House of Representatives
25 August 1976

30th Parliament · 1st Session

Mr SPEAKER (Rt Hon. B. M. Snedden, Q.C.) took the chair at 2.15 p.m., and read prayers.

page 521


The Clerk:

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

Grants to Child Care Centres

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 child centres (in particular the Lady Gowrie Child Centre, which is dependent on the grants to continue the good work in the inner city of Sydney), are in urgent need of the continuation of special grams to carry out their work for pre-school children.

That the centres have an influence as demonstration centres for students and professional personnel who visit the centres for demonstrations, tutorials and discussions.

Financial assistance to the centres would help to provide better organisation and management of sessional and long day care of children in a wide range of caring.

Your petitioners therefore humbly pray that the House urge the Government to ensure that grants to Child Centres in the inner City of Sydney are retained.

And your petitioners as in duty bound will ever pray. by Mr Armitage, Mr Keating, Mr Les McMahon, Mr Martin, Mr Stewart and Mr Antony Whitlam.

Petitions received.

Tasmanian Shipping Service

To the Honourable the Speaker and Members of the House of Representatives in the Parliament assembled. The Petition of the undersigned respectfully showeth:

That the decision to withdraw the Australian Trader from the Tasmanian service,

  1. is a great injustice to the State of Tasmania,
  2. has delivered a severe blow to the Tasmanian tourist industry, and
  3. has caused grave concern that this is the commencement of the dismantling of the Australian National Line.

Your petitioners therefore humbly pray that the House of Representatives in Parliament assembled will move to restore the Australian Trader to the Tasmanian service.

And your petitioners as in duty bound will ever pray. by Mr Armitage, Mr Bryant, Mr Les McMahon, Mr Morris and Mr Antony Whitlam.

Petitions received.


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:

  1. That the Australian government maintain the effective indexed value of education spending.
  2. That the Tertiary Education Assistance Scheme be immediately increased and indexed as recommended by the 1975 Williams Committee.
  3. That the Australian Government implement the 1 975 reports of the Schools Commission and the Technical and Further Education Commission; and introduce a secondary students living allowance scheme with principles in line with those advocated for the Tertiary Education Assistance Scheme.
  4. That the Australian Government implement the 1975 reports of the Australian Universities Commission and the Commission on Advanced Education and re-establish the principles of triennial planning.

And your petitioners as in duty bound will ever pray, by Mr MacKellar, Mr Beazley, Mr Crean and Mr Morris.

Petitions received.

Australian Broadcasting Commission

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

We, the undersigned citizens of the Commonwealth do humbly pray that the Commonwealth Government:

  1. Subscribe to the view that the Australian Broadcasting Commission belongs to the people and not to the government of the day whatever political party.
  2. Eschew all means, direct or indirect, of diminishing the independence of the Australian Broadcasting Commission.
  3. Reject all proposals for the introduction of advertising into A.B.C. programs.
  4. Develop methods for publicly funding the Commission which will prevent the granting or withholding of funds being used as a method of diminishing its independence.
  5. Ensure that any general inquiries into broadcasting in Australia which may seem desirable from time to time shall be conducted publicly and that strong representation of the public shall be included within the body conducting the inquiry.

And your petitioners as in duty bound will ever pray, by Mr Fry, Mr Haslem, Mr Jacobi and Mr Morris.

Petitions received.


To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. We the undersigned, citizens of the Commonwealth by this our humble petition respectfully showeth:

That Medibank has proved to be the cheapest and most efficient means of bringing health care to Australian citizens and that the citizens of Australia have received Medibank as a great and valued social reform.

That Medibank has proved itself to be a far superior system of health care than was offered by the private funds prior to July 1975.

Your petitioners therefore humbly pray that the Government will observe the promise made by the Prime Minister in his policy speech that ‘We will maintain Medibank and ensure the standard of health care does not decline’.

And your petitioners as in duty bound will ever pray. by Dr J. F. Cairns and Mr Chipp.

Petitions received.


To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens from the Wannon Electorate in the State of Victoria respectfully showeth:

That Medibank has proved to be the cheapest and most efficient means of bringing health care to Australian citizens and that the citizens of Australia have received Medibank as a great valued social reform.

That Medibank has proved itself to be a far superior system of health care than was offered by the private funds prior to July 1975.

Your petitioners therefore humbly pray that the Government will observe the promise made by the Prime Minister in his policy speech that ‘We will maintain Medibank and ensure the standard of health care does not decline’.

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

Petition received.

Social Security Payments

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 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 1 974, eroded by inflation, to increase grants to overcome the backlog.

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 shillings a week).

And your petitioners as in duty bound will ever pray. by Mr Sinclair and Mr Shipton.

Petitions received.


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 those who have retired and those who are about to retire, are being severely and adversely affected by inflation and Australian economic circumstances.

The continuance of the Means Test on pensions causes undue hardship to them.

We call on the Government to immediately abolish the Means Test on all Aged Pensions.

To ensure a pension for all on retirement, and a guarantee that all Australian citizens will retire with dignity.

Acknowledge that a pension is a ‘ Right and not a Charity ‘.

And your petitioners as in duty bound will ever pray. by Mr Viner and Mr Beazley.

Petitions 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:

  1. That we deplore the confusion generated by the Government’s proposals to radically modify the system of health insurance in Australia;
  2. That we believe the changes will destroy the concept of universality previously incorporated in Medibank;
  3. That the Government’s actions will lead to a two-class system of health care and thereby creating a division in Australian society;
  4. That the unnecessary duplication of health insurance funds created by Medibank and private organisations both operating will lead to gross administrative inefficiency, waste and increased costs.

Your petitioners therefore humbly pray that the House will urge the Government to retain at least the original Medibank scheme.

And your petitioners as in duty bound will ever pray. by Mr E. G. Whitlam and Mr Beazley.

Petitions received.


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 decision of the Government to introduce a 2.5 per cent levy on incomes to finance Medibank and to offer private health insurance as an alternative to Medibank.

  1. Constitutes a repudiation of an election promise to retain Medibank.
  2. Will place an unjust financial burden upon low and middle income earners.
  3. Will force many people out of Medibank and create a double standard of health care in Australia.
  4. Will destroy the principle of a comprehensive compulsory health insurance scheme for all Australians.

Your petitioners call upon the Australian Government:

  1. To strengthen and extend the principles of Medibank as a comprehensive compulsory health insurance scheme covering all Australians, from General Revenue.
  2. Provide equitable health care for all members of Australian society.

And your petitioners as in duty bound will ever pray. by Mr Falconer and Dr Jenkins.

Petitions received.

Chiropractic Services

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

  1. Whereas the West Australian State Government has seen fit to register chiropractors licensed under the provisions of the Chiropractors Act 1964. This unique and specific branch of the healing arts is utilised by an ever-increasing cross section of the public who can neither gain compensation nor make claim for expenses so incurred under existing income tax provisions.
  2. Whereas your petitioners respectfully request that action be taken to provide legislation to cover both of these matters in the States or Territories where chiropractic is recognised by the administrative powers.
  3. Whereas your petitioners respectfully request consideration be given to:

    1. Adequate cover by Federal health insurance schemes.
    2. That fees payable to a chiropractor, qualified under the States or Territories Chiropractic Registration Acts, be made a full tax deductible item. Both of the above being without the prerequisite of referral by a medical practitioner.

Therefore your petitioners pray your honourable House to legislate accommodation of these matters under the provisions of Federal law.

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

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 by1 980 whales could be extinct;

That if whales become extinct the balance of nature will be upset.

Your petitioners therefore humbly pray that the House urge the Government to introduce legislation making it an offence to kill a whale.

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

Petition received.


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

The urgent need for a community owned and operated public access radio broadcasting station to service the mid western suburbs of Sydney and in particular the Municipalities of Ashfield, Concord, Drummoyne and Strathfield.

Your petitioners most humbly pray that the House of Representatives in Parliament assembled should grant a licence for this purpose to 2RDJ FM Community Radio.

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

Petition received.

Metric System

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned electors of the Division of Capricornia respectfully showeth:

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

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

That the traditional weights and measures are eminently satisfactory.

Your petitioners therefore humbly pray that the House take steps to repeal the Metric Conversion Act and restore the traditional and familiar weights and measures.

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

Petition received.


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 because drastic changes have been announced to the Medibank scheme over fifty per cent of Australian citizens and residents will be forced out of the scheme due to higher costs whilst those remaining will be facing steep increases in contributions caused by these changes.

Your petitioners humbly pray that the members of the House assembled will take the most urgent steps to ensure:

That the original Medibank National Health Insurance Scheme continues intact, offfering minimum health and medical coverage to all Australian citizens and residents.

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

Petition received.

Income Tax: Land and Water Rates

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

That the undersigned persons believe that the $300 limit on income tax deductibility in respect of personal residential land and water fates is unrealistic and is a discriminatory income tax penalty.

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

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

Petition received.

