economic activity to occur. That is a flexible definition. If it can be so organised or financed as to cause more economic activity to occur than would otherwise be the case one changes the nature of the Budget deficit to do so. The Opposition used the Budget deficit in order to make what was predominantly a private enterprise economy into one which became a minority private enterprise economy. There is an economic and an ideological difference between the Opposition and the Government in respect of that matter. The package that the Government has offered is a unique package which has been offered in a country which is trying to bring cost pressures under control. Whenever there was significant inflation in Australia before, or whenever mini budgets were brought in before- in 1 953, 1 956 and in 1 974-the basis of the package was never designed to guarantee disposable dollars to people in order to encourage them to cooperate in the matter of bringing cost inflation under control. They missed. For example, in 1974 when the Opposition was in government it introduced a reduction in tax rates which was significantly less than the reduction which is being made now. So the key of the Government’s program is to try to guarantee disposable dollars in the pockets of those who need the dollars in order to co-operate in the battle against unduly rising cost pressures. In a sentence, that is the way in which we hope that the package will be understood.
The British Prime Minister at present, Sonny Jim, who is a respectable person with a respectable history as a member of Parliament and in terms of his values, has problems with cost pressures but he is not seeking to make an offer which guarantees disposable dollars in the way in which this offer is designed to guarantee them. One cannot dispute the Government’s intentions and motives in that respect. The key of any government’s attitude has to be its attitude towards deficits. In no circumstances can a deficit be allowed to become an absolutely rigid proposition. If it were to become a rigid proposition there are many different ways by which deficits can be financed. By fastening one’s mind on the figures one forgets that a deficit is there for the purpose of generating economic activity. The Opposition used a deficit as an ideological commitment to change the balance and the nature of the Australian economy. It was one which could not deliver Beveridge s proposition of full employment in a free society. The Opposition wanted to socialise the community and to bureaucratise it. That immediately removes half of the sentence which mentions full employment but one also has to consider the nature of society.
Over the previous 3 years the previous Government made all kinds of explanations as to the position it was in. It almost added an explanation daily. But it should be remembered that the Opposition cannibalised the Australian economy over those 3 years. It destroyed its innards and its soul and it did it by its control of public expenditure. Above all, it forgot the balance that needs to be induced in the Australian community in order to get progress. By the introduction of this package the Government is attempting to restore that balance. I believe that it can be put back again. But, above all, those people who have a vested interest in the economy not developing, or who have a vested interest in destroying confidence, are the ones who will do the greatest harm to Australia and to the Australians who are most vulnerable. It is the most vulnerable Australians that the Government has attempted to deal with and to help in terms of the disposable dollar package that I believe it has marketed especially for the benefit of the Conciliation and Arbitration Commission.
Debate (on motion by Mr Nicholls) adjourned.
Debate resumed from 20 May, on motion by Mr Street:
That the Bill be now read a second time.
-The aim of this Bill is to destroy the regional concept of assistance to local government which was carefully built up by the Labor Government. This is implied rather than stated plainly in the second reading speech of the Minister for Employment and Industrial Relations (Mr Street), which fails to put the Government’s much vaunted new federalism policy into any sort of logical framework. Enough has come out of the speech to show that the marked improvements in support for local government made over the past 3 years are about to be destroyed.
I want to commence my remarks by looking at the impact of these changes on the evolving concept of regionalism. Then I want to look at the impact of the Government’s federalism policy on the finances and the functions of local government. The Minister claims that the regional system is artificial and that this artificial system has been imposed on shires and councils against their will. According to this sort of fuzzy thinking the regions are a tool of the evil central government designed to frustrate local government units and deny them the funds that they need. That sort of distortion ignores 2 points. Firstly, there has been a very high degree of acceptance of regionalism by local government. Secondly, the use of regional organisation is by far the most effective way of delivering a large number of Government programs at the community level.
Let me develop those points in turn. There is no doubt that in the initial stages much of local government was sceptical about the sort of regional framework we sought to develop. Each local government unit had become used to working in its own area. It took some vision to accept that there were advantages in joining together on a regional basis. It is also true that much of the previous experience with regionalism had been unfortunate. For example, previous federal governments had worked with some 38 different concepts of regions for the functioning of daytoday government. There were also completely differing sets of regional concepts devised by the State governments. Those regional concepts were reflected in sets of regional boundaries which showed remarkable variations. As a result, local government had to thread its way through a confused and inefficient maze of regions. It is little wonder that the regional concept was unpopular with local government.
We set out to overcome that bad image and to put regionalism on a rational basis. We tried to define sensible groupings of regions which could be used for a whole range of functions and programs by all levels of government. Rather than seeking to impose regions upon the States and local government, we worked very closely with the State and local government authorities in deciding the best regional boundaries. In the great majority of cases those regional groupings were the same as the groupings favoured by the States. Where the regional groupings did not exist, as in some major metropolitan areas, we suggested the boundaries. In the beginning, some States were not happy to apply the groupings in the large cities, but they accepted the regional concept for Grants Commission purposes after dialogue between officials at an AustralianState government level. In no case did we impose a regional grouping which was not acceptable to a State government. Gradually the States came more and more to see the merits of the regional framework and to work within it.
Over the 3 years of the Labor Government there was an increasing acceptance that the regional organisation of councils that we had defined should become the basis for all regional programs and regional administration. Even more encouraging was the marked movement of local government to strong support for regionalism. That was reflected in resolutions passed by local government conferences and in statements by local government spokesmen. There is no doubt in my mind that the majority opinion of local government now favours the use of regions as a planning tool and as a vehicle for program delivery.
In no sense is the regional concept that we sponsored an artificial one. Most of the boundaries for State and local government units are artificial. The logic behind the boundaries of the mainland States and the shires and councils of Australia are lost in the archives. It is not possible to define 75 or so regional boundaries with complete logic, but we tried to bring local government units together in accordance with an identity of interest. That was not always possible, but for the most part the job was done as well as it could have been done. In the purest sense the regions may be artificial, but they are no more artificial than most of our other units of government.
The initial reason for drawing up the regions was our decision to open up the processes of the Grants Commission to local government. By loosely grouping more than 900 shires and councils into 70 or so regions it was possible to evolve a regional framework for the purposes of the Grants Commission. This framework was gradually being extended to our other programs- in particular, the area improvement program and the Regional Employment Development scheme. At the same time we were bringing those regions based on local government units into closer harmony with the regions evolved for the Australian Assistance Plan.
It is no secret that there was some conflict between those two sets of regions. The Australian Assistance Plan was based for the most part on the participation of community groups, and this was resented by local government. On the other side, community groups which felt that they had got nothing out of local government preferred to work through a regional concept based on the community. There was an element of justice in both arguments. One of the great things about the regional approach was the way in which it brought a closer relationship between local government and the level of community participation. Much of the community was alienated from conventional local government.
But the programs of the Labor government for the first time brought the national government down to the community level. The demands of the programs brought local government and the community into a closer working relationship. In many ways that was the greatest achievement of regionalism. It was reflected in the growing awareness that the 2 patterns of regionalism could be reconciled. The Labor Government was also extending the use of the regional concept in other ways. Much work had been done in selecting regional centres where the Australian Government could decentralise and locate its services. A lot of the work of the Coombs Royal Commission on Australian Government Administration was directed towards decentralising the services of government. In particular much progress had been made in the area of switching the delivery points of specific services out of Canberra and out of the State capitals to regional centres.
This was the first step in a planned evolution of administration away from the centre. This process of getting government away from the centre and out to the people has been tragically reversed by the so-called new federalism. The people of Australia should ask: Who are the centralists? Is it the Government which makes a firm commitment to switch public servants and program delivery out of Canberra and out of the capital cities to regional growth centres and to other centres? Or is it the Government which scraps the transfer of Australian public servants and wipes out the programs on which decentralised federalism linking the community with the 3 levels of Government can be based?
The policies of new federalism are strongly centralist policies; I have no doubt about that point. The record shows that our party was anticentralist. The Department of Urban and Regional Development, in particular, was an anti-centralist department and everybody knows it. Whether Mr Hamer or Mr Dunstan is asked one will find that they will stand up and publicly agree with that statement. The 3 years of Labor Government included the most concerted effort in Australian history to reverse the centralist thrust of federalism.This process was hinged on building up an effective basis of regionalism, a process which is abolished by this centralist government with this centralist Bill.
There is no doubt that support for regionalism is growing. I want to refer quickly to just one example for this backing. There are many others but this is one of the most recent. I refer to a telegram from 8 South Australian regions representing more than half of that Stated population. It was sent earlier this year to Senator Greenwood. The telegram asserts the aim of the regional organisations to continue working together because of the value to local government of consolidating on a regional basis. It goes on to list 7 strong reasons for the value of regionalism as a forum for local government to discuss and resolve common problems; as a structure through which general purpose planning may occur; as machinery for delivery of government programs and funds; as a delivery point for regional services; as a means of spreading information; as a means of giving professional help to member councils as they cope with change; and as a means of giving advice to assist federal and State governments in decentralising their functions. AH are strong reasons for the preservation of regionalism. Despite the wide support of local government, this process of voluntary and cooperative regionalism based on groupings of shires and councils is to be destroyed by this Bill.
Three years of painstaking effort to get a regional system working is to be axed at a time when it is plainly successful and welcomed by local government. Now the only statutory basis for regional organisations of shires and councils throughout Australia is to go. This is the first tragedy of this reactionary BUI. The second is the removal of the Grants Commission from the process of local government finance. There is no doubt that this has been a great boon to local government. The Grants Commission has unique experience in the process of equalisation of financial assistance. By opening up this expertise to more than 900 local government units throughout Australia principles of equalisation were applied to local government. The whole thrust of this effort was to bring assistance to poorer shires and councils whose facilities and services were lagging badly behind. Undoubtedly there were defects in the process because we cannot build up this sort of machinery overnight. A handful of shires and councils missed out on grants and a small proportion of councils felt that they had been shortchanged. The overwhelming number of councils accepted the formulas applied by the Grants Commission and welcomed the quite substantial assistance it provided. Now access of local government to the Federal Grants Commission is to be abolished. Instead, the Government is to allocate a fixed proportion of revenue to local government. Part is to be allocated on a weighted per capita basis.
We know what this means. It will be weighted in the same unfair and unjust way as coalition governments have weighted the electoral- boundaries. Areas of real need which benefited from the Grants Commission approach will be sacrificed to the wealthier councils. The rest of the allocation is to be distributed by new grants commissions to be set up in the States. This is the policy of the so-called coalition of small government. It abolishes the work which was being done effectively by one commission and replaces it with 6 State commissions. A government pledged to cutting out waste and duplication has no qualms about forcing duplication on the States.
It should also be stressed that the Federal Grants Commission has built up expertise in principles of equalisation over 40 years. How can the new grants commissions of the States match these skills and experiences? Honourable members know that the skills and experiences necessary in such grants commissions are in extremely short supply in this country. Now the Government intends to abolish one such commission and create another six. There is going to be competition. Do the States have the money and the apparatus, the strength and the will to set up these grants commissions with the necessary expertise to carry out equalisation programs? Can such bodies equal the experience of the Federal Grants Commission with its 40 years of expertise? Even the Federal Grants Commission has developed enormously over the last 3 years as a result of its involvement with local government. Not only was there a difference from State to State, even within States we found a great deal of inequality. That is why the Labor Government moved into that situation and supported that concept in the first place.
If we look a little closer at the percentage of personal income tax going to local government it emerges quite strongly that local government will lose from this change. I know that local government always has urged that it be given a fixed proposition of revenue in this way. On the face of it local government might appear to be better off. The Treasurer (Mr Lynch) has announced that $140m will go to local government in 1976-77 under the new formula. At first sight this seems substantially more than the $80m distributed last year in the operation of Labor’s equalisation program under the Grants Commission. But if we look a little closer it emerges quite plainly that local government will be much worse off than it was in the last 2 years. For a start there is the split-up between per capita grants and equalisation grants. There is no doubt that the Government is strongly in favour of most of this money going into per capita grants. The principle of equalisation, of giving help to the needy shires and councils, will be given very low priority. All the States except Western Australia want most of this money to go into equalisation grants. So do most of the local government units. That is the view of the States and that is the view of local government but this centralist government has made up its mind. It set its pattern without dialogue with local government. Yet the lion’s share of this $140m will be directed to local government in a way which will produce gross inequities. There will be a redistribution of income away from the poorer to the wealthier shires and councils.
Another factor is the application of tax indexation which substantially reduces the value of personal income tax as a growth tax. For this reason the State governments have sought assurances that the new growth tax will not be eroded by indexation. No such guarantee will be applied to local government. Even if local government thinks that it is starting off well in the first yearand I question that it is- it will steadily fall behind. Another element of strong injustice to local government is that the decisions on what it gets will be made at the June Premiers Conference, where local government will not be represented. This leaves local government at the mercy of State Premiers who have never been disposed to treating local government fairly or to increasing its access to funds, as honourable members opposite will know, because they opposed the referendum we put before the people of Australia in relation to local government, just as many of the conservative State Premiers opposed it.