Australian Broadcasting Commission

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 Australian Broadcasting Commission has rendered great service to the Australian public through the provision of high quality music, drama, education and current affairs programs as well as sponsoring the presentation of excellent concerts.

The Australian Broadcasting Commission has encouraged the production of Australian programs and has supported through employment a wide range of talented people.

Suggestions are being made by some people that the Australian Broadcasting Commission boost its revenue by accepting advertising but that this is anathema to the petitioners.

The Australian Broadcasting Commission should have its funds fully restored and its independence reaffirmed.

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

Petition received.


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 recent outbreak of racial riots and killings in South Africa.

We your petitioners do therefore humbly pray that the Australian Government:

  1. call upon the South African Government to eliminate apartheid and racial discrimination;
  2. withdraw the Australian Trade Commissioners from South Africa, in accordance with U.N. resolution 341 1G (December 1975).

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

Petition received.


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

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

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

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

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

Petition received.

Dockyards at Newcastle

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

That shipbuilding and repairs play a vital role in the economic stability of the Newcastle region.

That a recent study by the Hunter Valley Research Foundation showed that 50 000 people were partially or wholly maintained by the State Dockyard.

That stability is at present in jeopardy, as a new ship order is required within the next few weeks if serious unemployment and hardship is to be avoided.

That the previous Government’s plan for the building of a graving dock in Newcastle should be continued as proper ship repair facilities are a vital factor in the maintenance of a viable shipbuilding industry.

That the Government’s election pledge to restore business and cut unemployment can be implemented in Newcastle if new orders and a graving dock are granted.

Your petitioners therefore humbly pray that the Government place immediate orders with the Newcastle State Dockyard and implement the previous Government’s plan to build a graving dock in Newcastle.

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

Petition received.

Teachers from Overseas

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 under the grave economic circumstances which we are facing today in Australia, any move made by the Government to recruit teachers from overseas would further aggravate teacher unemployment and restrict the employment opportunities of graduating teachers.

Your petitioners therefore humbly pray that the House urge the Government to restrict the further entry into Australia of teachers from overseas.

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

Petition received.

Leichhardt Women’s Community Health Centre

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

That the services we offer to women are in danger of being curtailed due to a change in government policy thus depriving women of the kind of advice and treatment that they seek at the Leichhardt Women’s Community Health Centre.

Your petitioners therefore humbly pray that Parliament will continue to provide sums of money adequate to the continuation and if necessary, expansion of the centre.

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

Petition received.

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– I direct my question to the Treasurer. In Budget Statement No. 2 attached to the Budget Speech the Treasurer forecast a rate of growth in the money supply of 10 to 12 per cent during 1976-77. He claimed that this growth will result mainly from domestic factors as he anticipates imports growing slightly faster than exports, leading to a position of approximate balance in our external balance of payments. Will this anticipated money growth occur if tax concessions to foreign based mining companies result in a large inflow of foreign equity capital? What effect would this unplanned rise in domestic liquidity have on inflation during 1976-77?


– I say in clear and unequivocal terms that, as and when there is a large inflow of overseas capital to underwrite economic recovery in the mining sector, it will certainly be welcomed by the members of this Administration. If there was one thing that the Labor Party did while it was in power it was effectively to wind down mining exploration and all of the fortunes of those people who were concerned with the industry. There was a flow-on effect to the general Australian economy and this added to the recession which the Deputy Leader of the Opposition and his colleagues caused during their period in office. As to the guidelines put down for the rate of increase in the money supply measured on the M3 basis, they are clearly shown to be between 10 and 12 per cent. Of course, these figures are subject to revision as circumstances change throughout the year. If the eventuality to which the honourable gentleman draws attention takes place- and we expect there will be a return to the previous flow of overseas capital to Australia during the period aheadthat will be taken into account.

The various components that make up the overall growth of the money supply- the formation factors- always represent a complex area. For the information of the honourable gentleman, I point out that apart from the fact that he has pointed to, there are the out-flow going into the community as the result of the Government’s deficit, transactions between the Reserve Bank and the private sector, the question of bank lending, net change in bank assets or liabilities other than loans, net purchases of Government securities by the non-bank sector and the public holding of coins and notes. This is a mix of factors, but the target- I think guideline is a better term to use here- takes all those factors into account. The position will be watched as closely as it was watched during the course of the past 6 months.

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Mr Giles having addressed a question to the Prime Minister.


-Order! The honourable gentleman is referring to a debate that is currently before the House. The question is out of order.

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– My question to the Treasurer relates to the crucial need for a natural disaster insurance scheme. The Treasurer will recall my persistent questions on this matter and his commitment, as I understand it, to set up a working party to investigate and to report on the feasibility of such a scheme. That report, as I recall, was to be tabled in this Parliament at the end of the last sessional period or at least by July. Can the Treasurer inform the House whether he has received, or when he will receive, the working party report? More importantly, when will the legislation enabling a natural disaster insurance scheme to be established be presented in this House?


– In March of this year in response to a question raised, I think, by the honourable gentleman, I took steps in this direction. The honourable member for Hawker indicates that it was in response to his questions and I accept his assurance on that. He and the honourable member for Balaclava, as well as other members on both sides of the House, have a very real and genuine interest in this program. The facts are these: In March of this year I indicated that the Government accepted in principle the need for a natural disaster insurance program because of the glaring inadequacy of existing insurance arrangements in relation to natural disasters. Since that time, as the honourable gentleman is aware, a working party has operated with the private sector- the insurance industry- and has only recently reported to Government. The matter is now before the Government. I shall give the matter expeditious handling and I shall let the honourable member know, as soon as I am in a position to report to this House, what decisions are taken. The Government regards the question which the honourable gentleman has raised as one of high priority requiring action by the Government.

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-My question is directed to the Minister for Health. Is it a fact that a pensioner holding a pensioner health benefit card will not have to pay a Medibank levy?

Minister for Health · GWYDIR, NEW SOUTH WALES · NCP/NP

– Those pensioners who hold pensioner health benefit cards will not have to pay any Medibank levy. Of course pensioners above the means test and those with high incomes will be expected to pay the levy if they do not privately insure. Successive governments have always recognised that pensioners generally have a much higher call upon the provision of health care and therefore have a much higher health care cost to themselves. This Government will continue to maintain that principle.

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Dr J F Cairns:

-I ask the Minister for Employment and Industrial Relations a question about unemployment. He will know that funds for his Department have fallen from about $300m to $145m, for the provision of employment services from $144m to $lm and even for retraining by $10m. In view of those facts I ask the Minister: Is it not a fact that in its obsession with the deficit -


-Order! The honourable gentleman is introducing argument to the question. I ask him to ask his question.

Dr J F Cairns:

-Is it not a fact that the Government will be quite unable to attend to the problems of unemployment even as outlined by him yesterday in answer to questions? Is it not a fact that the Government has no concern whatever for either the economic effect or the human effect of unemployment?


-Order! The honourable gentleman is arguing the issue. I call the Minister.

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

-The main cause of the reduction in funds to which the honourable member refers is, of course, the phasing out of the Regional Employment Development scheme, a decision which I remind the House was taken by the previous Government and confirmed by this Government when it came to office. So far as retraining is concerned, the Government is committed to the continuation of the National Employment and Training scheme and I am pleased to report that there are increasing numbers receiving training under that scheme with greater emphasis on in-plant training.

The Australian people have already seen the disastrous effects of trying to spend our way out of unemployment. I understand that the honourable member himself when in government was a strong advocate of that form of financial management of the country which was proved to be hopelessly unsuccessful. Such action in fact would be an absolute guarantee of a renewed increase in inflation with the inevitable concurrent rise in unemployment. The Government on the other hand does have a concern not only for those in employment but also for those who are unemployed and who would have no hope whatever of getting a job back again under the policies which are espoused by the honourable member.

BUDGET STATEMENT No. 2: LEVEL OF UNEMPLOYMENT Mr GRAHAM- I direct my question to the Treasurer. Has the honourable gentleman detected clandestine influences of obscure origin which are peddling theories about Budget Statement No. 2? Does the analysis contained in Budget Statement No. 2 support the assertion that the Budget is based on an increase in the level of unemployment?


– I have noted the obscure theories that have been subject to assertion by the Opposition. In fact, so far as Budget Statement No. 2 is concerned, as I have endeavoured to make clear in this House day after day, that statement shows that the number of people out of work will be smaller in June 1 977 than in June 1976.’ But I believe that the Leader of the Opposition has deliberately sought to obscure that fact and to distort the assumptions which are built into page 25. I quote what the honourable gentleman said in this House last night. He said:

The Treasurer estimates that employment will be 1.5 per cent higher this financial year while the work force is expected to grow by up to 2 per cent.

The Leader of the Opposition in that statement is confusing the estimate in Budget Statement No. 2 for growth in employment for the year as a whole with the growth in employment over the year. For the information of the honourable gentleman I point out that the Budget statements say that growth in employment is expected to be more than 2 per cent over the year and growth in the labour force will be 2 per cent at most over the year; this means that employment will increase at a faster rate over the year than the labour force.

It does the Leader of the Opposition little credit to seek to confuse and to distort what in fact are Treasury forecasts and assumptions which are put down in Budget Statement No. 2. 1 remind the honourable gentleman- not that I would hope he would need reminding in this House- that employment actually declined last year as a consequence of the Budget which his Treasurer brought down.

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-That is a question that I will need to take on notice. I think that the honourable gentleman and the House will be very much aware that although Budget figures across all areas of Commonwealth expenditure do cross my desk the compilation of the Budget papers, it is just not possible to recall them with accuracy sufficient to give this House an explanation for all of them. The honourable gentleman has drawn attention to the significant area of isolated children. I note and recognise that matter and I do not seek to dispute its significance. I shall provide him with an answer in writing some time during the afternoon.

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– I ask the Prime Minister: When will the Government complete its review of Aboriginal services and revise expenditure on Aboriginal welfare, as foreshadowed by the Treasurer in his Budget Speech last week?

Prime Minister · WANNON, VICTORIA · LP

– The Government is pressing ahead with the reviews of a very large number of programs as rapidly as possible. I cannot give a precise time as to when the reviews will be complete but people are working on that task and on nothing else until it is completed. It is regarded as a matter of the highest priority. I would like to add that the Government is concerned with the effective delivery of programs and not merely with spending money. There is a great difference. Under the previous Administration a very large amount of money was, in fact, spent but the effective delivery of programs in many cases was virtually non-existent. To achieve effective delivery of programs and services is important and is one of the tasks of the reviews being undertaken. When the money is allocated the Government wants to make sure that it will get to the Aboriginal people and do some good and not be frittered along the way in administrative costs or go to a contractor who will not provide any benefit at all to the Aborigines.

I would like to add something else which, I think, has not been taken note of by the House hitherto. That is that the Government’s new program of family allowances is of specific and particular relevance to the Aboriginal people. I think all honourable members would agree that many Aborigines would be most unlikely to be in income brackets where they would be able to obtain full benefit from the old family rebate scheme. They will certainly all get full benefit from the system of family allowances. About $ 16m is involved in that. I do not suggest that that is a substitute for direct programs; it is not. However, it involves funds which go directly to Aboriginal families and gives them an independence and capacity to spend those funds as they believe best in their own interests. Finally, I must say that many commentators seem unable to read the Treasurer’s Budget Speech. Many people have said that there was a decision to reduce the funds. Many people have referred to the fact, now becoming well known, that additional funds will be provided, as a subsequent decision. I refer those people to page 17 of the Budget Speech which states in very plain terms:

In the light of those reviews additional funds will - not ‘ may ‘ or ‘ might ‘- be provided.

That was said on Budget night. That is the firm position of the Government and there should be no doubt about it.

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Mr E G Whitlam:

– I address a question to the Treasurer. In his statement to the House on 20 May he announced that an independent committee would inquire into the Adelaide-Crystal Brook railway project and the Tasmanian system and that reports on these matters were expected within 2 months. In his Budget Speech last week, however, he stated that the committee had not yet completed its inquiry or made its reports. I therefore ask: When does he now expect that the reports will be made? Will the reports be published? The honourable gentleman also mentioned on 20 May, but not in his Budget Speech, that there was to be a review of the construction standards and costs of the Tarcoola-Alice Springs railway project. I ask: What was the outcome of that review?


-The Minister for Transport will answer the question.

Minister for Transport · GIPPSLAND, VICTORIA · LP

-The reason for the delay in the reports on these matters coming to the Government is that we had some difficulty in securing the valuable services of the people we wanted to appoint to the committees of inquiry. I hope that I shall be in a position to announce the membership of those committees within a few days.

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-I ask the Minister for Environment, Housing and Community Development: Did Press reports which appeared following his recent visit to Adelaide correctly represent his views on the desirability of the Monarto project?

Minister for Environment, Housing and Community Development · BASS, TASMANIA · LP

– I thank the honourable member for Sturt for bringing these Press reports to my attention last night. I cannot recall, in any conversations or in any correspondence with the Premier of South Australia, making a personal comment on how I felt about the Monarto project. If I were to give an opinion, and I am willing to give it now, it would be that I have some doubts about the viability of Monarto. I say this for a number of reasons, but I shall summarise only the important ones here. It is a State project. The State obviously has not decided on a time scale for the development of Monarto. As far as I know, there is no precise development plan. There are serious questions about the growth projections of Adelaide. They are my opinions. I might say that they are short term opinions. As to the long term opinions of the Government, as has been announced previously, the Government has the whole question of growth centres under review. The question of Monarto will be decided in that review. When we have made up our mind we will announce our decision.

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– I direct my question to the Prime Minister. Has there yet been an irrevocable signing of the necessary documents to allow the construction in Japan of the four 15 000-ton Australian National Line and the two 13 000-ton Broken Hill Pty Co. Ltd ships?


– I do not know the precise position in relation to the detailed negotiations. The Government made a decision about these matters at an earlier point, and it has not seen any reason why it should reverse its decision in relation to the Australian National Line ships. For the information of honourable members, I am happy to table a letter to the Premier of New South Wales as I indicated yesterday that I would.

Mr E G Whitlam:

– It can be incorporated in Hansard.


-Does the Prime Minister request that it be incorporated in Hansard! I understand that leave will be granted.


– I seek leave to have it incorporated in Hansard.


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

To: The Hon. Neville Wran, Q.C., M.L.A. Premier of New South Wales Sydney

From: the Prime Minister Immediate

I refer to your telex message today in which you sought deferral of finalisation of the contracts for ANL to acquire overseas four IS 000 tonne bulk carriers.

While I appreciate your concern in this matter I must inform you that it Would riot be practicable for the Commonwealth Government id intervene in this matter, which is now essentially a commercial arrangement between ANL and the shipyard concerned. As you will be aware, the ANL’s application to obtain these vessels from overseas has been approved in accordance with existing policy This policy, introduced by our predecessors, allows for import approval provided the price of a new overseas ship is tower man the after-subsidy price of a similar Australian built ship and yards have been given a reasonable opportunity to tender. These conditions nave been fulfilled in ANL’s .case. I am informed that the tender price of the vessels from Japanese yards is some $40 million, and that the lowest Australian tender, after taking subsidy into account, far exceeded this figure.

I have felt it necessary to make this point clear because, while I would not wish to constrict unnecessarily the range of matters our discussions on Friday can cover, nor the scope for action following receipt of the IAC report, there is no scope for intervention in the processes that have already been put in train in respect of the ANL orders.

There is one further point I should add. As my colleagues the Ministers for Industry and Commerce and transport have announced Bulkships Ltd is being authorised to place an order overseas for a specialised 4000 tonne cement carrier. Again, the lowest Australian tender price for this vessel, after taking subsidy into account, was considerably higher than the lowest overseas tender price, the early delivery of this vessel is essential to avoid harmful effects to the Tasmanian cement industry.

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-Has the Minister representing the Minister for Social Security seen Press reports indicating that there is some confusion in Tasmania over the way in which claims for unemployment benefit from farmers are being processed and whether it is necessary for such claims io go to Canberra for approval if primary producers .are engaged in industries other than beef, dairying Or fruit? Can the Minister inform the House whether this is correct? If it is correct, can steps be taken to review this practice so that claims can be assessed in Tasmania without the need to incur extra time in forwarding them to Canberra?


– The honourable member for Franklin has taken a considerable interest in this matter. The Minister for Social Security has responded to the representations that the honourable member has made, so I understand, to ensure that the problem to which he alluded is overcome by allowing the State Director of the Department of Social Security to handle applications from unemployed farmers outside the categories to which the honourable member referred. This of course will overcome some of the confusion and speed up the payment of unemployment benefits to farmers in Tasmania who are in great need. However, if there are indications of substantial applications, the State Director will be asked to inform the DirectorGeneral in Canberra of that development. I thank the honourable member for Franklin for the excellent work he has done for those people he represents.

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– Is the Minister for Aboriginal Affairs aware that at least 50 per cent of Aboriginal children in the Northern Territory suffer from malnutrition? Can he confirm that all supplementary feeding programs for Aboriginal children in the Northern Territory have been terminated at a saving of $200,000? Are the Western Australian and Queensland Governments continuing at an increased rate supplementary nutritional programs for Aboriginal children in their States? If the facts are as stated, why is the Government so callous in its treatment of the -


-Order! The honourable gentleman may not introduce argument into the question.


-That is the question. Is it true that the supplementary feeding program in the Northern Territory has been reduced by $200,000?