Even the level of assistance going to local government is open to criticism: The States and local government have sought a minimum of 2 per cent a year. The allocation of $ 140m is well below the 2 per cent of personal tax collections; it is nearer to 1.5 per cent, and possibly below that figure. Even at the outset local government is getting a bad deal from the ‘New Federalism ‘. If we take into account the funds which flowed to local government from Labor programs, most of which are now abolished, local government is worse off. Local government got a substantial injection of funds from the national sewerage program. Funds made available under that program have been savagely slashed by almost 60 per cent, and local government will suffer. About 75 per cent of the Regional Employment Development scheme money went to local government. That scheme has now been abolished. It should never be forgotten that that employment creating scheme, based on local assistance, was challenged in the High Court of Australia by a Liberal Government at a time of rising unemployment. Now the Fraser Government has completely abolished the scheme, even though unemployment is still high and will certainly increase in the months ahead. The Area Improvement Program, which gave substantial assistance to deprived regions throughout
Australia, has been abolished. The national estate program has been chopped. Much of that assistance also flowed through to local Government. Federal funding of the Australian Assistance Plan, which was devoted to local activity, is on its last legs. Other community programs have either been abolished or reduced to the point of uselessness. If all of these programs are taken into account, then the new federalism has brought heavy penalties to local government.
In the 1975-76 Budget Labor made about $230m available to local government. If honourable members examine the Budget Papers which are available in the Bills and Papers office they will clearly see on page 1 33 of Budget Paper No. 7 that $230m was made available last year to local government. That figure can be compared with the $140m proposed to be made available this year. That $230m represents about 2.2 per cent of personal income tax yield. Taking into account indexation and expected lower tax yields, it would amount to about 3 per cent in 1976-77. Honourable members should compare that with the $140m, or less than 1.5 per cent, that this Government intends to direct to local government. I stress that the figure of $230m does not include, with the exception of the Area Improvement Program, the programs I listed earlier; nor does it include assistance to local government for roads. If all these figures are totalled, there is no doubt that local government’s relative position has fallen dramatically. That is what the new federalism has done to local government. It has given it the illusion of greater freedom and independence from its new federal partners. But at the same time it has chopped off much of the flow of existing revenue to local government. It has redistributed the amount of assistance given in a grossly inequitable way.
The new federalism is a gigantic fraud. The States were conned into looking on it favourably at the last Premier’s Conference. They will not be so charitable in June. Ask Sir Eric Willis what he thinks about the new federalism. Ask any Premier who has to counter the risks of double taxation what he thinks about new federalism. It is just as dangerous and unfair in its treatment of local government. Local government should be aware of the fact that it will lose hand over fist if it blindly accepts the new federalism system. There is no doubt in my mind that the new federalism will be a colossal failure. In a year’s time it will be so badly discredited that it will be abandoned. The Labor Party has nothing to fear from these policies of new federalism. The victim of the new system will be the State and local government bodies which have put their faith in it. This tragic experiment which is doomed to fail has destroyed 3 years of creative work in evolving a new federal structure based on the community and linking the 3 tiers of government together in decentralised patterns of administration. We completely oppose the Bill and we completely oppose the federalist philosophy which underpins it.
-The Commonwealth Grants Commission Bill which is before the House is a significant piece of legislation in that it is part of a framework introducing the Fraser Government’s new federalism policy. We heard from the Deputy Leader of the Opposition, the honourable member for Reid (Mr Uren), a long dissertation on regionalism, but what he failed to tell the House, as he failed to tell the people when he was in government, is that the Labor Government sought to use regionalism as a means by which to change the structure of government in this country. No one would deny the importance of the various spheres of government co-operating and working together for the common good of the people, for it is quite clear that very often the implications of a program or a proposal extend beyond the boundaries of one local government body, beyond the boundaries of a State, and affect wider areas. But the use of the need for an examination of that type of inter-relationship as a cloak to cover a mechanism designed to change the political structure in this country needs clear identification.
The reason why the Labor Government in office pressed to establish regions, which in fact were not used by the Grants Commission other than as an easy way in which to receive evidence from the 900 local government bodies throughout Australia, was that it ultimately wished to change the structure of government in Australia in order that legislative power could be centralised in Australia. We in the Government today do not believe that legislative power should be centralised. We believe that it is in the best interests of the Australian nation that legislative power should be distributed among 3 spheres of government.’ We believe that wherever possible the power to legislate should be as close as possible to the people affected by the decisions involved in that legislation. That is an attitude to government which is diametrically opposed to that expressed by members of the Opposition, the previous Government. They sought to abolish the States. They sought to abolish local government and they sought to substitute in its place, not a second tier or sphere of government with legislative responsibilities, but administrative regions. All the policy decisions were to be taken here in Canberra by a centralist government remote from the people.
It is our view that in the interests of a democratic nation, it is important that power be distributed, that there be checks and balances. Had it not been for the checks and balances contained in our Constitution, with the States being vested with certain powers that enabled them to prevent the rush to centralism by the previous Labor Government, we could well find ourselves today in the position of being a centralist nation with a government that was, in the words of the Leader of the Opposition ( Mr E. G. Whitlam), ‘ a unitary system of government, a unicameral system of government’, in other words, one Parliament only with no Senate representing .the diverse interests of the 6 States of the Commonwealth, with no States with legislative power and with a capacity to check the excessive abuse of power by a power hungry centralist government. We in the Liberal and National Country Parties, in putting into operation our federalism policy, do so because we believe that in the short run it will be in the interests of the Australian nation and that in the long run it will be to the great benefit of the Australian people. Amongst other things, it will not only take decision-making power closer to the people, but more importantly it will entrench guarantees that protect the Australian democracy, the right of the Australian citizen to have a say in the way in which his country is governed.
There is no doubt that the Deputy Leader of the Opposition, in a quite clever and subtle fashion while he was Minister in charge of urban affairs, pretended that he wanted to co-operate with local government. To some extent he succeeded in convincing some people that he was genuine, but in fact he was merely being the fall guy to achieve the purposes of his Leader who wanted fewer local government bodies and, as he said, more States. He did not want States in the sense that we understand them today- States of sovereign governments with a legislative power and capacity- but administrative regions. He, in his regionalism policy, was seeking to establish the structures that would enable him to so destroy the States and at the same time abolish local government bodies as representative forms of government, replacing them with administative regions implementing the policies determined here m Canberra.
As I mentioned earlier, this comment about the importance of looking at the structure of government, determining whether or not one believes in a distribution of power in order to prevent its abuse, is not an argument which denies the importance of adjoining local government bodies concerning themselves about the effect of their own decisions upon their neighbours. We in the Liberal and National Country Parties hope that as the strength of local government is improved local government will recognise that it has not only a role within its own area but also a role that sometimes affects the areas surrounding it. We hope that as local government’s role is enlarged under our policy local government will continue and expand the co-operative mechanisms that were advanced as the justification for the introduction of a policy of regionalism. I have no doubt that in those areas where advantage is to be gained from co-operation, local government will do just that.
The Bill before the House is designed to remove some inappropriate references to local government- inappropriate now because of the introduction of our federalism policy. But it is also designed to empower the Grants Commission to advise the Government with regard to assistance to local government. The Deputy Leader of the Opposition, in his speech to the House this evening, tried to tell us that local government would be a victim of the decisions taken by State Premiers. The fact is that local government knows how much money it will receive for the year 1976-77. It will receive $ 140m- 75 per cent more than it received under the last Labor administration. Not only will it receive that amount in the coming year, but it has an assurance that it will receive in the following years the amount that that $ 140m represents as a percentage of this year’s income tax. Something of the order of 1.5 per cent to 1.6 per cent of income tax will in the years to come automatically go to local government. As a result, local government can plan ahead in the knowledge that it will receive a guaranteed share of income tax, a guaranteed revenue base that will increase as the tax collections increase as money wages rise. In the future local government will not fall victim to the same extent it has in the past, of the inflationary pressures on its own wage structure due to the rigidity of its previously limited revenue base.
This policy has expanded the revenue base of local government; as a result local government can expand. What does that mean for the average citizen? It means a great deal. Much has been said of the rising cost of council rates. Local government can now take account of the fact that a significant proportion of its revenue will be derived from its share of income tax on a percentage basis. It means that in the current year, taking it on a broad basis across the nation, there is a distribution to local government of approximately $10 a head throughout the nation. If one puts it on a household basis, it would be something of the order of $30 to $35 a household. If the distribution were upon that basis, that is the extent to which householders would otherwise have had to pay in additional rates if it were not for the introduction of this aspect of the federalism policy.
The money will be distributed under a 2-level formula. The Grants Commission- and this legislation is designed to achieve this aspect of the program- is charged with the responsibility of distributing, or recommending the distribution of, that $140m as between the States. In each State a proportion of the State’s share will be distributed on a per capita basis, sometimes weighted to take account of such matters as distance and area. Each State is being asked to put forward its recommendations. I have no doubt that the Grants Commission is also being asked to express a view as to the amount to be distributed in each State on a per capita basis. The reason for looking at it on a State for State basis is that some States like Victoria, closely settled and relatively small in area, may find that they are in a position where they want a greater proportion on an equal per capita basis than a State like Western Australia or Queensland where distances are much greater. The balance of the money will be distributed between the local government bodies by the State grants commissions.
At the Premiers Conference in April all the Premiers agreed to set up State grants commissions. But no action has been taken in some States. There was no announcement in South Australia until I flushed out of Mr Virgo, the Minister for Local Government in South Australia, the Dunstan Government plans to carry out the undertaking that Premier Dunstan gave at the Premiers Conference. Even then all that I have been able to achieve is a statement from Mr Virgo, the Minister for Local Government, that he might introduce grants commission legislation in two or three months time. He is reluctant to do it as he thinks the necessary work could have been done in Canberra by the Commonwealth Grants Commission.
In my view a grants commission composed of experts with an understanding of local government in South Australia could, if it were effectively established, do as good, if not a better, job in distributing the equalisation grants to local government in that State. It is time that the Labor Government in South Australia got off its seat and started legislating and governing in a way to assist the people of that State. All that that Government is doing is bellyaching because it is not prepared to carry out its own responsibilities of governing. Notwithstanding the praise of the federalism policy given by Dunstan following the Premiers Conference, his Ministers are now criticising it. The only reason I can identify -
-The only reason I can identify for their criticism is that they want to implement their grandiose schemes but want someone else to raise the funds. That is why they are frightened of the federalism policy. They want a fairy godmother to give them money so that they can waste it on their own gradiose schemes without the responsibility of directly facing their own electors. The criticism of State government critics of the federalism policy is based on that reason. Such governments are not prepared to govern. They are not prepared to raise the revenues in respect of the policy decisions that they expect and wish to make on behalf of the people in their own State.
The Deputy Leader of the Opposition interjected a few moments ago with the words: ‘Ask Willis’. I gather from his interjection that he was expressing a phoney argument that was circulated by members of the Labor Party in the recent New South Wales State elections about alleged double taxation effects of the federalism policy. The policy does not involve double taxation. I was interested to read in the Queensland Courier-Mail of 17 May- a week ago last Mondaya leader article headed:
The new federalism does NOT mean double taxation.
Mr Kenneth Wiltshire, the writer of that article who is senior lecturer in government at the Queensland University said, amongst other things, that the federalism policy did not in any way involve double taxation. He said that there will be one tax return and one tax paid by the taxpayer. What the taxpayer will know, and will know for the first time, is the proportion of his tax that is payable to State government, the proportion that is payable and used by the Commonwealth Government and the amount of revenue out of his tax on a percentage basis that is going to local government.
The time under the Labor Government involved Australian taxpayers in a doubling of taxation. The massive amount of taxation that was collected meant that State governments were able to spend money that they did not have the responsibility of raising. If democracy is to continue and a federal system is to last it is very important that each sovereign level of government have the capacity to raise through its own efforts a large proportion of the revenue required to fund its expenditure obligations. Independent political authority must imply an independent fiscal authority. The need for each level of government to have matching political and fiscal powers is quite apparent. The problem in Australia has been that the political power of the States has not matched their fiscal power. As a result of this disequilibrium, the fact that they have not had matching fiscal powers to what has been their constitutional political responsibility has resulted in a centralisation of decision making in the hands of the government that has had the fiscal power. A measure of political power and authority is the ability to make spending decisions. If a government does not have the ability to raise funds it ends up losing the ability to make decisions. Labor wanted the States to lose that ability so it gave them tied grants. It made them spend the money in accordance with the decisions of the Commonwealth Government. “We in the Liberal and National Country Parties want to reverse that trend. We want to guarantee the continued existence of the federal system where the power is distributed through the 3 spheres of government. We want to ensure that wherever possible legislative power is matched by a responsibility to raise funds to fulfil the decisions of that level of government and that the decision making should be as close to the people as possible. This Bill is a step towards the achievement of that goal. Therefore I support the Bill and urge its early passage.
Mt ANTONY WHITLAM (Grayndler) ( 8.57)- As the honourable member for Sturt (Mr Wilson) said, this is an important piece of legislation. This small Bill of some 16 clauses has one purpose and one effect; that is to remove the access, the direct access, of local government to the Grants Commission of this nation. In future local government will have access only through the States if the States choose to grant access, if the States choose to be the spokesmen for local government. There will be no access for local government as such.
The Deputy Leader of the Opposition (Mr Uren) delivered what I thought was one of the best speeches in this House in respect of some of the difficulties of regionalism. He did not say that regionalism was the answer to all the problems of administering this country, of delivering the services and structuring government. But he did talk about regionalism as a dynamic instrument for getting around some of the old static organisation of federal, State and local government. He talked about how this arrangement was working. His remarks deserved the attention of every member of this House. However, I do not believe he was getting this attention. I cannot believe that the honourable member for Sturt was listening to what he had to say because the honourable member came back again and again to the word ‘federalism’. We hear a lot in this House about the policy of federalism. But this policy is nowhere evident in this Bill. All this Bill deals with is the access of local government bodies to the Grants Commission of this country.