Minister for Aboriginal Affairs · STIRLING, WESTERN AUSTRALIA · LP

– A number of nutritional programs for children are under way in the Northern Territory. Some communities have expressed the desire that these supplementary meal programs be not continued because they want to cook and supply the meals themselves. So in certain instances they have expressly requested that the programs be not continued. The supplementary food program for children is under review by me in conjunction with my colleague the Minister for Health. When this review has been completed decisions will be made by the Government as to the level at which the programs will be supported in the future.

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– I direct my question to either the Treasurer or the Minister for Primary Industry. It relates to the proposed income equalisation deposits. I refer to that portion of the Treasurer’s statement in which he said that IEDs would commence with the income year 1975-76. 1 ask: Is the Minister in a position to indicate how this will be operated, particularly in the case of those taxpayers who have already furnished their income tax returns for the year 1975-76?


– I call the Minister for Primary Industry.

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

-In the Budget the Treasurer specified the entitlement of persons seeking to take out income equalisation deposits to invest with respect to income earned during the 1975-76 financial year. For example, that would mean that a wheat farmer whose wheat income in the last grain growing season was fairly high, as many incomes were, but who expects this year to have a low income, might decide to invest his excess income rather than to pay it by way of tax. However, the whole concept of investment and the nature of the application of income equalisation deposits will be announced by the Treasurer or by me within the next couple of weeks. Of course, legislation will be necessary. A number of details need to be examined. Before the nature of the investment is finalised legislation will be introduced into this Parliament and it will be on the basis of that legislation that a person’s individual entitlement will finally be determined.

I believe that this is a very worthwhile implementation of an Industries Assistance Commission recommendation. It is a way by which the marked instability in farmers ‘incomes can be offset. It is a way by which funds can be put aside in a good year to offset the disadvantages of a downturn in income whether due to seasons or markets. I am quite sure that it will be a very real help to the farming community. The scheme has been recommended by producer bodies throughout Australia for many years. Although many farmers are unfortunately not now profitable, there are still some- particularly in the sugar and grain growing industries- who may find that they can take present advantage of it. For those in other sectors we hope that, as a result of the very firm and positive economic program being introduced by this Government, they and all members of the rural community will again return to profitability, and of course everybody will then be able to benefit.

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Mr Les McMahon:

– I preface my question to the Minister for Health by quoting from the section headed ‘Bulk Billing’ on page 12 of the Medibank explanatory booklet. It states:

After 1 October, practitioners will be able to continue ‘bulk billing’- that is, sending bills direct to Medibank if they choose- provided you are in Standard Medibank or contributing to Medibank Private Insurance.

I ask: What safeguards are to be introduced to ensure that a bulk billing medical practitioner can be certain that the patient is indeed a current and financial member of the Medibank standard or private fund? If in good faith a doctor bulk bills Medibank for a patient who is not a current and financial member of one of the Medibank funds, will the doctor be reprimanded in any way or made to carry the full cost of the service provided?


– We have asked the medical profession to continue to bulk bill for pensioner patients and to accept the payment of the benefit as payment in full for the services that have been rendered. When the patient goes into the doctor’s surgery he will be in a position to identify whether he is a member of Medibank Public or whether he is privately insured. If the doctor sends the bill to Medibank for services rendered to a patient it will be checked out against the record in Medibank Public. So there will be a clear record kept by Medibank which will determine whether in fact a patient is privately insured or whether he is covered by Medibank Public.

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– Can the Treasurer tell the House whether public reaction to last week’s Budget indicates widespread support by the people of Australia?


-Order! The honourable gentleman is asking for an opinion. He is entitled to seek facts.


– May I ask the question again, Mr Speaker?


– Yes, and it had better be right this time.


– What reports has the Treasurer received about public reaction to last week’s Budget, and are those reports favourable?


– If I may say so in response to the honourable gentleman’s question, even if you cannot win them all, I think we have won most of them on this occasion. I mean by that that if one assesses the reaction to the Budget, whether on the basis of telephone calls my office has received, the calls which back benchers in the Government parties certainly have received throughout Australia- and back benchers are an important part of the team, because on this side of the House we operate as a team- or whether-

Mr Morris:

– You could have fooled me.


– It would not take a great deal to fool the honourable gentleman either. Whether reaction is measured on those bases, or whether indeed one takes a passing interest in what the media of Australia have said about this Budget as compared with previous Federal Budgets, this Government has every reason to be delighted with the reaction which has been received from the media, from the Australian public and from the business community which is responsible for providing the jobs which the honourable gentlemen opposite talk about.

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Mr Les Johnson:

-I direct my question to the Treasurer. Has the Government repudiated the previous Government’s undertaking to exempt from tax the income which the thalidomide victims receive from trust funds invested for them? Is the effect of the new decision such that the Government will make a grant of $150,000 and reap more than $814,000 in tax over the next 12 years? Will the Treasurer reconsider this matter and take into account that the governments of Sweden and West Germany altered their tax laws to give such relief and that the British Government gave a grant to each child equivalent to the amount of tax to be paid?


-The matter referred to by the honourable gentleman has been before the Government on an earlier occasion. At that stage the Government did announce the concept of a grant. Since then Sir Kenneth Anderson, the Chairman of the Thalidomide Foundation in Sydney, has made further representations to me. I have indicated to Sir Kenneth by telephone that those representations are before me at the present time and that they will be before the Government at an early date. I might say that the Government is very conscious of its obligation in this general area. The honourable gentleman referred to an earlier government decision. I assume that he was referring to a decision of the previous Administration. My understanding of the facts on that particular score is simply this: The then Treasurer, the honourable member for Melbourne Ports, indicated to a deputation that he personally was in favour of the provision of tax exemption; at that stage the matter rested and no action -

Mr Les Johnson:

– He told the House that.


-I accept that he told the House; the matter is not in dispute. I am simply agreeing, and I want to give credit to the honourable gentleman for the position that he took at that stage. I accept that his actions were genuinely motivated. It is a very complex area. What the Government is intent on doing is to provide the best benefit to the victims of the drug thalidomide but at the same time not to create problems in relation to other crippled and handicapped children of whom there are a large number throughout the country. What I said to Sir Kenneth Anderson was that his representations would be brought before the Government at the earliest opportunity after being processed at the official level. As soon as I am in a position to advise the honourable gentleman of the Government’s decision, I shall do so.

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– My question, which is directed to the Minister for Primary Industry, relates to the plight of thousands of Australian dairy farmers who are in a desperate situation because of factors beyond their control, such as overseas markets and severe drought conditons. It also relates to the jobs of thousands of other people who depend on the dairy industry for employment. I ask: What action has the Federal Government taken? Has it further action in mind? Has the Minister been urging the State governments to use the considerable powers they possess to help this industry and to meet their responsibilities in this matter. Have the State governments done all they can or should do?


– As the honourable gentleman so rightly stated in his question, the predicament in which dairy farmers throughout Australia find themselves is one of considerable uncertainty. The assistance that the Government has provided has been of an interim nature. It has been introduced in conjunction with State governments in an endeavour to prevent what might well have been a totally unsatisfactory opening price level for milk products. If the price per pound of butterfat had been about 32c, as it might well have been, then every dairy farmer in Australia would have been in a quite hopeless position. As a result we felt that something needed to be done. We have provided underwriting to ensure that on butter, skim milk powder, casein and cheese a minimum price would be payable to ensure that the price is lifted to a 50c minimum on an efficient dairy factory basis.

There are problems in knowing where we are to go in the future. To ensure that this was not just an arbitary decision, the Government commissioned the Industries Assistance Commission to produce a report, which is expected at the end of this month, advising on long term assistance for the dairy industry. Sir John Crawford hopes to discuss his interim report with the community, I understand, in the course of the next week. It will be in the same form as a normal draft report on LAC findings. He will then present his final report to government. I hope that State governments will co-operate with the Federal Government in considering Sir John’s recommendations and that whatever further procedures or policies are necessary will be accelerated as far as possible.

In addition to underwriting and the consideration of Sir John ‘s report, there is provision in the Budget for financial help by way of dairy adjustment, which is in the form of providing help to dairy farmers who are in financial difficulties. Funds have been provided for that purpose to the end of this calendar year, and further funds will be considered following upon the IAC report. Also at the State level a range of means have been introduced to try to contain production, to help the slaughter of dairy cows in some States where it is felt that by a destruction program the number of dairy cattle can be reduced and farmers can be provided with some assistance. There is a tuberculosis and brucellosis eradication campaign through which, at a Federal level, compensation is available for reactor cattle. So all in all, while it is true that dairy farmers are very seriously prejudiced because of the downturn in markets and by drought conditions, government assistance has been provided which has helped to alleviate their present predicament. The Federal Government is quite determined to provide such further assistance as may be necessary to alleviate their long term circumstances.

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Mr E G Whitlam:

– I ask the Treasurer a question concerning the income equalisation deposits announced in the Budget. I ask: How many of the persons availing themselves of the scheme does he expect to be persons whose income is obtained solely from farm sources? Also, what proportion of the revenue forgone through the scheme does he expect to result from deposits by persons whose income is obtained solely from farm sources?


– I call the Minister for Primary Industry.


-As I indicated in my response earlier, the details of the income equalisation deposits scheme will be included in legislation which will be introduced into this Parliament shortly. The answer to the honourable gentleman’s question can be provided only when that legislation is finalised.

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– I ask the Prime Minister: Is unemployment a serious national problem and is this situation causing hardship and distress to thousands of Australian women and men who wish to work? Has the Government been consistent in its efforts to reduce record postwar unemployment inherited from the previous Government? Are the fiscal measures included in this year’s Budget designed to reduce unemployment?


-The Government and many people throughout Australia are concerned with the level of unemployment, especially with certain specific aspects of present day unemployment which has concentratedmany think unreasonably- on younger people in the work force. I hope that we will be able to take some initiatives which will enable us to have a better understanding of the problems in this area which are not by any means peculiar to Australia. They are problems that beset other advanced nations as well. But the claims that the Government is not concerned about unemployment are completely and totally false and the claims that the Budget is not designed to reduce unemployment are also completely and utterly false. It would do the House well to recall the words of a former Treasurer who introduced the one faint semblance of responsibility into the economic policies of the previous Administration. Last year, he said:

Today it is inflation itself which is the central policy problem. More inflation simply leads to more unemployment.

That is a completely accurate statement.

Mr McVeigh:

-Who said that?


-That statement is just as accurate today. A former Treasurer, who is sitting in the House today, said that.


-Who is he?


-We know who he is. At the same time it needs to be understood that the policies of the previous Administration, which were designed to spend more and more of other people’s money, were leading to more and more inflation and more and more unemployment. In the year 1974-75, when expenditures increased by 46 per cent in one year, unemployment trebled from about 78 000 or 79 000 to three times that figure, largely as a result of the grossly irresponsible financial policies of the then Government. I believe that now a much larger number of people throughout Australia understand the nexus between inflation and unemployment and that it is widely recognised. It was certainly recognised by the Treasurer to whom I referred earlier. It is certainly recognised by many wage and salary earners. It is certainly recognised by Organisation for Economic Cooperation and Development governments, regardless of their political persuasion, and there are many socialist governments amongst them. They all accept this particular fact. The Budget is directed towards reducing inflation, and that is going to be the quickest way of restoring employment to a level which Australia has the right to expect.

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– I direct a question to the present Treasurer. It relates to stock evaluation adjustment for tax purposes which was announced in the Budget following the Mathews Committee report. I ask: Did the Committee firmly recommend that if prices fall or assets are run down, reserves so created should flow back into income for tax purposes? In so recommending did the Committee make it clear that it was concerned about tax avoidance practices if permanent reduction of tax liability rather than a deferment was granted? In the circumstances, why was this recommendation not accepted? What safeguards are there or will there be to prevent tax avoidance when prices are falling, when a firm’s scale of operations is declining or when a business changes hands?


– The honourable gentleman refers to the Mathews Committee. It is a matter of public record that the Government, through a number of senior Ministers- I think six or eighthad detailed discussions with a wide sweep of industry and accounting interests. A very large group was represented at the discussions. It would be untrue to say that that group put particular recommendations to the Government. The Government had discussions with all members of the group. The Government also at the time took the unusual step, but the important step for reasons the honourable gentleman would understand, of bringing Professor Mathews back from the United Kingdom. It was as a consequence of those discussions that the overall recommendations in relation to stock valuation were brought down in the Budget. I have no reason to believe that the system which the Government is intent on pursuing, as clearly set down in the Budget, is not the system which the business community itself believes to be the best. That is not without its importance because it is the business community which has been suffering as a consequence of the former Government ‘s inflationary policies.

Mr Hayden:

– I take a point of order. The question was: What measures will apply to prevent tax avoidance? It has not been answered yet.


– That is not a point of order.

Mr Keating:

– I also take a point of order. Mr Speaker. You are insisting on questions being in order and relevant. I think that you should do the same in relation to answers, with due respect.


-The point of order raised amounts to a criticism of me. I shall overlook that. The question is asked; the Minister to whom it is addressed is free to answer the question as he chooses provided the answer is relevant. What the Treasurer is saying is relevant.

Mr Hayden:

– I take a further point of order, Mr Speaker. I am seeking an interpretation of what you have just said to the House. In what way can you possibly say that the Treasurer’s answer was relevant to the question? He is completely avoiding addressing himself in any way at all to the main points made in the question. The essential point in the question was: What steps will be taken to prevent tax avoidance practices which the Committee clearly foresaw? Is the Treasurer arguing that Professor Mathews recanted on the findings of -


-Order! The honourable member has made his point of order. I inform the honourable member for Oxley that he is entitled to ask a question but he is not entitled to predetermine the nature of the answer. That is a matter for the Minister to decide.

Mr Clyde Cameron:

– I rise to a point of order. I am very worried about what you have just said, Mr Speaker. I take the point of order that you are quite out of order, if I may say so with respect, in ruling that if I ask a Minister a question about some specific matter the Minister will be quite in order in answering in relation to some other matter.

Mr Calder:

- Mr Speaker did not say that

Mr Clyde Cameron:

– Yes, he did. The Speaker said that once a question is asked the Minister is free to answer the question in whatever way he pleases. We have to be very careful about this because if we are going to be put in the position of asking a Minister a question and that Minister can go off on a tangent, ignoring the question completely and dealing with some entirely different matter, this House will finish up in chaos.


– I have ruled. I repeat the ruling. Honourable members when called are entitled to ask a question and there are rules relating to questions. If the questions are out of order I snail rule that they are out of order. However I tend to give some members who have difficulty in framing their questions more latitude than I give to other more experienced members. As for the Minister, his answer must be relevant to the question asked. I have so ruled and I insist on that ruling. However, provided the answer is relevant r have no power, nor has the House power, to force the Minister to answer in any particular way. What has happened in this instance is that the honourable member for Oxley has put a question. He has not got an answer which he wants, and he is protesting against it. The Treasurer is entitled to answer the question as he wishes provided the answer is relevant.


– The only 2 questions posed by the honourable gentleman which have not yet been answered are these: The honourable gentleman queried what is called the clawback mechanism as recommended by the original Mathews Committee. If the honourable gentleman rereads the Budget Speech he will find it perfectly clear that the Government has decided to provide a permanent reduction rather than a deferment of tax as, in the jargon used, in the clawback system recommended by the Mathews Committee. In doing so the Government took account of the views of the group that I have mentioned as well as the advice of the Committee to which the honourable gentleman referred. A number of quite technical and complex questions would have arisen in the case of clawback. For example, it would have increased company tax collections in times of trade depression. The Government could have been placed in the position of requiring enterprises to be liquidated in order to claw tax back. As well as that, there were quite formidable technical problems which were discussed with industry. I say to the honourable gentleman in a genuine spirit that he fiddled with the stock valuation system and he knows it very well. He had a referenceindeed a passing reference- to it in the Budget Speech. This Government has taken effective action.

So far as the final question relating to tax avoidance is concerned, we made that position perfectly clear in the Budget Speech. We regard it as very significant in introducing the legislation to ensure that companies can not take unfair or undue advantage of the system which has been brought down. Industry has sought the opportunity for further consultations, and in the spirit of co-operating with the private sector those consultations will be provided. The particular measures for tax avoidance will be made clear in the legislation.

page 534


Minister for Aboriginal Affairs · Stirling · LP

– Pursuant to section 29 of the Aboriginal Land Fund Act 1974 I present the first annual report and financial statements of the Aboriginal Land Fund Commission for the period ending 30 June 1975.

page 534


Minister for Environment, Housing and Community Development · Bass · LP

For the information of honourable members I present a series of reports by the Australian Ionising Radiation Advisory Council, the Australian Radiation Laboratory and the Bureau of Meteorology entitled: Fallout over Australia from Nuclear Tests.

page 534


Minister for Environment, Housing and Community Development · Bass · LP

Pursuant to section 8 of the Urban and Regional Development (Financial Assistance) Act 1974-75 I present an agreement between the Commonwealth Government and the Government of South Australia made under the provisions of that Act.

page 534


Minister for Environment, Housing and Community Development · Bass · LP

Pursuant to section 11 of the States Grants (Nature Conservation) Act 1974 I present a series of agreements between the Commonwealth Government and a number of the States made under the provisions of that Act.

page 534



-Mr Speaker, I seek the indulgence of the Chair to correct a statement.


-Indulgence is granted.


– Yesterday at question time the Minister for Defence (Mr Killen) indicated that he believed he had been misrepresented by a statement which I had released. The statement I released said in part:

The Defence Minister, with a burst of purple prose, asserted we have a maximum 3-hour warning period of any Soviet attack on Australia. The sincerity of his alarm, the depth of his concern can be gauged by the fact he has frozen the manpower strength of the army in spite of his stated urgent aim of lifting it to 36 000. Indeed the manpower strength of the 3 armed services are virtually set at last year’s level and yet the Defence Minister was an unremitting critic of those levels.