If one wants to be a purist, federalism is something that can occur only between States and some federal compact. When one talks about the 3 levels of government one is talking about nothing that is magical; one is talking about nothing that is an inherent part of federalism. There is no reason why there could not be four, five or six levels of government, as indeed, on a super refined view there may very well be. The Minister for Employment and Industrial Relations (Mr Street), who is at the table, acknowledges this when he talks about having to acknowledge certain specific purpose authorities which carry out local government type functions. So federalism is a phoney concept.
Government supporters- Oh!
– Honourable members opposite should think about it. In the United States of America context, federalism in that country only exists between independent States and the Federal Government of that country. Local government can never have any constitutional part to play in federalism. Let us talk about the proper inter-governmental relations in this country. Let us talk about them not in some structured ideology that devolves everything to the States- to the old colonies- which are, as the Deputy Leader of the Opposition said, the greatest centralist structures in this country. Every State in this country is ruled from a square mile. One will not find any devolution of power from the State capitals of Brisbane, Sydney, Melbourne and around the coast, to their hinterlands. One will not find anything in Sydney that makes the people of Murwillumbah feel that they have anything in common with the people of Albury. One finds a terrible centralism in every Australian State.
But let us talk about the so-called federalism policy. What is it? The Government has put up only 2 speakers in this debate, and certainly the honourable member for Sturt did not tell us what it was. What is this magical percentage? The honourable member for Sturt said that an independent political authority requires independent fiscal authority. All right. Is it not then just as logical to give income taxing powers to local authorities as to offer to give them 2 per cent, 3 per cent, 4 per cent or 5 per cent of personal income tax? That is not giving them any independent fiscal authority so the Government should not make a pretence that it is doing so. What it is doing is removing their access to the Grants Commission, which operates on very different principles, and giving them a flat percentage of personal income tax. The Government will not say what it is but the Deputy Leader of the Opposition has worked it out and, on the basis of the statements of the Treasurer (Mr Lynch) the other day, it looks like lh per cent
Let us see what this Fraser federalism means for local government in Australia. In a special supplement to the Australian Financial Review yesterday the journalist, Mr Ian Davis, talked about the Fraser federalism and what it might mean. He said:
A figure of anywhere from 2 per cent to 5 per cent of income tax revenue has been tipped.
The upper, more optimistic range would provide a significant assistance to local government; a figure at the lower end of the scale would almost certainly lead to a worsening of the present financial situation.
In fact it has not been 2 per cent, it has been * Vi* per cent, and that will be significantly less than local government was receiving from Federal Government revenue sources during the past couple of years when the Labor Government was in power.
– What does Davis know about it?
– We will get to the States again in a moment. The Minister for Employment and Industrial Relations talked about the new tax sharing arrangements providing for a fixed percentage of personal income tax going to local government. I hope that in his reply in this debate he will tell us exactly what that percentage is, because until he does we frankly do not know what we are talking about. We are talking in a void. This piece of legislation is premature. It is not a matter of throwing out the baby with the bath water; we are throwing out the baby and hanging on to the bath water.
I am very glad that I will be followed in this debate by a member of the Country Party because I will be very interested to hear what he has to say about the approach of this Government to the so-called Fraser federalism. Again we can rely only on vague Press releases. No legislative proposals have come before this House or the other House. I will be interested to hear what he has to say about per capita grants and about the possibility of equalisation or topping up. Members of the Country Party will know that under the Grants Commission recommendations for financial assistance to local governments over the last couple of years, local authorities in rural areas have benefited very much from the recommendations which were adopted by the Labor Government. It meant not per capita grants at all. It meant that people living under local authorities in rural areas received the equivalent of about $3 for every $1 that was allocated per capita in the metropolitan areas. Under what we see now of the so-called new federalism that will disappear.
We have heard a lot of talk in this debate from the Minister, from senators in the other place and from the honourable member for Sturt about bureaucracy. There would be no leaner bureaucracy having served this country well than the Grants Commission. It is an extremely lean bureaucracy. It has built up a body of expertise particularly, as I suspect members of the Government parties are concerned, in working with this principle of equalisation which it applies in relation to the applications from States for financial assistance and which over the last couple of years it has been able to refine in dealing with applications from local government bodies grouped together in regions. What the Government is proposing to do is to create a further bureaucracy - a further 6 bureaucracies- 6 State grants commissions which do not exist at the moment. One State has a grants commission, a part time body of no expertise. The Government is turning its back on the traditions of this country where we have had one Grants Commission for our nation which has assessed the needs of the States for special assistance and has, over the last couple of years, developed considerable expertise in processing applications from local government bodies grouped together in regions.
One of the most laughable things in the Minister’s second reading speech was the suggestion that artificial regional groupings had been formed under the Act of 1973. Any grouping, from a State to a local government body, is of its nature artificial. The groupings into which the Government will presumably insist that the States force their own bodies will be artificial in some way. There will simply be more of them.
There will be more people- 6 times the numberto duplicate the work load that could be serviced here by our national Grants Commission.
– That is not right. Not all wisdom is in Canberra, you know.
-The honourable member for La Trobe interjects that not all wisdom is in Canberra. I would have thought that the whole theme of the Grants Commission Act 1973 acknowledged that But what it sought to do was to give local Government, with its expanding responsibilities, access to the national revenue. Let us be in no doubt about that. What is happening now is that the Government parties are supporting a measure that will cut off access by local government bodies to that revenue. It will insist that local government bodies approach the Federal Government, if at all, through the States, through a level at which they have no vote at all. If honourable members read the Bill they will see that is what it says. .
– What clause?
-The clause that deletes section 17. Let us look at the Bill. As the Minister said in his second reading speech- this is really comical:
It also defines ‘assistance to a State for local government purposes’ in such a way as to comprehend the unincorporated areas in some States where local government-type services are provided by the State government.
The Bill says nothing of the sort. If one looks at clause 8 one will see that the proposed new section 17 subsection (2) says that a reference to ‘a grant of assistance to a State for local government . . . purposes shall mean purposes declared by the regulations’. Where are the regulations? Do we see them? Not at all. At least the Prime Minister (Mr Malcolm Fraser) was more frank in his statement in February 1976 after the Premiers Conference when he said that he would ask the Grants Commission what local government purposes were. He has to go back to the body which honourable members opposite are reviling and which the honourable member for La Trobe (Mr Bailleau) says is not the font of all knowledge. Of course it is not the font of all knowledge but it is a body with considerable expertise in processing applications brought forward from local government.
I am often amazed to hear people here talking of local government as the third level of government in this country. There are no first, second and third levels of government in this country just as there is no upper House. I defy honourable members to go to the Constitution and find that expression. Local government in this country is the primary form of government. It is the form of government at which most people have most contact. It is the area in which they know most of their aldermen or councillors. There are many more of them, and their doors are knocked on more often than are the doors of people in this chamber. Local government is what people see as the primary form of government. We on this side are concerned that local government should have access to the national revenue of this country and it should have access on an equal, fair basis. That is why we support a principle of equalisation which has been administered by the Grants Commission over the years in dealing with the States, and a principle which has been administered over the last couple of years in dealing with local government regions. It is a principle which the Government parties are not supporting here today. It is unfortunate and I am surprised that from the metropolitan area of Sydney, which I know best, we have no speakers listed. They are some of the areas in which local government authorities have benefited from this very principle.
In his second reading speech the Minister seemed to be terribly concerned about assistance under the so-called Fraser federalism. We are delighted at every indication we get as to what it might mean, because it is not reflected in this piece of legislation. He said:
Assistance to all local government authorities will be provided. No longer will some councils be excluded from sharing the moneys provided for local government purposes; . . .
So it will be the same old principle of per capita grants across the board. To those who do not need it will be given more than they need and to those who do need more much less will be given.
-Let me tell you what Councillor Thwaites, the President of the Australian Council of Local Government Associations, said on 17 May and that is pretty recent. He said:
There is also some disquiet in local government circles over the lack of definition so far in the new system as it concerns the proportions distributed between ‘per capita’ and ‘needs’ classifications in the total assistance program. Clearly, if per capita assistance is concentrated on at the expense of needs assistance, the rich councils will get richer and the poor poorer, and the imbalance between the two institutionalised.
I come from a constituency where the councils are poorer and where they have benefited very greatly over the last couple of years from Grants Commission recommendations of the assistance that they should receive. I would be delinquent in my duty if I did not stand up in this Parliament and resist the principle which will give more to those who do not need it and take it away from councils such as those in my own area which do need it. I am going to be interested to hear what the honourable member who is to speak after me and who comes from a rural area has to say about the same principle because he will know that the ability of every local government authority in terms of dealing with its rate base is not the same. This particularly applies at the moment in rural areas. They will be very distressed to see the principle of per capita grants sneaking in just as those who represent the more disadvantaged areas in the metropolitan areas of this country are also extremely distressed.
The problem is, as the Deputy Leader of the Opposition put it, that the Government is so premature with this legislation. It is dismantling a system which has given local bodies direct access to the Grants Commission. It is doing it before it has delineated what it says it will do after the Premiers Conference next month- the details of its federalism policy. There has rarely been a piece of legislation that has come before this House which has been so premature, which a Minister justifies by reference to details yet to be announced. Constantly as one reads the second reading speech of the Minister for Employment and Industrial Relations, who is sitting at the table, one will see that details are yet to be announced.
But when government supporters get up and say that in some way members of the Labor Party are supporting some kind of centralism they are so wrong. This is not just about centralism at all. It is, as the Deputy Leader of the Opposition has said, about the most effective form of decentralisation. There can be no one who has fought harder in this Parliament or in his party or in all the councils of the party or outside for a decentralisation of decision making. Regionalism, as he said, is not a perfect system but it is a dynamic system that was developing. It was one suiting the purposes of local government.
I revert again to something that was said in the same survey I have already referred to in yesterday’s Australian Financial Review, and this time not by a journalist but by a man who is the Secretary of the Local Government Association of New South Wales, Mr Miles, who is no member of the Labor Party just as Councillor Thwaites is no member of the Labor Parry. Mr Miles says:
One aspect of the new federalism which has made many local government observers uneasy is that the emphasis on the rights of the States could serve to confirm some of the centralist policies within individual States which have operated very much against the interests of local government.
I think that is the nub of the matter. I think that is the problem, and that is the problem that arises out of this piece of legislation. It is not the problem that perhaps arises out of some concept of what ideally the new Fraser federalism might mean because we do not know what that is; but we do know now what this piece of legislation is doing. It is made very clear in the fiddling with sections 17 and 18 of the existing Act, and that makes it very clear that local government bodies which are defined clearly in the existing Actbodies incorporated under statute by each of the States, bodies that we do not seek to say will not be treated as local government bodies but bodies which are regarded as local government bodies by each of the States- shall approach the Grants Commission in regions, in artificial regions. Of course they are artificial, as every unit of government in this country is artificial, but are they regions imposed by a Canberra authority? No, they are regions that are agreed on between a Minister of this national Government and a Minister of a State government. Between them they have agreed on regions that are dynamic, that will change from time to time and that can approach a Grants Commission and seek aid on the basis of need, as the Grants Commission has granted.
That is what this Bill is seeking to remove and that is why it is a thoroughly objectionable piece of legislation. That is why however many objections we may have to the so-called Fraser federalism, to guessing at what percentage of personal income tax will be made available to local government bodies, we at least now have a system that is working, a system that is working to the advantage of local government authorities. It is a system which is granting financial assistance to them for which they are grateful and which they are using. Here we have a Minister who comes in and talks about a Bill which he says will define in the Act ‘assistance to a State for local government purposes’. Yet every government party supporter in this chamber will vote for this Bill knowing, as I have pointed out, that in fact clause 8 of the Bill does no such thing; that it leaves it up to regulations.
It is about time that in this Parliament we did not leave it up to Ministers by regulations to set priorities about what is a suitable local government purpose. We should insist that that is something we talk about here in the Parliament. National goal setting about where and how we make decisions should be decided here in open debate and not by some ministerial decision gazetted, you can be sure, in the 2-month recess before the Budget when we are all back in our constituencies. That is just not good enough. We ought not to be in any doubt when we vote on this Bill. I will make sure that every member of every marginal constituency held by a Liberal Party or a Country Party member in this chamber has his constituents know they are voting to deny the local authorities in their electorate access to the Grants Commission in this country and for no good reason. It is a shameful piece of legislation.
Mr DEPUTY SPEAKER (Mr Martin)Order! The honourable member’s time has expired.
-The implementation of the Government’s federalism policy requires a different role for the Commonwealth Grants Commission than has existed since 1973. This Bill before the House makes the changes to the Commonwealth Grants Commission Act so that it will be appropriate to our policy and so that it will make special provisions for the Commission to advise the Government on matters relating to assistance to local government under this new policy. It also, of course, removes the obligation on the Commission to report on applications by local government bodies. It should be emphasised that this Bill leaves unchanged the true role of the Commonwealth Grants Commission; that is, the right of States to apply for supplementary assistance to correct difficulties caused by small populations, remoteness and other special circumstances. The whole object of our policy is to provide each level of government with a known share of the national purse, increasing as the nation’s economy grows. It will remove the instability brought about by ad hoc changes in Government policy or priority. It will allow long term planning based on known expectations.
There is, however, another major advantage in the proposals put forward by the Government and that is that it ensures effective and responsible government with maximum community involvement. We intend to get rid of the belief held by the previous Government, and obviously by previous speakers, that all wisdom and knowledge reside in Canberra, that governments and bureaucrats far removed from the area of need can make decisions efficiently. I could cite one example which refers to the regional employment development scheme. Despite its many values to the community and particularly to the employment of unemployed people, the decision by the Labor Administration to halt that scheme created many injustices to local government authorities and organisations. We are all aware of the numerous applications that were prepared at considerable expense by local government authorities and even in some cases were approved by the Labor Government but then were not funded. We are all aware of projects that were commenced and were unable to be completed due to a mandatory holding of funds by the former Labor Government. Local government authorities should be able to expect an assurance that, having undertaken a commitment to a project funded by a government, it can be completed without bringing additional cost to the ratepayers. This example emphasises the effect of changes in government policies. Economic difficulties brought about by either a change of government or a change in government policy can be detrimental to the efficient administration and financial management of local government authorities.
Both the previous speaker, the honourable member for Grayndler (Mr Antony Whitlam), and the Deputy Leader of the Opposition (Mr Uren) quoted from policy statements and Press reports of Councillor Thwaites and Mr Miles of the Australian Council of Local Government Associations. The Deputy Leader of the Opposition believed that the views he expressed were the views of local government authorities. However, I quote also from statements by Councillor Thwaites:
The Council is extremely pleased that the principle has been established that local government should have its share in the new revenue-raising arrangements. It sees this as a vital first step towards rescuing local government financing from the bad old Oliver Twist days and putting it on a progressive and systematic footing.
– That knocks Whitlam’s story, does it not?
-That is right. The Deputy Leader of the Opposition said that everything done by the Grants Commission in relation to local government funding was done effectively. I will not deny that the Grants Commission had built up considerable expertise. It is indisputable that it performed its duties commendably but the second report of the Grants Commission for 1975 points to some very serious difficulties it experienced in administering its duties. I think it is fair to quote from that report. On page 2 1 the Commission says: . . . considerable difficulties were experienced in the first year in assessing grants for local governing bodies . . . particularly in relation to the expenditure differential. Because of this the Commission had to resort to the use of judgment of the evidence, including an examination of each local governing body’s own expenditure on a particular function. This evoked criticism from several sources. However, the difficulties stemmed from data problems which offer no short-term solution. It must be emphasised that these problems would be evident for any method used to determine a distribution of funds between local governing bodies on an equitable basis. They arise because of long-standing differences in accounting practices between local governing bodies within States and between States, some of which are of a fundamental nature. In addition, there are significant differences in the bases on which property values are fixed; these provide the basis for the distribution of the rate burden, and hence a measure of taxable capacity.
Later in the report the Commission points to the difficulties that local government authorities have and the ability of many local government authorities in providing submissions to the Grants Commission. The report states: . . . a substantial number of submissions were of little assistance to the Commission for the assessment of revenueraising capacity and expenditure disabilities. This was disappointing in view of the guidelines contained in the First Report and further detailed in circulars to every regional organisation and local governing body. Many submissions were simply ‘ shopping lists ‘-lists of projects which the councils would like to undertake, some amounting to many millions of dollars, without any attempt to indicate why they could not be financed from their own resources or what cost disabilities they would encounter if the projects were implemented. There were, of course, a number of excellent submissions that concentrated on identifying and quantifying revenue-raising and expenditure disabilities; unfortunately the number was not great and the Commission had to attach a great deal of weight to the evidence from these bodies in assessing the claims of their neighbours.
These 2 problems encountered by the Commission indicate in the first instance that State Grants Commissions should be able to cope as effectively. Firstly, there is a greater degree of similarity between municipalities within States, although there are by no means standard procedures. Secondly, the ability for consultation with the Commission would be greatly enhanced. The brief time that the Commonwealth Grants Commission could spend in individual municipalities, or even in regions, was severely restricted. The second problem in regard to local government authorities’ ability to prepare a meaningful submission will become a major subject for discussion in the formation or increased responsibility of State Commissions. It is to be expected that the expertise developed by the Commonwealth Grants Commission and the data information compiled will be freely available to the State Commissions. It will be invaluable and should assist in smooth and effective changeovers
The Minister for Employment and Industrial Relations (Mr Street) in his second reading speech pointed out clearly the precise role to be played by the Commonwealth Grants Commission in the implementation of our federalism policy, which has not yet been fully determined.
The honourable member for Grayndler always seems to be in a great hurry to hear the policies that our being espoused daily by the Government. As recorded in Hansard of 19 May he made a statement that the only policy yet put forward by the Government was a $13m giveaway to the rural sector. Of course, he conveniently forgot the tremendous advantages that the investment allowance, the drop in interest rates and the homes savings grants, which had all been implemented before that date, were conferring upon the Australian economy. If the honourable member had waited another day to hear the speech of the Treasurer (Mr Lynch) on Thursday, 20 May, he would have heard two of the most significant reforms since Federationpersonal tax indexation and the implementation of the family allowance scheme.
It is quite clear that this Bill considerably modified the Commission’s role as related to local government finances. There is no doubt that local government is in a painful dilemma. It has been asked to pay for more sophisticated and comprehensive services, yet payment is becoming more difficult. Local government authorities simply do not have the capacity to raise the money. The rate of growth in local government tax revenue has been only half of State growth and only 77 per cent of Federal Government growth or, in comparative terms, increases have been 29 per cent and 25 per cent as compared with 20 per cent. Rural shires have suffered in this regard more than any others. For example, with the fall in incomes in wool grower municipalities their ability to raise income has dropped by 22 per cent. In pastoral municipalities this decrease has been even more prounounced with income decreasing by 48 per cent. The decrease has not been so substantial in grain producing municipalities, where a decrease of only 6 per cent has occurred, but when one considers that municipalities have had to cope with an inflation rate of up to 16 per cent over the last two or three years one realises the serious difficulties they are having in financing their projects. During this time too the increasing range of services that local government authorities are supplying has increased from 23.8 per cent in 1969-70 to 26.3 per cent in 1973-74 of current expenditure items. A statement of policy by the Australian Council of Local Government Associations points out that:
Local government, provider of some of the most basic services to the community, should not have to depend for its finance on the vagaries of Federal-State politics, the waxing and waning of Federal-State relations, for it effectively to meet the expectations of the people who depend on it. This demands two imperatives: Financial assistance to Local
Government must be linked as an adequate percentage with a major revenue source . . .
This percentage must grow as total revenue grows.
This is exactly what our federalism policy sets out to achieve. Local government does not deserve its status as the poorest of the 3 relations. Local government is nearer to the people, scrutinised more closely by the people and is more immediately accountable to the people. Yet it is the most cost effective level of government in the nation. Its plans are made and its priorities allocated in a constant public spotlight. People living in the shires and municipalities throughout the nation expect adequate water and sewerage facilities. They expect physical services such as libraries, swimming pools, sports grounds, etc. They expect a whole range of services for groups in the community which have special needs such as the old, the sick, the young, women and Aborigines. Yet local government is heavily disadvantaged when it comes to paying for these expectations.
Total expenditure on public services by councils throughout Australia is running at an annual rate of $ 1,200m and $230m of this has come to local government this financial year in the form of federal grants. Roughly $300m is raised through the Loan Council. The rest, which is more than half of the total, comes from rates. Rates are neither a progressive nor equitable way of raising revenue. They are a sectional tax often bearing most heavily on those least able to pay. They are a subsidy of the whole of the community by one segment of it and there is a limit to the sum that can be raised by them. Indeed, the point is admitted on all sides of the problem that rates have been pushed up about as far as they can go. I feel that the effects of local government problems will be felt most tragically in the country where local government is a major employer of labour and also on the fringe of capital cities where local government services are most appreciated and most necessary. The economic statement of the Treasurer last Thursday night of necessity cut forward estimates of expenditure. However, in the announcement of its final decisions it ensured that special considerations will be given to the future of the problems of low income families and the needy to provide justice to the individual taxpayers. The important role that local government plays in our system was not overlooked with $ 140m to be made available in 1976-77 in general untied revenue assistance. This is a 75 per cent increase over the previous year.
This Bill proposes necessary changes and is setting the stage for a true federalistic approach to government. It sets out to give every tier of government a real share of available finance and a new responsibility for decision making. The honourable member for Grayndler quoted from the statement by Councillor Thwaites. There is naturally disquiet in local government circles, particularly concerning the proportions of funds distributed per capita and needs classifications in the total assistance programs. Clearly per capita assistance must not be propounded at the expense of needs assistance or greater inequalities will develop. This, of course, is why the federalism policy is being discussed and why there is close consultation with the States and local government authorities. It is not our aim to push forward with the implementation of legislation as the previous Government did only to find that it was not applicable to the circumstances that the previous Government was endeavouring to correct. There is no reason why this Government, if it is prepared to consult and to co-operate and not to dictate and direct, will not by its genuine effort be able to treat local government as a highly responsible and desirable element of our system of government in Australia. I support this Bill.
– in reply- The Opposition spokesman who led for the Australian Labor Party in this debate, the Deputy Leader of the Opposition (Mr Uren), talked at one stage about colossal failures. I shall be charitable. I shall admit that the Deputy Leader of the Opposition and members of the Australian Labor Party are fully qualified to talk about colossal failures. Their recent record indeed proves that that is about the only subject about which they know anything. That leads me to the fact that the Deputy Leader of the Opposition spent most of his speech defending the Labor Party’s concept of regionalism. That amounted to trying to impose a new level of government. He alleged that the States more and more were coming to see the merits of the system. Of course the point is that the States had no choice. They had to like it or lump it. The Deputy Leader of the Opposition also said that the majority opinion of local government supports the Labor concept of regionalism. All 1 can say is that the Deputy Leader of the Opposition must have been talking to different representatives of local government from those to whom I have talked over the last few years.
The fact is that the only people who are sorry to see the demise of the Labor Party’s regionalism are the Deputy Leader of the Opposition and members of his Party, certainly not local government which will be getting $140m this year compared with $56m the year before last and $80m last year- not $230m as I heard alleged by the Deputy Leader of the Opposition tonight. I remind him that that figure included a large amount- I think from memory something like $135m- under the Regional Employment Development scheme which the Labor Government made a hopeless mess of and which it has fallen to my lot to try to clean up.
Under the new proposals that have been outlined in this Bill there will be tax sharing arrangements. Local government will get a fixed share of the personal income tax collections. Unlike the lucky dip policy of the Labor Party, all local government will get some assistance. On top of that I remind the honourable member for Grayndler (Mr Antony Whitlam) that areas of low population or municipalities or shires with special disabilities will be protected by the addition of top up grants through the States grants commissions. That was spelt out with great skill and clarity by the honourable member for Sturt (Mr Wilson) and the honourable member for Mallee (Mr Fisher). I thank them for their contributions to the debate.
This Bill ushers in a most far reaching and imaginative restructuring of the financing of government in Australia, particularly local government. It is the most imaginative proposal since Federation. It has been widely acclaimed by all sections of the Australian community. It is a major step forward to achieving a true federal system for Australia and time will prove that not only will local government be better off under the new system but also responsibility will be where it should be, close to the people who are close to the problems. That will be the experience as the new federalism policy of this government, of which this Bill is a most important part, comes into operation over the next few years.
Question resolved in the affirmative.
Bill read a second time.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Street) read a third time.
Debate resumed from 6 May, on motion by Mr Lynch:
That the Bill be now read a second time.
-This Bill gives effect to an agreement made by our country to participate in the establishment of the Organisation for Economic Co-operation and Development Financial Support Fund. The agreement was signed in Paris on Wednesday, 9 April 1975- more than a year ago. Membership of the fund is open to all member countries of the OECD which becomes parties to the agreement. While in government the Australian Labor Party recognised the potential of this agreement and readily took part in it. In Opposition we are consistent and do not oppose this Bill.
The need for the fund came out of a recognition of the potential balance of payments problems confronting major industrialised countries, members of the OECD, due to steep rises in oil prices. Fortunately the problems have not been as acute as was first thought but the fund may still be required to play a valuable support role. The fund cannot be looked on as a panacea for chronic balance of payments problems. For example, the problems faced by Great Britain and New Zealand in recent times would be outside the scope of the fund. However, the fund may be regarded as a useful financial facility available to help member countries temporarily finance balance of payments deficits. In providing this facility the fund will, hopefully, deter member countries from taking unilateral action which could hamper the free flow of international trade. In this way desirable checks to world production and employment may be diminished.
As well as the particular arrangements made under this agreement, other important steps towards international co-operation in economic matters were taken during preliminary discussions. Significant steps were taken towards the industrialised nations realising that there individual prosperity depended upon mutual cooperation. Agreement was reached on general principles of responsible domestic budgetary policy. The aim of those principles is to ensure that recourse to the fund is restricted to problems in balance of payments over which the claimant countries have little control. The Opposition sees this movement towards co-operation in such matters as an important ingredient in this agreement.
Finance for the fund is secured through quotas for individual members which determine their maximum financial liability and also the basis for their borrowing rights. Australia’s quota is about $275m. However, as the Treasurer (Mr Lynch) pointed out in his second reading speech, the provisions of the fund agreement are drawn up in such a way that there is virtually no circumstance in which there could be a direct impact upon the Australian Budget. The fund members’ liabilities are virtually guarantees to enable drawer countries to borrow on international markets. It is only if money were not available in the markets that Australia would make a direct contribution. That would then require budgetary appropriation and, of course, it would come through this Parliament.