I have checked a transcript of the Minister’s Press conference at Parliament House on Wednesday, 30 June, and the relevant section shows that a questioner asked:

Mr Killen, do you think the Soviet military build-up, as you see it, poses a military threat to Australia?

Mr Killen replied:

Well, frankly I do.

Three hours later he released a statement which said:

The Minister for Defence, Mr D. J. Killen, said today that he wished to amplify -

One would say demolish, rather than actually amplify- a reply he gave to a question at his Press conference this afternoon in Canberra.

He stated that the Government did not regard the Soviet Union as posing a direct military threat.

Mr Speaker, it is quite obvious that I should have said that the Minister for Defence had given 3 hours notice that he intended to change his mind and I apologise for the error.

page 534



-Mr Speaker, I claim to have been misrepresented.


-Does the honourable gentleman wish to make a personal explanation?


– I do. I wish to make a personal explanation in respect to a statement made by the Minister for Immigration and Ethnic Affairs (Mr MacKellar) yesterday. I was misrepresented on at least 4 occasions in that statement. It was alleged that I made an approach to a publication called the Middle East News. It was alleged that I placed an advertisement in that publication. I have been accused of misquoting population figures in respect of the number of people of Lebanese extraction in Australia- I was also alleged to have presented figures relating to the refugee intake from the Lebanon. Also the Minister in his statement implied that I was making political capital out of the tragedy of the Lebanese people.

I would like to point out that I have not placed any advertisement concerning the Lebanese situation in any newspaper. I did appeal through both the ethnic radio and the ethnic Press for Lebanese who were experiencing difficulties in getting visas for relatives affected by the hostilities in Lebanon to contact me, or my colleague the honourable member for Werriwa (Mr E. G. Whitlam) if they lived in New South Wales. The approach to the particular paper referred to was not made directly by myself or by my staff but by a representative of” Victoria’s Lebanese community. There was never any question of the announcement appearing as an advertisement. It was run as a community service by the paper involved.

The Lebanese community has eagerly responded to the offer and I am in the process of documenting their difficulties. Unfortunately, due to a misunderstanding, I was quoted as saying that there are 150 000 to 200 000 Lebanese living in Australia. Further, I was apparently quoted as saying that Labor would bring at least 10 000 Lebanese people to Australia. I made neither of these statements as the editor of the Middle East News will verify. They were made in honest error by the Lebanese representative who contacted the newspaper. I am aware, as the Minister is, that there are not 150 000 Lebanese people in Australia, although I am sure that the Minister’s figure of 50 000 to 55 000 is an underestimation of the real figure. T,he Minister’s figure also fails to take into account the people of Lebanese descent, born in Australia, with ties in the Lebanon.


-Order! The honourable gentleman is now arguing. He is entitled to say where he was misrepresented.


-With all due respect, Mr Speaker, this is a gross misrepresentation of my position and I surely ought to be allowed to elaborate.


-No, the honourable gentleman will not be allowed to elaborate.


– Can I refer to the last point that was made by the Minister?


– His deception has caused me quite a deal of embarrassment.


-Order! The honourable gentleman will state where he was misrepresented and what the fact is as he sees it.


– It is on his conscience as to the way he has deceived the Lebanese people.


-Order! The honourable gentleman will proceed.

Mr Abel:

– I rise on a point of order.


-The honourable member for Melbourne will resume his seat. I call the honourable member for Evans.


– Well, that is prejudice if you like.


-Order! The honourable gentleman will withdraw that remark. I ask the honourable gentleman to withdraw it.


– I will withdraw it and leave it to the good conscience -


-Order! The honourable gentleman will withdraw unqualifiedly.


-I withdraw it.


-The honourable member for Evans has a point of order?

Mr Abel:

- Mr Speaker, the honourable member for Melbourne claims that he has been misrepresented by the Minister for Immigration and Ethnic Affairs. I submit that the claim that the honourable member makes -


-Order! The honourable gentleman will make his point of order or I will require him to resume his seat.

Mr Abel:

– The misrepresentation would appear to have occurred with the -


-Order! The honourable gentleman will resume his seat. I call the honourable member for Melbourne.


- Mr Speaker, I would like to say that I resent and reject the Minister’s suggestion that I am trying to make political capital out of this situation. All I seek is a compassionate and swift action to alleviate the plight of Lebanese people wishing to join their relatives here.

Mr Shipton:

- Mr Speaker -


-The honourable member for Higgins has a point of order?

Mr Shipton:

- Mr Speaker, I rise on a point of order that the honourable member for Melbourne is disobeying your ruling and is still debating the issue. He is not speaking to the point he raised.


-The point of order is valid. I ask the honourable member for Melbourne just to make his personal explanation.


– The point I am making is that I have not tried to make political capital out of this matter. I resent the Minister’s suggestion that I am trying to make political capital out of it. Any action I have taken has been designed to alleviate the plight of Lebanese people wishing to join their relatives in Australia.

Minister for Immigration and Ethnic Affairs · Warringah · LP

- Mr Speaker, I claim to have been misrepresented.


– Does the Minister wish to make a personal explanation?


– Yes, in response to the statement made by the honourable member for Melbourne (Mr Innes). Yesterday in an answer I gave during question time I said: … he makes some assertions about the number of Lebanese in Australia.

The honourable member for Melbourne interjected:

They are all true, too.

I then said:

The honourable member says that they are all true. In his advertisement-

I take his point that it was not an advertisement- he says that there are between 150 000 and 200 000 Lebanese in Australia.

Finally I quote again from my answer. I said:

The consultations are continuing, and we hope to be able to announce a special project within the next Tew days. The Government at all times has sought not to make political capital out of what is an extremely tragic situation.

If the honourable member reckons that refers to him, obviously it is not contained in this statement.


-Order! The Minister will not argue the matter.

Mr INNES ( Melbourne )-Mr Speaker, I claim to have been misrepresented by the Minister’s statement.


-Order! Does the honourable member wish to make a personal explanation?


– I do.


-We have just had recent experience of the way in which these matters can develop into debate. The honourable gentleman will have to be precise as to the misrepresentation, his denial or his explanation.


-I will be very precise. The Minister -

Mr Sinclair:

– I rise on a point of order.


-Order! The honourable member for Melbourne will resume his seat.

Mr Sinclair:

– In the past a practice has developed which leads to some debate on matters of personal explanation. I would suggest that this instance seems to be the product of the present repartee across the chamber. I know that it puts you, Mr Speaker, in an extraordinarily difficult position. From the Government’s point of view we do not see personal explanations as being an alternative to debate on a matter of substance. We think that members of this place should have the right to present an explanation where some matter has been canvassed by them. I would just put, Mr Speaker, that in the present instance the honourable gentleman seems to be very nearly transgressing the extent to which you have already given him licence. I know that you have now called him again, but I submit that there must be a point beyond which personal explanations cannot and should not extend.


– I look to the Leader of the House in support of the Chair in these matters. It is always difficult when members feel that their political honour has been attacked. I like to give members the opportunity to explain the circumstances which they find they wish not to remain on their escutcheon. But such a personal explanation must be precise. I call the honourable member for Melbourne.


– I will be very precise, Mr Speaker. The Minister for Immigration and Ethnic Affairs (Mr MacKellar) in the statement he made a few moments ago insisted that I had placed an advertisement in the Middle East News. The fact is that I placed no advertisement.


-The honourable member has made his point apparent.

Minister for Defence · Moreton · LP

– I claim to have been misrepresented, and truth claims to have been misrepresented.


-The Minister wishes to make a personal explanation?


-Yes. I wish to quote the text of the answer I gave to a question asked of me and I will then leave the matter to the judgment of the House. The question was asked:

Mr Killen, do you think the Soviet military build-up, as you see it, poses a military threat to Australia?

I answered:

Well, frankly I do.

There the honourable member for Oxley (Mr Hayden) paused and did not quote the rest of the sentence. The rest of the reply was:

I don’t think that it could be regarded as a boisterous display of benevolence.

Mr Klugman:

– Was that in the morning or in the afternoon?


– Ah! I leave it to the honourable gentleman. If that is the measure of his intellectual integrity he deserves to leave this place. He will keep.

Mr Hayden:

– I take a point of order. The quote I made from the transcript which mysteriously seems to have disappeared from all sources of the Parliamentary Library -


-Order! The honourable member will cease speaking. Has the Minister finished his personal explanation?


– Yes. I would not waste any more time on him.

Mr Uren:

– I thought you were a man without sensitivity.


-Order! I remind the Deputy Leader of the Opposition and the honourable member for Corio that this matter has been difficult as between 2 honourable members and there is no need for it to be fanned by other honourable gentlemen.

page 537


Bill returned from the Senate without amendment.

page 537


Discussion of Matter of Public Importance


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

The deliberate destruction of the Australian shipbuilding industry.