I would like to mention now something about borrowing guarantees. They will function in two modes. Firstly, the guarantee will be provided by individual members and the fund would be able to borrow its share of funds. Secondly, the fund itself would borrow on the collective guarantee of all members. A number of safeguards for guarantees is incorporated in the agreement. Members who receive loans will be required to follow policies consistent with the general principles of the fund. Decisions to grant loans up to a member’s quota will require endorsement by a two-thirds majority of the governing committee on which all members will be represented. Loans above the quota will require higher majorities of the committee.
Turning my attention now to the circumstances which made this fund necessary and the relevance of the fund to Australia’s current economic problems, I point out that the Treasurer traced the path which followed the intervention by the Organisation of Petroleum Exporting Countries in the world oil market in 1973. In his second reading speech he correctly diagnosed that this intervention had considerable consequences for inflation in non-OPEC countries. Those problems reinforced those associated with the downturn in the international trade cycle and culminated in the most serious recession since the 1930s. Australia, as a vigorous participant in international trade, could not be isolated from the inflation and the recession. By far the biggest factor contributing to Australia’s recession has been the international downturn. It is spurious to argue that Australia was saved from massive rises in oil prices through being dependent upon internal supplies and hence could be isolated from inflation and recession. The secondary effects of the rises in oil prices on our trading partners ensured that world recession did not escape Australia.
It is important to keep the international situation in perspective, especially if we are to implement policies which will lift Australia out of the present recession. The OECD financial support fund will have a role to play in supporting recovery from the international slump. But it is important for those countries wishing to join in this recovery to recognise the role international forces will play. If the Australian Government bases its policies for recovery on false premises, then recovery must be delayed. If the Government continues to ignore the realities of the international economy and continues with its false and damaging assumptions that all of our problems may be sheeted home to Budget deficits, then Australia will miss out on an early return to prosperity. Cuts in government spending- we have been debating another lot of them today and we will continue to debate them after the debate on this Bill is completed- are not being used anywhere else in the world as a means of obtaining a recovery in the economic system.
-What about in the United Kingdom?
-The Minister for the Capital Territory interjected: ‘What about in the United Kingdom?’ He is not known for his economic expertise. If he were to study what is going on in the United Kingdom he would find out that the United Kingdom is merely looking very far ahead at forward estimates and has not in any way cut its level of government spending in the way that is being done here. This Government’s* ideological obsessions have postponed and will continue to postpone recovery. The unfortunate situation may be reached where Australia slides further into recession and itself has to call upon the resources of the OECD support fund. I trust that this will not happen.
I am delighted to take part in and lead for the Opposition in the debate on this Bill. I give notice that we support the Bill. I have had the pleasure of visiting the headquarters of the OECD in Paris, of visiting the Australian Ambassador to the OECD and of knowing some of the staff in our embassy to the OECD. It has also been my fortunate lot on 2 occasions to take part in debates in the Council of Europe in Strasbourg on the OECD ‘s annual report. It is fortuitous that on the 2 occasions that Australian parliamentarians have taken part in such a debate I happened to be in a position to be present. I was present firstly as a member of the Opposition in 1971 and then last year as a supporter of the Government. Knowing Mr Van Lennep, the SecretaryGeneral of the OECD, knowing the quality of the work of the OECD, knowing the valuable work that the Organisation does not only for our country but also for improving knowledge in the difficult art- or is it a science?- of economics for all countries of the world, but particularly member countries, it is good to see this further step being taken in setting up this financial support fund. I hope that fund resources will not be needed by our own country, but at least it is gratifying to see the international co-operation that has brought about the setting up of this fund. I support the Bill.
-I welcome this opportunity to express my strong support for the Organisation for Economic Co-operation and Development (Financial Support Fund) Bill. I am pleased to note that a bipartisan approach has been adopted to this Bill in this chamber. Like the honourable member for Adelaide (Mr Hurford), I have had various associations with the Organisations for Economic Co-operation and Development. I was particularly closely associated with it at the stage that Australia contemplated joining it and in the early years of Australia’s membership. In my view the OECD is one of the prime international institutions in the world for a co-operative approach to economic matters. It provides Australia, as a member, with a wonderful opportunity, which I think we have accepted over the recent years in which we have been a member, to play a full and a constructive role in debates and the furtherance of international economic co-operation.
I also welcome the opportunity to speak on this Bill because it is too infrequently that members of this chamber have an opportunity to speak in a debate on external financial matters. As an aside, I hope that this is something that we may be able to rectify at some stage before too long. I think there would be great advantage to this chamber if we were to have a wider debate on international economic matters than this Bill provides, although it does provide an opportunity, because these are matters which are of the greatest importance to this nation. They affect not only our external economic and trading position but through them our domestic economic situation also. As well, external economic relations cannot be divorced from our overall foreign policy.
We live today in a highly interdependent world, a world where the economic and commercial circumstances of any one country, particularly where that country is an important international trading country, have important implications for the economic and commercial circumstances of other countries. The lack of economic and commercial harmony or the presence of it between nations is a major element of the total foreign relations picture between nations. The Bill before us is a not insignificant addition to international economic co-operation. I would like to come back to this issue later in my remarks.
The Treasurer (Mr Lynch) outlined in his second reading speech the basic features of the agreement establishing a Financial Support Fund of the Organisation for Economic Cooperation and Development which was signed by all member countries, including Australia, in Paris on 9 April 1975. The objectives of the fund are to encourage and assist members firstly to avoid unilateral measures which would restrict international trade or other current account transactions and which would artificially stimulate visible and current invisible exports; and secondly, to follow appropriate domestic and international economic policies, including adequate balance of payments and co-operative policies to promote increased production and the conservation of energy. Another objective of the fund is to serve for a limited period of 2 years only, to supplement in exceptional circumstances other sources of credit to which members encountering serious economic difficulties have had recourse, and to ensure that the risks on loans by the fund to members are shared equitably amongst all members.
It is important to note that the fund will act only as a lender of last resort. This means that the potential borrower must first have made the fullest appropriate use of its own external reserves and fullest use of other possible sources of capital including other multi-lateral facilities such as the International Monetary Fund. A potential borrower can borrow only in circumstances where it is encountering severe balance of payments difficulties. Criticisms have been made of the fund from time to time that because a borrower has to follow appropriate domestic and international economic policies, that country is thereby abrogating from itself its ability to dictate its own economic policies.
In my view this criticism is quite fallacious for 3 main reasons. Firstly, the country does not have to borrow from the fund. Secondly, by the time it has become eligible to borrow from the fund it already will have borrowed from the International Monetary Fund and will of necessity have had to agree in particular terms with the IMF on appropriate economic policies. Thirdly, the Support Fund cannot autocratically dictate economic policies to the lender.
Section 3 (C) of the agreement provides that conditions related to economic policies needed shall be agreed between the borrower and the fund at the time the loan is granted. Experience with the IMF in any event indicates that countries agreeing to certain policies generally do so on a best endeavours basis. The agreement in itself in no way inhibits Australia’s freedom of action in any direction beyond what our existing international obligations impose on us; for example, through our earlier acceptance of the OECD’s trade declaration. It is also important to note that a member of the Financial Support Fund can seek exclusion from providing funds for a borrowing by another member if the country called is itself in present or prospective balance of payments difficulties. Similar safeguards apply to all participants in respect of borrowings by the fund in their own internal capital markets. ~. ‘A welcome feature of the fund is the close liaison that it will have with other major international financial institutions, notably the International Monetary Fund and the Bank for International Settlements. These institutions will have representation at meetings of the Support Fund’s governing committee and provision exists for the Bank for International Settlements to be appointed as agent for the fund for various administrative purposes. If Australia ratifies the agreement it will have a quota in the fund which will be the basis for any drawings for or contributions to the fund of special drawing rights of $300m. As the honourable member for Adelaide said, this is something in the order of $A275m. Australia’s proposed quota is the equal twelfth largest of the twenty-four OECD members and reflects our importance as a major trading nation and as a significant member of the OECD. It is unlikely in the extreme that Australia will be a borrower from the Financial Support Fund. It is also perhaps unlikely that we will be required to contribute in any significant way. If we do, provisions exist which would mean that there would be almost certainly no direct budgetary impact.
I would like to return now, briefly, to the wider context in which I believe this Bill should be considered. The financial Support Fund was conceived at a time immediately following the dramatic increase in oil prices by the Organisation of Petroleum Exporting Countries in 1973 when the balance of payments positions of most of the major western countries were convulsed by the OPEC action, an action which played a critical part in the recession in major western countries which occurred in 1974 and 1975 and from which they are only now recovering. The original idea stemmed from 2 proposals by the United States of America and one by the SecretaryGeneral of the OECD, Mr Van Lennep. There were some who thought that the United States proposals would be damaging because they might imply an attempt to confront the OPEC countries. That is a matter of opinion, but whatever one ‘s judgment it is now entirely irrelevant.
The discussions and the negotiations which the United States and the OECD’s SecretaryGeneral’s proposals promoted have led to the establishment of a fund about which the OPEC countries appear to be quite unconcerned. There is no evidence to suggest that OPEC countries regard the fund as an instrument of confrontation. Even France, which was concerned about some aspects of the United States proposals on this score and which declined for this reason to participate in the International Energy Agreement which also stemmed from the 2 United States proposals, has signed the Support Fund agreement.
In short, the new fund marks another important step forward in realistic and essential international co-operation. It provides an additional supplementary safety net to OECD member countries experiencing major balance of payments difficulties and will help enable them to make necessary external adjustments without resort to restrictionist and beggar my neighbour policies which could plunge the world down the path towards recession. The facility is restricted to OECD members, the great majority of which are developed nations. It is these countries in total which face the largest of any oil induced balance of payments deficits in the future. At the same time, developing countries have not been overlooked by the international financial community. The International Monetary Fund has recently substantially liberalised access to its compensatory financing facility which applies mainly to developing countries. As well, profits from sales of a portion of the IMF’s gold stock are to be used to establish a trust fund which will be available to the lowest per capita income countries on highly concessional terms.
Australia stands to gain immensely from an orderly and stable world financial, economic and trading environment. We have been through an unstable period in recent years. The so-called Bretton Woods international monetary system of fixed but adjustable exchange rates has broken down. There has been economic recession in most major developed countries which has had widespread international ramifications. There has been resort to increasing barriers to international trade. The wonder of it all is perhaps that the international economic order did not collapse into a state of chaos in the last 4 years or so. The reason it did not is that the major countries pulled back from the brink of the restrictionist and beggar my neighbour policies which characterised the 1930s,
We in Australia have a lesson to learn from this. We must recognise that we cannot hope to solve our internal economic problems by attempting to insulate ourselves from the rest of the world. We must recognise that we are an important and an integral part of the world economy and that we depend importantly for our own economic health upon the policies adopted by the rest of the world. We must recognise that we have a responsibility not only to ourselves but also to our trading partners to put our own economic house in order; and that is precisely what this present Government is moving so rapidly towards doing. We must recognise that if own economic house gets out of order we must adjust to put it back in order rather than attempt to protect ourselves by cutting ourselves off from the immense advantages that accrue to us through international trade and the relatively free flow of capital across national boundaries. What this means is that we must continue to learn to live co-operatively with the rest of the world. The OECD financial support fund agreement is a significant and a worthwhile further step in international financial co-operation. Accordingly I wholeheartedly support its ratification by this Parliament.
– It gives me great pleasure to take part in the second reading debate on the Organisation for Economic Cooperation and Development (Financial Support Fund) Bill 1976, particularly as the honourable member for Adelaide (Mr Hurford) has again indicated his support for a proposal of the Government. I trunk it is the second time in probably less than a week that I have had the opportunity of speaking in a debate in which the honourable member for Adelaide has indicated the Opposition’s support.
– You recognise that I am a reasonable man.
– As the honourable member points out, he is an eminently reasonable man, and I have a great deal of hope that he will be able to impose the views he holds upon other members of bis Party. I look forward to an increasing degree of co-operation between the Opposition and the Government in relation to the actions that the Government is trying to take to reduce inflation and unemployment and to deal with the other problems that we face in Australia at the moment. I am sure that if the honourable member for Adelaide is able to argue on this occasion as convincingly as he has on other occasions amongst members of his own parliamentary Party we will see a great deal of co-operation in this Parliament and, before a great deal of time has elapsed, jointly we will see Australia revert to a situation of far greater economic stability and a much larger degree of cooperation in the Parliament. I commend the honourable member for Adelaide for his approach, because it is refreshing, after a period of some years, to find an economic spokesman who is prepared to put to the Parliament on behalf of the Opposition constructive views and who is prepared to argue along the lines that the Government itself would argue in relation to so many of these issues that we face.
It is a matter of record that the oil crisis which obtained in the world in recent years had a significant effect on the economies of a large number of the trading nations of the world, particularly amongst the OECD countries. As was pointed out by the Treasurer (Mr Lynch) in his second reading speech on this Bill the net effect of the oil crises was that the OECD member nations, as a group, went from a situation in which they were running a balance of payments surplus on current account of US$2.5 billion in 1973 to a situation in 1974 in which the current account surplus turned into a deficit of US$33.25 billion. That turn around of something in excess of US$35 billion is representative of the effect largely of the oil crisis and the actions of the Organisation of Petroleum Exporting Countries in pursuing the policy on the pricing of oil that they chose to pursue. It is very difficult for many nations to adjust to the burden that that significant turn around has placed upon their domestic economies and their relationship with other countries.