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

Port Adelaide

-The first significant feature about this debate, which is on a topic that is no less than a national scandal, is that it is not supported by one member of the Liberal Party or one member of the National Country Party in this House. They are all prepared to support the decision to close Australia’s shipyards. Their thinking is not in line with that of the Premiers of New South Wales or South Australia, or the thinking of their counterparts in those States, Sir Eric Willis and Dr Tonkin. Both those people, leaders of their respective parties in New South Wales and South Australia, support the propositions which we put forward today and which have been put forward by the Premiers of New South Wales and South Australia. This is a national scandal not only because the Government will close our shipyards but also because of the way in which it has been done. The Government is asking the Industries Assistance Commission to camouflage its actions. The LAC ought to be warned about the way in which it is being used by this Government to reinforce the decision which has been taken to close Australia’s shipyards. During this debate, speakers from this side of the House will deal with all the matters relating to Newcastle and Whyalla which affect the people of this country and the nation.

The Government has only one issue upon which to hang its hat. It is continually crying out on television and radio and in this House that it is carrying out the policies of the former Labor Government. On no other issue which has been discussed since 13 December last year has this Government said that it is following the policies of the former Labor Government. Quite the opposite. It is not following those policies. It is setting out to destroy them. It seems intent on persuading people in the Australian community to support its policies because both political parties are of the one opinion. That is not true. There has never been a decision by any section of the Labor movement, political or industrial, to close Australian shipyards. There was a decision to rationalise the industry, and that has been done. But there was never a decision of this nature by any section of the Labor movement. Members of the Liberal and National Country Parties ought to remember their boast that they have controlled government in this chamber for two-thirds of the time since federation. We now reach a situation in 1976, after a Liberal-Country Party Administration for two-thirds of the time since federation, in which a major industry, one of national importance, is to close.

Shipbuilding should not be looked upon as just another section, another unit of manufacturing industry. Shipbuilding ought to have different criteria applied to it. Before this decision was taken on 12 August there was unity in the Parliament about the existence of the shipyards. Both major political parties agreed that we had to have shipbuilding in the country. I will quote the Government’s own policy because its members are too lazy to read it. The printed version of the policy states:

We recognise industry, in particular our shipbuilding . . . , as a fourth arm of defence … Of equal importance is our shipbuilding industry which has been allowed to fall into disuse by the Labor Government . . . Our high priority for these areas will lead us to ensure the continuing viability of our shipbuilding and ship repair industries.

What a joke! The decision on 12 August meant nothing less than to close the yards. Now it is claimed that it is too expensive to build ships in our country. Again the Government refuses to recognise what other countries do about their shipbuilding yards. It may interest some members on the opposite side to know that almost 30 maritime countries subsidise their shipbuilding in different ways. Many of them have yards which were built long after our yards were built. They have far greater efficiency of technology available to them, yet they still have to be subsidised by their governments. In 1973, Japan spent $500m, Spain spent $60m, Sweden spent $85m, Germany spent $100m, Norway spent $160m, the United Kingdom spent $50m and France spent between $400m and $500m to maintain their shipbuilding industries. Let us consider what people overseas are saying about the shipbuilding industry:

A recent Norwegian estimate quotes a world shipyard over capacity of 24 per cent. Japan has been particularly hard hit by the collapse of the world tanker market. To keep its large shipyards employed it has been offering extremely low prices for vessels of all sizes. This has posed a serious threat to European builders. The Europeans are seeking massive government support to see them through the crisis. Recent examples of responses are those of the Finnish, Netherlands, Norwegian and Swedish governments which have resorted to a series of emergency measures including the purchase of S 1 per cent ownership of some shipyards.

The fear is that because of very low Japanese and Korean prices, European shipbuilders will be forced out of business, leaving a virtual Japanese and Korean monopoly.

That is what this Government is doing. It is acquiescing in 2 countries having a complete monopoly in this vitally important industry. I will say something about the question of defence a little later. I seek leave to nave incorporated in Hansard an article from the London Times on the question of price cutting on shipbuilding which is going on around the world, a table showing the method of government assistance to yards in other countries and an article describing such assistance.


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

The Times Wednesday December 17 1975

page 538



by Peter Hill

Before a team of leading Japanese shipbuilding industrialists boarded their aircraft from Tokyo to San Francisco this month for crucial talks with their European counterparts, a formal note was handed to the Japanese Government by the EEC Commission’s representative in the Japanese capital.

The timing of the delivery of the note had been deliberate, given the importance of the talks, and it marked a major phase in the development of relations between the Commission and Europe’s shipbuilding industry. For years European industry has been pressing for a coherent Community policy and Commission support- without much success.

Throughout this year demands for firm action from Brussels in the face of the most serious decline in demand for tonnage since the 1930s, exacerbated by ruinous price-cutting by the Japanese to secure the few orders that are available, have been gaining in volume. Through a complex of organizations representing various countries and groups of countries, Europe ‘s shipbuilders have sought to explain carefully, objectively and coolly the extent of the crisis which could threaten thousands of jobs in the years ahead if it remains unchecked.

After intensive talks between leaders of the Association of West European Shipbuilders in the autumn, the Commission called for detailed evidence of Japanese shipbuilders’ price dumping practices. Members of the AWES, which includes all the EEC shipbuilding countries with Sweden, Norway, Spain and Finland, were able to provide that information. For months they had been making allegations that Japanese yards, desperate to fill their massive surplus capacity, had been cutting prices to unrealistically low levels, as much as 40 per cent below prices quoted by European yards.

The industry itself, through the AWES and the Council of European Builders of Large Ships, had already had two sessions with the Japanese before the December conference in San Francisco, but little had emerged from the earlier sessions. That the Europeans were able to go into the meetings supported by the EEC’s strongly-worded policy statement to the Japanese, represented therefore a considerable hardening of the European posture and attitude. The main objectives of these discussions has been to secure from the Japanese a commitment to eliminate the practice of distorting prices and at the same time to agree on measures which would lead to a reduction in output.

Throughout the world there is a massive over-supply of shipbuilding capacity and it has been forecast that capacity could safely be cut back by two thirds without any problems in meeting demand.

Developing countries are pressing ahead with new yards when it is clear that there is already a massive surplus. The crisis has been compounded by the repercussions of the 1 973 Arab-Israel war which has led the oil companies and the shipping industry to cancel close on 50 million tons of tanker orders that were on shipbuilders’ books little more than a year ago as the world economy began its descent into recession.

There are those who have been worse hit than others. Norwegian yards and the Japanese who had concentrated on the series production of large oil tankers have been badly hit while those shipbuilding industries in Britain and Germany, which have maintained a mixed bag of ship types in their order books, have not been so adversely affected. But while most European yards have sufficient work to carry them through the next 18 months to two years, new orders are needed now and in the next few months if there is to be sufficient work available in the years up to 1980 and beyond for the yards that are at present building ships.

At the end of September this year, the Japanese industry, which builds more than half the world’s new ships, had an order book totalling 37 700 000 tons gross.

The combined order book of the eight EEC countries building ships (the exception being Luxembourg) amounted to 22 200 000 tons gross but with the inclusion of orders held by European countries outside the Community (Finland, Norway, Sweden and Spain) the European order book stood at a level of slightly more than the 37 million tons gross.

There is therefore little to choose in the size of the respective order books between the two shipbuilding blocks, but the Japanese with their higher rates of output clearly pose a threat because of the need for them to secure new work to replace completed orders. But the Japanese yards, which are often part of much larger industrial groups with the ability to work closely with Japanese Government departments, have shown they do not intend to ease their grip on the world market. Some have argued- notably the British- that those who have expanded most should contract accordingly.

It is against this background that the eleventh-hour intervention by the Commission has given heart to the European shipbuilding industry; although no one should be under any illusions of the scale of the problems which lie ahead. There will be painful decisions to be taken and there will have to be a scaling down of shipbuilding capacity- and with it jobs- if the industry is to emerge stronger and more able to withstand the next drop in the market and in a strong position for the move upwards.

As Mr Per Anker-Nillsen, the Norwegian chairman of the AWES observed before leaving for the San Francisco talks: ‘Yards are approaching the necessary limits for taking contracts; they are approaching the time when contracts have to be signed for yards to stay in business at all. ‘

Much depends on the Commission and on the attitude of member governments. In a directive issued in June, the Council of Ministers declared that a ‘healthy and competitive shipbuilding industry is necessary for the Community; that it contributes to its economic and social development as it represents a substantial market for a number of sectors including those of advanced technology and also contributes to maintenance of employment in a certain number of regions of the Community’.

No European shipbuilding industry would disagree with such a laudable objective but the crux of the matter is really what the EEC considers to be ‘healthy and competitive* in terms of size, production and employment. The European shipping fleet, embracing only the EEC member states, accounts for about 23 per cent of the world merchant fleet while last year EEC yards delivered about a quarter of world shipbuilding output. The industry has the muscle therefore to argue forcefully with the Japanese muscle which can now be flexed at the call of the Commission.