That is the background to the desire to implement the agreement which has been put by the OECD and which some 8 countries have already ratified. We understand that a further 4 countries are about to do so. It appears that the remainder of the member countries of the OECD hope to be able to implement formal ratification of that proposal by the end of May. It is, I think, one of those examples of significant international co-operation in the field of trade that Australia, in concert with other member countries of the OECD, is prepared to undertake commitments which will assist the world as a trading entity to see that the effects of the oil crisis will not be too long term and will not cause significant degrees of disruption. The Australian economy is significantly dependent on overseas trade and obviously in our economic considerations we have a vested interest in seeing that trade is allowed to continue on a stable and growing basis and that we do not have significant disruptions in the pattern of world trade as a result of events such as the oil crisis. We therefore have a vested interest in seeing that this agreement is implemented. It appears from the support which has been offered by the honourable member for Adelaide- that most reasonable man- that there will not be any difficulties within this Parliament in the ratification by Australia of the agreement.
A smoothly operating world trade situation, free of major upheavals, is certainly in Australia’s interest, and it can only be in Australia’s interest. Therefore I think there should not be a great deal of argument about the ratification of this agreement. One of the important features of the legislation is that it has the effect of giving Australia’s agreement to the fund, and the fund is intended to play a great role in assisting in the recycling of the funds which flow between developed countries and which will offset the disadvantages which may be felt by individual economies as a result of the oil problems which we have faced in recent years. We hope that we will not have to face the problems again, but it certainly is not beyond the bounds of possibility that they may have to be faced. The implementation of the fund will have the effect of providing a degree of financial cooperation amongst the OECD countries during that adjustment process. I think that that is particularly important.
One of the main points of the Fund is that the intention is to assist OECD members so they will not have to take unilateral action in terms of trade and other measures which may restrict trade in order to try to alleviate the position which may exist in their own domestic economies as a result of the problems which flowed from the increase in the price of oil. Assuming that countries which are members of the OECD do manage their economies in a sensible fashion, and as long as they take the appropriate internal actions to overcome the problems that they may have encountered, and also as to the best of their ability they have taken the steps that are available to them in terms of other international funding arrangements, then as a provision of last resort this particular fund would come into operation for them. I think it is important from Australia’s own budgetary viewpoint that we be clear about just what the implications are in our own economy. The Treasurer has made it quite clear- I think there is no argument on either side of the House about this- that there is no immediate and probably no long term demand on Australia’s budgetary resources as a result of our agreement to ratify this arrangement and to be a party to it.
The system operates in such a way that each country has a quota. That quota is initially provided by way of guarantee. It is only in a last resort situation that any member country may be called upon actually to ‘come up with the money’, if that is an acceptable term to use. The size of the Fund will be equivalent to $A18.5 billion. The quota that Australia has agreed to meet is $A275m or about 1.5 per cent of that total figure. That is the maximum figure which Australia could conceivably be involved in guaranteeing at some stage or, in an extreme situation, having to fund. Member countries, including Australia, have access to the Fund under the arrangements by which as I indicated earlier and as previous speakers have indicated, they undertake financial domestic management and have made appropiate approaches to other resources of an international kind, statutory deposit reserves and other forms of financial assistance that may be available to them. All these things failing, a country- and Australia could conceivably be included among those countrieshas a right to go to the Fund and request an allocation from it. In that event the Fund will have a couple of options open to it. It can initially call on guarantees from the member and constituent parts of the Fund. It may have to make a direct call upon members, but if that is necessary, it is up to the member nations of the OECD to determine whether or not they will provide cash, whether they will raise loans themselves on the international market or whether they will allow the OECD to come into their own domestic capital market to raise the funds which are necessary.
It is important to understand that in this legislation there is no circumstance in which there needs to be a direct budgetary impact upon our economy or our own resources. If” the situation should arise in which Australia could be called upon to provide either a direct contribution or a guarantee then Australia could ask the Fund to borrow the required amount of money on its behalf in overseas markets. It is a pretty extreme situation that might occur, but in the event that it did happen that no funds were available on the overseas markets, then the contingent liability which falls to Australia means that it would have to make a decision as to whether it would allow the Fund to borrow in our own capital market or whether Australia would come up with the money. These are pretty remote situations. But even if it were to be the case, Australia would certainly earn a reasonable rate of interest on the funds that it might have to contribute. By and large the Fund is certainly an exercise in international co-operation. It is designed by the OECD to meet the problems of particular countries in overcoming the domestic problems that might arise as a result of the actions of the Organisation of Petroleum Exporting Countries which caused what is generally called the ‘oil crisis’ of the last couple of years. In some countries those problems can be extreme, but any country which is suffering those problems can at least operate in the secure knowledge that there is a lender of last resort in the form of this Fund. The Fund is there as a standby to assist that particular country and its economy to overcome oil crisis-related problems.
I think the Bill ought to be commended by this Parliament as a whole. I think it is a credit to the OECD that it has been able to negotiate an arrangement which will work to the benefit of its members, an arrangement which will enable the member nations of the OECD, should they have a problem arising from the oil crisis, to have that problem satisfied. That is conditional of course on their having taken the appropriate internal and external measures that may have been required to be taken before they approach this lender of last resort. The National Country Party has given a great deal of consideration to this particular Bill. The National Country Party, as a group, joins with the Liberal Party in wholeheartedly supporting the proposal which is before the Parliament. It is a matter of record that the National Country Party is committed to stability and growth in the overseas trade situation. Considering that no significant problems are developing between Australia as an economy and the other economies with which we have dealings, on this occasion the Party has asked me to make a specific point to the Minister assisting the Treasurer, the Minister for Post and Telecommunications (Mr Eric Robinson) who is at the table, that the Party is completely foursquare behind the proposals which the Government is putting in this respect. We have a great deal of respect for the OECD as an organisation. We feel that this proposal can only be of benefit to Australia. As such I, my Party, the Government as a whole and, I am pleased to say, on this occasion the Opposition support this action of the Government, thus making a totally united force in this Parliament. I commend the Bill to the House.
– The Government believes that the Financial Support Fund will constitute a valuable financial facility that could assist countries to adjust to changed economic circumstances without resort to measures which could damage world trade, production and employment. Australian participation in the Fund will be a demonstration of our support for a significant initiative in the field of international co-operation which will thereby strengthen our relations with our major allies and with our major trading partners. It is therefore gratifying that we have had the bipartisan approach to the debate on this occasion. On behalf of the Treasurer (Mr Lynch), I thank the shadow Treasurer, the honourable member for Adelaide (Mr Hurford). I regret that I was unable to be in the chamber to hear him speak. I also thank the honourable member for Ballaarat (Mr Short) and the honourable member for Hume (Mr Lusher) for their very valuable contributions to the debate.
Question resolved in the affirmative.
Bill read a second time.
Message from the Governor-General recommending appropriation announced.
Leave granted for third reading to be moved forthwith.
Bill (on motion by Mr Eric Robinson) read a third time.
Ministerial Statement Debate resumed.
– I must say that I am a little bit surprised that this matter should be resumed at 10.20 p.m. when at 10.30 p.m. the question will be put that the House adjourn. However, I am the next on the list to speak so nobly I step into the breach. But I think that the way in which the Government conducts the business of the House is a little casual.
If I may I will plunge into the substance of the economic statement made the other night by the Treasurer (Mr Lynch). I want to separate what seemed to me to be the major aspects of his statement. First of all, the statement on the one hand makes substantial improvements in respect of child endowment and on the other hand it takes away the tax rebate system for children. Secondly it purports to give its own variant of what it calls indexation of the tax schedules. Thirdly, it imposes a new tax under the guise of sustaining Medibank.
This afternoon I listened to the honourable member for Lilley (Mr Kevin Cairns) who chided one of my colleagues for saying that he made 4 propositions all of which were contradictory. I would suggest that the basic measures that were encompassed in this statement are contradictory as far as any improvement of the economy is concerned. First of all I want to take the question of child endowment versus tax indexation. We are told that the combined cost of child endowment plus the tax rebate system is of the order of $ 1,021m of which something like $240m, or about one-quarter, is attributable to the child endowment bill and something like three-quarters of the total cost is attributable to the tax rebate system. These 2 items make up the net cost of $ 1,021m that was given in the Treasurer’s speech. It is now proposed that we should introduce a child endowment system that will have approximately the same total cost but will distribute the overall benefits somewhat differently. It rather surprised me that the Liberal Party, of all parties, would introduce this system the way it has done.
– I bet you were shocked.
– I was not shocked; I was rather surprised, particularly when I listened to the sorts of arguments that were used in this House about 18 months ago when the new system of taxation was introduced. I simply make the point rather categorically that from now on the difference between married and single taxpayers as far as the tax system is concerned is no longer contained within the tax schedule but is contained within the payments for child endowment. I do not know whether this is an equitable way in which to meet this circumstantial difference. All I suggest is that not enough credit has been given or attention paid- and I think this is implicit enough in the kind of explanation that was given in the Treasurer’s speech- to what was done recently by the tax rebate system that was supposed to operate, and will operate certainly for the year ended June 1976, but will be terminated with respect to children as from 1 July 1976. I would have thought that the logical step would have been not only to remove deductions for children from the tax schedules but also to have removed deductions for wives from the tax schedules and put some kind of cash benefit upon what a wife is supposed to be worth.
– A good idea.
-Exactly. All I am suggesting is that as usual the Government has not -
– They are priceless. How can you value them?
-The Government believes that we can value children but it does not believe that we can value wives. All I suggest is that this situation simply shows the hotchpotch that can emerge if things are done in haste. When one looks at the -
– Would you not agree that they are 2 different arguments?
-I think they are 2 different arguments but I do not think that the Government has examined one of them. I am trying to suggest that the Government has been pushed hurriedly into doing something -
– Has Mrs Crean considered the proposal?
- Mrs Crean does not have to because we have no children left of a dependent age. But I still have her apparently valued as a tax rebate to me of $500.
-Order! I suggest that the honourable member for Melbourne Ports address himself to the Chair and leave the honourable member for Hume to make his own judgment.
- Mr Speaker, I am glad that you are now in the chair because I am a little bit irritated that this serious subject has been brought on for discussion at 10.20 p.m. and that presumably the debate will soon be terminated. I hope that someone will be courteous enough to extend to me the opportunity to continue my remarks to 1 1.35 p.m. which is the time at which my speaking time normally would run out. I simply say that the Government proposes to take children out of the tax system altogether. I am pleased to see that the honourable member for Macarthur (Mr Baume) is in the House because he made a great speech in this place a few weeks ago in which he referred to a charge of 35c in the dollar. I hope that he will acknowledge that that iniquity has been perpetrated by the method now being adopted. There is now a new definition which I am sure people have not acknowledged. There is a difference now between what was taxable income 2 years ago and what is the taxable income under the new regime that we introduced and, as I have said, the present Government is continuing. The Medibank proposal for a levy of 2.5 per cent, not of tax but of taxable income certainly bears out this difference. Nearly every honourable gentleman in this chamber at the moment will have a taxable income of approximately $20,000.
– No way in the world.
-And 2½ per cent of that taxable income will be taken up by the Medibank levy. If honourable gentlemen opposite dispute this I suggest that they have not followed this matter through carefully enough. They have made a breach. Who will gain except the supposed 800 000 children who belong to the 300 000 families whose incomes are not taxable?
– Are you opposed to it?
– I am asking honourable members opposite to think this matter through carefully. I do not think they have done so. Some taxpayers lose by what the Government is doing because every taxpayer on the sort of income level of honourable members in this place- and the Treasurer highlighted this point- lose $3.85 a week. If one adds up the present child endowment rate plus the allowance of $3.85 per week, which the tax rebate system for the year ended 1 976 applies, there are not too many gains in the process.
-Order! It being 10.30 p.m., in accordance with the order of the House of 18 February 1976 1 propose the question:
That the House do now adjourn.
– I require the question to be put forthwith without debate.
Question resolved in the negative.
Ministerial Statement Debate resumed.
– I thank the House for the courtesy of allowing me to finish my speech this evening. I have another question to ask: Given that the child endowment costs approximately the same as the child endowment plus the rebate, what will be the effect on 1 July when the tax deductions no longer apply for children? There will be an immediate withdrawal of take home pay to the extent of $780m.
– What, in the first week?
-No, at the annual rate. Surely to goodness you have enough intelligence to know that I am talking about an annual rate. They are your sums after all, not mine.
– If you are rude I will move that you be not further heard.
– You cannot. Anyway, I hope you do not. This seems to me to be one of the matters which has not been thought through. Every married taxpayer will lose his entitlement to claim for children and therefore his weekly deductions will be so much less. Carried through on an annual basis it will mean a withdrawal of $780m, matched presumably by that sum being transferred to the mothers of the community. I suggest that it is a bit hard to say whether there will be much net difference in the consumer -
– The honourable member can argue this later. The other thing I want to talk about is what I call the Government’s swindle of indexation. I heard it suggested here this afternoon that it means that people will be paying 13 per cent less in taxation.
– The former Prime Minister said that this afternoon in his speech. I hope that the honourable member believes that he is wrong. I have suggested here on other occasions that tax schedules should be adjusted annually. It may be done by the mythology of calling it indexation. If I may say so, it is a curious form of indexation. The Government chooses its own figure- 13 per cent- which is the consumer price index minus the effects of indirect tax. That is a dubious kind of application, to say the least. The Treasurer chooses as his prime example an income that may go from $10,000 to $1 1,300. What he does not say is that something like two-thirds of the population earn less than $ 10,000 anyway. It is nice to be able to choose your own example. What the Treasurer does not indicate, although he does it in the kind of odd lines, is that if a person happens to be somewhere between his range of $5,000 to $10,000 less than $1 1,300 there will be no change in his marginal rate of tax at all. The main advantage is in the lower down adjustments. Again, the effect of this indexation is to give the greatest advantage to the highest incomes.
-Well, the honourable member should work it through. All the junk about average rates being the same as before is, if I may say so, sheer nonsense. It is not the case that average rates for higher up will be somewhat less but rates for lower down will be much the same. Candidly, I do not know how the Government sells this kind of junk. Honourable members should consider this themselves. If a person’s income goes up from $10,000 to $1 1,300 he still pays additional tax on the $1,300, whatever the case may be.
– Order ! The honourable gentleman ‘s time has expired.
Debate (on motion by Mr Baume) adjourned.
Motion (by Mr Newman) proposed:
That the House do now adjourn.
-Last week during the grievance debate I was severely criticised by the honourable member for Newcastle (Mr Charles Jones) for my alleged failure to protest about a decision not to proceed with the building of a navigational aid vessel in the Cairns shipyard of North Queensland Engineers and Agents Pty Ltd. During his speech, to drive home his point, the honourable member for Newcastle mentioned me at least 6 times. I am flattered that he should have taken the trouble to mention me so often and I wonder whether he is worried that I may be doing an effective job in my electorate. His speech was full of misrepresentation and half truths. It is perhaps unfortunate for him that I have been taking a very great interest in this firm, NQEA, which is the largest employer of labour in Cairns.
I do not intend to involve myself in the gutter politics of innuendo and character assassination. I will confine myself to the facts of the case, which are well documented. In rather complicated syntax the honourable member for Newcastle criticised, to use his words ‘the decision of this Government to withdraw the decision of the Labor Government to award the tender to the North Queensland Engineers and Agents Pty Ltd in Cairns’. The facts are as follows: Tenders for the construction of a navigational aid vessel closed on 11 December 1974. In April 1975 NQEA in Cairns was asked to accept the tender. Unfortunately the contractual financial terms were not satisfactory to NQEA. I understand that the company would have had to carry the sum of approximately $2m over a period of 2 months pending completion of the vessel. As a result, on 1 8 September NQEA sent a telex to the Department of Transport, then headed by the honourable member for Newcastle, which read in part:
We are not prepared to accept the order or continue any further negotiations to build the Navaid vessel except on our conditions of profit on escalation and payments.
On 3 November 1975- note the date-the Department of Transport, still headed by the honourable member for Newcastle, sent a letter to NQEA which said in part: … it has been decided not to proceed with this project for the time being.
On 6 November NQEA sent a further letter to the Department which said:
We consider now that the refusal to negotiate comes from your Department and not from this company.
The firm, NQEA alleges that the Department of Transport refused to negotiate on the financial terms of the contract. It was the Department of Transport then headed by a Labor Minister, the honourable member for Newcastle, which cancelled the contract, not the present Government.
I agree that first class navigational aids are required for the area between Cairns and Darwin. Because of the delays in building the navigational aid vessel mentioned by the honourable member for Newcastle, his Department arranged for the building of a smaller vessel of, I think, 260 tonnes which has been built and is in service. The Department, under the honourable member for Newcastle, was satisfied that this smaller vessel could adequately maintain the navigational aid system as an interim measure. I understand that the situation will be reviewed in the light of experience to see whether a larger vessel is required.
I have been working very actively in an effort to assist NQEA to obtain further contracts and I have arranged appointments for the directors of that company to see appropriate Ministers and departmental officers on a number of occasions. I reiterate that the attack on me by the honourable member for Newcastle was quite unjustified as the contract to build a navigational aid vessel was cancelled by the department when he was Minister for Transport, not by the present Government.
– I want to read into the Hansard record an article which appeared in the Catholic newspaper of South Australia, the Southern Cross. It was written a couple of months go by Father P. R. Wilkinson. I believe the sentiments of the article are admirable. It is headed ‘To be unemployed is a social crime’. It reads:
What kind of spirit makes a lynching mob out of respectable southern towns in the United States?
Probably the same instincts that inspire Australians with jobs to put the boots into the unemployed.
To be unemployed in the 1930s was a human tragedy.
To be unemployed in the 1 970s is a disgrace.
Worse, in fact. It is a social crime.
That is a fair conclusion from the general complacency at the present levels of recorded unemployment- the highest since the Great Depression.
Ask 10 people what is their first thought associated with ‘unemployed’.
These days it is a fair bet the commonest answer will be ‘dole bludgers’.
There seems to be conventional wisdom around the country that the unemployed are long-haired surfies who do not want to work and who deserve to suffer.
What no-one seems to publicise much is the fact that the numbers of unemployed exceed job vacancies by 10 to one.
Hard work in searching may find someone a job, but mathematically he has only beaten nine others back in the queue.
For 90 per cent there is always no job. Who are the unemployed? Where are they?
There are no unemployed up and down our street. There are no huts on the Torrens, no soup kitchens. They must be surfies.
Everyone who reads this paper knows someone who really wanted work and went out and got it. The neighbor’s boy or the nephew’s friend.
And it just shows if they really want work they can get it.
We have all read about the employers who advertise for labor and get no-one.
It all proves that we virtuous ones are working hard, being taxed out of existence to support bludgers like those longhairs up and down the streets.
No wonder there are bloody-minded cheers every time a new Government obstacle is put in the way of the unemployed.
That will make sure they get off their tails and get an honest day’s work like the rest of us.
Lynch another dole-bludger.
From the sort of interjections we are hearing tonight this article sums up well the attitude of those on the Government side of the House. The article continues:
The white poor of the United States Deep South lynched their Negroes because they all had their horror stories of Negroes who raped and killed and assaulted and stole and lied.
And that shows you that Negroes are all sub-human and deserve to be lynched.
The question is which stories are most significant- the stories of the rapist Negroes or the unspectacular stories of quiet, responsible and long-suffering Negroes?
Which does the press live on?
Let one person continue receiving unemployment relief after he has work and there will be a page one story like that recently appearing in the Advertiser, ‘He can’t stop dole cheques’.
The papers are not carrying too many stories about the worker with a wife, four children and no job who is on the dole at $27 a week below the poverty line of the Henderson Commission.
That is the gap between the dole and the poverty line for a family of six.
People find it hard to get by even on average wages.
But who puts up stories in the press about the round of second-hand clothes, kids without new shoes, cars without registration, monthly payments further and further behind, the fans of life of family unemployment?
– You are reading.
-The article continues:
Do you know like the rest of Australia that Surfers Paradise is just full of young dole bludgers living off you and me?
The fact is that unemployment relief in the Gold Coast area is up to IS per cent below the national average of unemployed on relief.
– He is reading.
– Order ! The honourable member for Holt will cease interjecting.
-Those sort of interjections by the honourable member for Holt give him away and the sort of attitudes that he has. The article continues:
As for the large-scale dole cheating that we hear of in horror stories, last year’s total convicted of this was about 100, out of around 300 000 on benefits.
And what about the ones who put themselves down as deep-sea divers in Alice Springs or drovers in Hobart?
Well, how quickly would you take one job when you knew you had other qualifications?
Why do Australians take horror stories of bludgers as representative of the unemployed instead of the exceptions in a great human tragedy?
It is because most of us have the lynch mob mentality of people with jobs, security and a good deal of privilege.
On the other hand, one in 20 in the Australian workforce knows the disgrace today of being unable to get a job.
The greatest tragedy is that they are being made to feel they are bludgers because our society does this to them.
– The honourable member was reading.
-The honourable member’s time has expired.
– I intend in fact to speak to the House rather than to read to it.
-Order! The honourable member will resume his seat. The honourable member for Holt has interjected. The purpose of his interjection was to draw attention to the fact that the honourable member for Adelaide was reading. In fact, the honourable member for Adelaide was quoting; that is why he was reading.
– I raise a point of order. I must apologise to the Chair. I thought the honourable member for Adelaide was reading, but as you, Sir, say he was quoting, I must accept your ruling.
– I intend to speak rather than to read or quote. A most regrettable aberration took place in New South Wales quite recently where as a result of some promises, some deceit, and some misstatements the people of New South Wales were convinced that a gentleman known loosely as Nifty Neville but otherwise I believe described as the now Premier of New South Wales advised the constituency that in fact he would not impose double taxation unless it happened to be by indirect taxes, and he also brought into power a collection of people who have a degree of responsibility which is evidenced in the Sydney Morning Herald of yesterday. One of his Ministers, allegedly an expert in the area of health, said- and I quote, if I may:
People in New South Wales would now be forced to carry the full burden for heavy cost of health care without any Federal financial assistance.
This is the sort of material which is run in the Press in New South Wales, which according to honourable members opposite is in the hands or is the plaything of this side of the House. I might say that that story has not been denied in this newspaper. It is totally untrue. The facts of course, as I presume even some members of the Opposition would be well aware, are that $ 1,000m of Federal Government funds-that means taxpayers’ money- will go towards medical care, Medibank or whatever its subsititutes or alternatives are in the coming financial year. An amount of $800m will in effect be provided by these money raising procedures, which of course are simply aimed at requiring those people who can afford to pay for medicine to contribute to that cost. It is extraordinary, it is unbelievable that a Minister of the Crown of a State would not only be ignorant but also would be deliberately disruptive, deliberately misleadingdisgracefully I believe- and determined to set out to mislead the people of New South Wales about Medibank, about its future and about what is I believe a right and a proper end to a situation in which the workers of this nation have subsidised the health care through their taxes of the silvertails of this nation, to use an expression of the gentlemen who sit opposite. It is absurd and disgraceful that this gentleman in New South Wales should reject out of hand the proposition that the charge for private and intermediate hospital beds should, in fact, be something approaching- not close enough in my view- their economic cost. Do the Premier of New South Wales and the well-informed Mr Stewart, who can tell such unspeakable lies in the newspapers, knowing them to be untrue, support the view that pay as you earn tax collections from workers should go towards the maintenance of beds in private and intermediate wards? Do they support the view that the workers of this country should be subsidising the unnecessary health care, as it is described by the honourable member for Prospect (Dr Klugman), that goes on in private and intermediate wards. The honourable member for Prospect has some flashes of brilliance. I used to see them every now and then when he and I played football together. I support him very strongly in the comments he made last night. I entreat him to go along to Mr Stewart in New South Wales and inform him of the facts as he endeavoured to inform the people of Australia yesterday.
– Order! The honourable member’s time has expired.
Mr FitzPATRICK (Darling) (10.52)- It was very gratifying this evening to hear the honourable member for Adelaide (Mr Hurford) mention that excellent newspaper, the Southern Cross, and tell us how concerned it was about the tragedy of labelling sincere Australians as dole bludgers. It reminds me of my approach to the Liberal-Country Party Government some time in 1972 concerning the closure of the South Mine at Broken Hill. On that occasion 750 miners were concerned that they may have to go on the dole and a big delegation came from the mine to confer with the Government of that time. To Mr Street’s credit, he went to Broken Hill to investigate the matter.
– That is right, early 1972.
– Yes. Unfortunately no solution to the problem was found, even though it was pointed out that a lode in that town called the Western Mineralisation contains many millions of tons of low grade ore, and there was the possibility with a little assistance of finding another major ore body, as Northern Broken Hill Ltd did recently. Some 700 mine workers were to be put out of work. Fortunately a company called Mineral Mining and Metallurgy reopened that mine and in 6 months made over Sim profit. It introduced a new system and the workers themselves accepted some tightening of working conditions. They even went to the extent of offering to forgo the first 6 weeks wages so this company could get into operation. Unfortunately, it has now worked out most of the payable ore and without some government assistance those workers who showed the extent to which they were prepared to go to stay off the dole will be put out of work once again.
The reason for my rising tonight is that the honourable member for Adelaide reminded me of these things. I have been informed by telephone today that of the 350 workers remaining, 250 will be retrenched. Only the residue dumps will be worked to keep these employees working. I think it is tragic that a body of men who will go to any extent, even to the extent of accepting a worsening of working conditions and putting in their own money to get the company operating, will be unemployed. Fortunately, the company was able to borrow money and the employees did not have to forgo the first 6 weeks wages although they did buy a lot of shares in the company, and that is what helped keep it going during that period.
I ask the Government to consider this situation because there is every possibility that if the Government contributed half the amount of the social security benefits that would be payable to the 250 workers this mine would be able to keep going. One must remember the great amount of money that was paid into both the State and Federal Treasuries from the production of this line of lode. It started in 1S83 and is still going. Rich and wealthy mines are being worked at both ends of the lode. With some Government contribution the possibilities of the Western Mineralisation are enormous. There is a theory that as well as the main lode which has been mined since 1883 there is another major lode. This possibility is borne out by the fact that the North Mine was able to find another lode which was an extension of the main lode. A lot of low grade ore with pockets of good ore in it has already been found. I appeal to Government members to do their best to give these employees another opportunity to work the South Mine.
– Order! The honourable member ‘s time has expired.
– I say at the outset that what the honourable member for Darling (Mr FitzPatrick) said impressed me and I believe the matter he raised should be considered urgently. I am proud of the fact that over a number of years, in a little place like Hobart, I have been able to have a close connection with the trade union movement, not only as a member of Parliament but also as a practising lawyer advising individual trade union members. One union for which I have a great affection is the Australian Railways Union. Apparently that union has some affection for me because barely 10 weeks ago it invited me- a Liberal member of the Federal Parliament- to accompany a deputation to confront the Premier of Tasmania, a Labor Premier, and his Labor Minister for Transport.
It sickens me to see a union which is held in high esteem in Tasmania covered with shame and disgrace because of the action of 20 union bosses who decreed, without reference to the rank and file, that 50 000 members of the Australian Railways Union were going on strike because one man determined that he would not carry out his duty because of a view he held in relation to the mining of uranium. I have no fixed view at this point on the mining of uranium. But I suggest that the mass violence, the power outside the Parliament, which the Deputy Leader of the Opposition (Mr Uren) urged on the students at the University of Western Australia, reared its head yesterday with an abuse of power by the trade union movement which, in my opinion, shows that we have an irresponsible left wing element in this country which must be curbed and put down firmly by this Government. I believe that this is the only Government with the courage to take on these union bosses who decide that, whatever the majority of Australians want or think, they will make determinations and decrees and take over the country.
To give an idea of how little the people in Tasmania knew about this matter, the Australian Railways Union held a meeting yesterday morning in Hobart and the resolution it passed and which was made public by the Tasmanian President, Mr Jones, straight after the meeting was that it would not go on strike again in response to a national directive unless it was told the reasons for the strike and unless it had an opportunity of expressing an opinion at rank and file level. I suggest that yesterday’s performance was an abuse of power by an irresponsible minority which is determined, as is the Deputy Leader of the Opposition, to destroy the parliamentary system which operates in this country. As a former trade unionist and an honorary life member of a trade union- that might surprise honourable members opposite- I want to say that the dinkydie -
– Order! It being 1 1 p.m. the debate is interrupted. The House stands adjourned until 2.15 p.m. tomorrow. 1
House adjourned at 11 p.m.
The following answers to questions upon notice were circulated:
asked the Minister for Health, upon notice:
– The answer to the honourable member’s question is as follows:
asked the Minister for National Resources, upon notice
– The answer to the honourable member’s question is as follows:
(a) The catchment of Hume Reservoir is inspected continuously and comprehensively by the Soil Conservation Services of New South Wales and Victoria on behalf of the River Murray Commission, and these State authorities provide reports each year for inclusion in the Annual Reports of the River Murray Commission.
(a) The Victorian State Rivers and Water Supply Commission has considered this matter during its recent comprehensive investigation into salinity control and drainage in northern Victoria which is now the subject of a Victorian Parliamentary Public Works Committee Inquiry. This matter was also discussed in the Report to the River Murray Commission entitled ‘Murray Valley Salinity Investigation’ by Gutteridge, Haskins and Davey in 1970.
Wales and Victoria retain primary responsibility and on which the Commonwealth Government would have no power in terms of the Australian Constitution to take direct, unilateral action. Clause 28a of the River Murray Waters Agreement provides for measures and policing of measures to protect the catchment of the Hume Reservoir and I have no reason to believe that these are not adequate (see answer part (1)). However, any specific matters which are demonstrated to be of serious concern will be taken up in joint discussions with the respective State authorities.
The bulk of data available on water quality in the River Murray is available from South Australia. Until recently, such measurements of water quality were more directly related to agriculture. However, with the increase in use of the River Murray for domestic and recreational purposes, health aspects have been gaining greater prominence.
Fifteen locations along the River Murray in South Australia are now measured for a wide range of parameters on a monthly basis by the Engineering and Water Supply Department.
The Water Conservation and Irrigation Commission of New South Wales carries out measurements on salinity on a regular basis at a number of stream gauging stations along the River Murray. In addition, the State Pollution Control Commission of New South Wales has carried out surveys of pollution sources in New South Wales affecting the Murray and has commenced monitoring at selected stations.
In Victoria, pollution orientated monitoring programs have been initiated by the Environmental Protection Authority of that State. Bacteriological sampling and sampling of various chemical and physical indices are being carried out at a number of stations in the River Murray system by that State.
asked the Minister for Health, upon notices:
Are the producer and consumer adequately protected at the present time in the sale of cartons or orange juice and protein-enriched milk bread, in that there appears to be no minimum percentage of actual product required before it can be advertised and sold as such; if so, what are the safeguards; if not, what action will he take to provide the necessary protection.
– The answer to the honourable member’s question is as follows:
Protein Increased Milk Bread
The National Health and Medical Research Council’s Approved Food Standards require protein increased milk bread to contain not less than 4 per cent non fat milk solids and not less than 2.7 per cent nitrogen calculated on a moisture free basis.
The nitrogen content is used as an analytical specification of protein content.
Normal bread as consumed has a protein content between 7.8-8.5 per cent whereas protein increased bread in accordance with the NH and MRC Standard has a protein level between 15-16 percent.
The NH and MRC recommendation has been incorporated into all State Food Legislation with minor deviations.
Fruit juices- orange juice
Fruit juices generally, according to the NH and MRC recommended ‘Standard for Fruit Juices, Sweetened Fruit Juices and Concentrated Fruit Juices’ are not permitted to contain added water.
This recommendation has also been incorporated into State Food Legislation with the exception of Tasmania, (where at least 50 per cent of the drink must be fruit juice), and the Australian Territories.
The consumer and producer are therefore protected where NH and MRC Standards have been adopted. The administation and enforcement of food legislation is a matter for the States and Territories. The legislation program in both the Northern Territory and the Australian Capital Territory includes the adoption of NH and MRC recommended standards.
asked the Minister for Health, upon notice:
– The answer to the honourable member’s question is as follows:
am asked the Minister for Foreign Affairs, upon notice:
– The answer to the honourable member’s question is as follows:
am asked the Minister for Health, upon notice:
– The answer to the honourable member’s question is as follows:
am asked the Minister for Health, upon notice:
– The answer to the honourable member’s question is as follows:
Under the Program as currently administered, Commonwealth funds are not allocated to individual projects but are used to supplement total approved State programs. In the current year, $ 1 5.28m has been allocated to Queensland to supplement their total program which includes Boonah, Richmond and Yeppoon Hospitals.
The anticipated dates of completion of the new hospitals are as follows:
asked the Minister for Health, upon notice:
1 ) Is there any danger to the Australian livestock industry through the breeding of foot and mouth disease by means of (a) imported foodstuffs, either canned, processed or raw and
If so, what plans are in hand to safeguard the Australian industry from the risk of infection from these sources.
– The answer to the honourable member’s question is as follows:
asked the Minister for Primary Industry, upon notice:
– The answer to the honourable member’s question is as follows:
am asked the Minister for. Foreign Affairs, upon notice:
– The answer to the honourable member’s question is as follows:
asked the Minister for Health, upon notice:
– The answer to the honourable member’s question is as follows:
As the shortage of Myocrisin is only of a temporary nature it is unlikely that it will cause a problem for sufferers from arthritis. In addition, this medication is usually only given on an intermittent basis.
asked the Minster for Overseas Trade, upon notice:
– The answer to the honourable member’s question is as follows:
For this reason, the absence of an Australian Trade Commissioner Post in the Soviet Far East cannot be said to constitute a serious deficiency at this stage of the region’s development.
asked the Minister for Health, upon notice:
– The answer to the honourable member’s question is as follows:
Quarantine: Grain Ship MV Tyrol (Question No. 548)
asked the Minister for Primary Industry, upon notice:
– The answer to the honourable member’s question is as follows:
Grain residues found in the holds of the MV Tyrol were sprayed with insecticide there under Plant Quarantine supervision. After being placed in drums they were sprayed again and the drums were then sealed while still in the holds. The sealed drums were removed from the ship under Plant Quarantine supervision. The residues were subsequently fumigated for 48 hours and then deep buried.
Five holds of the vessel were fumigated, and three were sprayed.
The action taken was in accordance with instructions issued by the Department of Primary Industry, acting in cooperation with the Department of Health, under the authority of the Exports (Grain) Regulations, and was considered sufficient to cope with any risk of introduction of insects and plant pests.
asked the Minister for Defence, upon notice:
– The answer to the honourable member’s question is as follows:
The Materials Research Laboratories would not recommend any protective equipment which did not meet the specifications prescribed m these Standards.
The degree of danger to users of these facepieces would depend upon the type and concentration of the fumigant involved and the length of exposure.
asked the Minister for Defence, upon notice:
– The answer to the honourable member ‘s question is as follows:
asked the Minister representing the Minister for Industry and Commerce, upon notice:
Has consideration been given to restricting international travel by residents of Australia.
– The Minister for Industry and Commerce has provided the following answer to the honourable member’s question:
asked the Minister representing the Minister for Industry and Commerce, upon notice:
– The Minister for Industry and Commerce has provided the following answer to the honourable member’s question:
No strong criticisms of the Bill have been received although detailed discussions have been held with representatives of major sections of the travel industry. Following these discussions the industry has been undertaking a thorough examination of the Bill and I expect detailed submissions to be received within the next few weeks.
No assurances have been given that any specific proposals to be submitted by the industry will be accepted by the Government. Full consideration will be given to the facts and opinions put before it by the industry.
Pirelli Cable Manufacturing Company
-On 29 April 1976 (Hansard, pages 1736-7) the honourable member for La Trobe (Mr Baillieu) asked me a question without notice concerning the Pirelli Cable Manufacturing Company.
In my reply I indicated, inter alia, that a reference on the cable manufacturing industry had been made to the Industries Assistance Commission by the previous Government. It has since been drawn to my attention that the reference was in fact sent to the Commission on 5 January 1976, although the preparatory work which established the basis for the reference was undertaken during the previous Government’s period in office.
asked the Minister for Health, upon notice:
– The answer to the honourable member’s question is as follows:
am asked the Minister for Health, upon notice:
– The answer to the honourable member’s question is as follows:
In the current year $27.28m has been allocated to Victoria to supplement their total program.
Sunshine- The Hospitals and Charities Commission of Victoria has advised that sketch plans for the first stage of the Sunshine Hospital and Health Services complex have been completed, detail design is proceeding. It is estimated that construction of stage 1 will be completed in November 1977. Planning for stage II of the complex is proceeding but no definite date can be given for completion of stage II.
New Zealand-Australia Free Trade Agreement (Question No. 443) Mr Young asked the Minister for Overseas Trade, upon notice:
– The answer to the honourable member’s question is as follows:
asked the Minister representing the Minister for Administrative Services upon notice:
– The Minister for Administrative Services has provided me with the following answer to the honourable member’s question:
asked the Minister representing the Minister for Administrative Services, upon notice:
– The Minister for Administrative Services has provided the following answer to the honourable member’s question:
asked the Minister representing the Minister for Administrative Services, upon notice:
– The Minister for Administative Services has provided the following answer to the honourable member’s question:
Purchases of carpets for requirements of Australian Government posts overseas are the responsibility of the Overseas Property Bureau of my Department. Most purchases are made at the overseas posts and in the absence of any convenient central record, it would be necessary to examine all individual expenditure vouchers under the relevant appropriation in respect of each property unit at each of the overseas posts. This is impracticable and, in any case, the distinction between woollen and man-made fibres may not be shown.
In addition the office of the Purchasing Commission of my Department has purchased axminster and bedside rugs for the armed services comprising 80 per cent wool and 20 per cent man-made fibre for values as shown hereunder (there is no convenient record of quantities) in respect of the last three calendar years:
Year Value $
The Department of Construction, on the advice of an interdepartmental committee, which recommends furniture standards, has issued guidelines for the choice and procurement of floor coverings which (in so far as they are relevant for the purchase of carpets) provided that:
The Overseas Property Bureau arranges for carpet to be provided as a floor covering for overseas residences as required and in accordance with local practice, availability and cost of alternative coverings. Full carpeting is provided in all new office buildings constructed overseas on behalf of the Commonwealth Government where it is considered economically or practically sound to do so. Leased office space overseas is not normally carpeted by the Commonwealth and office space already owned is considered on an individual case basis when existing floor treatments are in need of replacement.
The Office of the Purchasing Commission’s purchases of rugs are based on sample requirements of the customer department, a basic requirement being durability consistent with economy.
asked the Minister for Overseas Trade, upon notice:
– The answer to the honourable member’s question is as follows:
Ministerial Visits Overseas (Question No. 427) . Mr Nicholls asked the Minister representing the Minister for Administrative Services, upon notice:
1 ) How many Ministers have undertaken overseas trips since 13 December 1975.
What was the period of each trip, and where did the Minister visit.
) What was the cost to the taxpayers of each trip.
How many persons accompanied each Minister on these trips.
– The Minister for Administrative Services has provided me with the fallowing answer to the honourable member’s question:
In view of the honourable member’s interest in this matter, I am also providing comparable information in respect of the former Government in Table 2 below.
All costs incurred by overseas posts in respect of the more recent visits may not yet be available and expenditure is as at 30 April 1976. Some Ministers have travelled by V.I.P. aircraft; however, the costs of maintaining these aircraft recurs irrespective of whether they are used by Ministers travelling overseas. Details of people travelling on V.I.P. flights are tabled in the Parliament from time to time, the most recent being on 18 May.
Numbers given for people accompanying each Minister are in respect of family and personal staff only. Apart from my own officers, I do not have details of departmental officers who may have accompanied Ministers and whose costs are borne by individual Ministers ‘ departments.
Cite as: Australia, House of Representatives, Debates, 25 May 1976, viewed 22 October 2017, <http://historichansard.net/hofreps/1976/19760525_reps_30_hor99/>.