Clearly major difficulties between member states have to be resolved. The means by which a competitive industry can be created could involve the phased rundown of shipbuilding capacity in some regions of Europe and to any government this would be unpalatable politically. A reversion to protectionist policies seems unlikely given the Community’s traditionally liberal approach to world trade.

But that there must be a rapprochement between the industries of Europe and then with the Japanese is patently clear. Without moves towards the development of a coherent and comprehensive policy for shipbuilding in Europe the outlook is bleak. The shipping industries of Europe could become almost totally dependent on Japanese shipyards, which would then not be offering to cut European prices by up to 40 per cent.

Summary of Aid given in Seven Countries

  1. JAPAN

The following have been the principal features of Japanese maritime policy: 5-year goals for the delivery of new ocean-going ships to Japanese operators interest subsidies to finance each annual program for building ships for the domestic fleet an initial depreciation allowance of 25 per cent on new ships and other tax rules whose effect is to minimise payment of corporate tax by Japanese operators who continue to improve their fleet deferred capital gains tax on sales of ships tax credits against earnings in the foreign trades by Japanese operators cheap credit to shipbuilders to finance suppliers’ credit to foreign ship buyers cheap credit to finance shipyard expansion immediate tax write-off of devaluation losses on deferred payments of suppliers ‘ credits to foreign buyers.

The cost to the Japanese government budget of such assistance to the maritime industry for the Japanese fiscal year ending in March 1973 is estimated at $500m on current account and $278m for increased borrowing of government funds by the industry.

Government support saved the shipbuilding industry about $250m in the same fiscal year, about 6.6 per cent of the value of the ships they delivered. Undervaluation of the yen saved foreign buyers at least another 20 per cent for ships bought under dollar denominated contracts.

Government support saved Japanese shipping lines about $250m in the same fiscal year, equal to about 9 per cent of their revenues. Those operators acquiring ships under the government credit program probably had savings equal to 15 per cent of their revenue.

The Japanese maritime policy techniques that most merit U.S. consideration are: interest subsidies to ship owners special depreciation allowance for ship operators supplier credits on foreign ship sales financed by the Export-Import Bank government credit for acquiring U.S. flagships employed in the foreign trades.

  1. SPAIN

The following have been the principal features of Spanish maritime policy: no foreign-built ship operated under Spanish flag all crude oil and other state-trade commodities imported into Spain for domestic consumption must be imported on Spanish vessels if capacity is available the large government-owned industrial sector prefers to use Spanish vessels multi-year programs for expanding the Spanish fleet accelerated depreciation available especially to ship operators cheap credit arranged by the government for domestic operators buying new vessels a ‘concerted action’ program to consolidate and modernise the shipbuilding industry with the help of cheap credit and free depreciation on new investments government ownership of major shipyards, with minimal return on equity government conversion of foreign exchange into pesetas at the pre-revaluation rate on contracts signed prior to the 1973 revaluation government capitalisation and refinancing of shipyards in financial difficulty subsidised credit to shipyards to finance suppliers’ credits to foreign ship buyers.

The cost to the Spanish government budget of such assistance to the maritime industry in 1973 may be estimated at $200m.

Government assistance to the shipyards in 1 973 was worth about$1 50m, equal to about 20 per cent of the cost of the ships they delivered.

The value of government assistance to Spanish shipping lines in 1973 was about $60m, equal to more than a third of their freight revenues.

The Spanish maritime policy technique that may be of particular interest under U.S. conditions is the payment of shipbuilding subsidies as a fixed percentage of the selling price of any vessel built in a national yard.


The following have been the principal features of Swedish maritime policy: accelerated depreciation of ships and in recent years depreciation of over 100 per cent of the investment costs inventory write-down potential for shipyards which can help shelter profits in boom years credit guarantees to shipyards on second mortgage loans sheltering of capital gains from ship sales if reinvested in new ships government participation in industry consolidation and specialisation subsidised loans to shipowners interest free loans and other special rescue aids to shipbuilders in financial difficulties subsidised interest rates on exports use of tax-free reserves to shelter windfall profits.

The cost to the Swedish government budget of its aid to the maritime industry in 1 972 is estimated to be about $85m. This is exclusive of the cost of exempting ships delivered to domestic owners from VAT, which would add about $22m. About $30m was for navigation aids and related harbour costs, which should be recouped from charges to ships using its harbors.

Government support saved the shipbuilding industry about $22m for trie same fiscal year. This represented a benefit of about 4 per cent of the value of ships delivered. With improved operating results in 1973 the value of the tax benefits should increase.

Government support saved the shipping lines about $37m which was equal to about 8 per cent of revenues.

The Swedish maritime policies that most merit U.S. consideration are: accelerated depreciation of ships pre-delivery depreciation and depreciation over 100 per cent of cost inventory (work-in-progress) write-down potential for shipyards subsidised interest rates.


The following have been the principal features of German maritime policy: direct construction subsidies interest subsidies on ship acquisition loans by domestic operators a 30 per cent initial depreciation allowance, including down-payments and progress payments, on a new ship write-off against personal income of tax losses from individual investments in a new ship deferment of capital gains tax on the reinvested proceeds from a ship sale 50 per cent reduction in tax payable on shipping income earned in the foreign trades multi-year shipbuilding programs with construction and credit subsidy adjusted to facilitate reaching program goals grants, cheap credit and special accelerated depreciation for investment in shipyard facilities interest subsidies and low interest loans from public funds to shipbuilders to finance suppliers’ credit to foreign ship buyers exemption from the value-added tax of all ships whether built for domestic or foreign buyers.

The cost to the government “of the Federal Republic and the coastal state governments of Germany of subsidies and tax benefits to their maritime industries may be estimated currently at about $100m a year, a sum that should reach $250m by the later years of the current decade. The exemption from the value-added tax was worth another $50m in 1972, a sum that will probably reach $125m a year before theendofthe1970’s.

For 1972, the value of government aid to the shipbuilding industry may be estimated at $50m, expected to reach $200m a year between 1976 and 1979. The combined effects of anunder valued exchange rate, unrealistic pricing and governmentsubsidy probably resulted in ships being delivered from German yards in 1972 at 20 per cent or more below their full cost of production. For the rest of the decade, an average subsidy of 1 1 per cent is expected to permit profitable operation of the shipyard’s. Exemption from the value-addedtax is equal to another 1 1 per cent of new ship prices.

The value of direct and indirect subsidies to the German ocean-going fleet in 1971 was atleast$100m, about 5.5 per cent ofgross revenues.

The German maritime policy features that most merit U.S. consideration are: fixed percentage construction subsidy for all types of ocean-going vessels special depreciation and tax free proceeds of ship sales tax incentives to sell a ship within 10 years of its purchase.


The following have been the principal features of Norwegian maritime policy: special tax free reserves to which a ship operator or shipbuilder may allocate profits from boom years special initial or accelerated depreciation provisions for ship or shipbuilding productive equipment 6 per cent customs rebate on ship sales subsidised interest on second mortgage loans made to the shipyards so they can finance ship sales exemption of ship sales from capital gains tax if the gain is reinvested in ships or can be offset by funds from certain reserve accounts lower personal income tax for seagoing personnel provision for ship owners to charge off devaluation losses.

The cost to the Norwegian Government of its support to its maritime industry in1972 is estimated to be over $200m, exclusive of the cost of exemption from the investment tax of ships built for domestic owners, which would add about $18m.

Government support saved the shipbuilding industry about $30m in the same fiscal year which was approximately 7½ per cent of the value of their deliveries.

Government support to the Norwegian ship owners was worth at least$1 60m, equal to about 7 per cent of freight revenues.

The Norwegian maritime policy techniques that most merit U.S. consideration are: special initial or accelerated depreciation provision for ships or shipbuilding facilities special tax free reserves exemption of ship sales from capital gains if reinvested in new ships- (accompanied by greater flexibility in timing of ship sales).


The following have been the principal features of the United Kingdom ‘s maritime policy: cash investment grants to U.K. ship owners towardsthe purchaseofnewships(thisprovisionwasterminatedin 1971) freedepreciationofnewships,whichpermitsaship ownertouseanyrateinanyyear until the ship is fully depreciated government support to shipbuilders for mergers, consolidation, and specialisation ship construction grants (on a declining scale) subsidised credit on ships built for foreign or domestic owners facility investment grants for shipbuilders located in development areas to foster modernisation subsidised credit to shipbuilders for new facilities rebate of customs taxes accelerated depreciation of shipyard facilities in development areas.

The cost to the U.K. government of support to its maritime industry was over $550m in 1972, exclusive of the cost of exempting from VAT of the ships built for domestic owners, which would add about $37m.

The value of the government support to the shipbuilding industry may be estimated at slightly over$50m. In addition equity investments and loans totalled another $22m. Exclusive of the equity investment and the loans, the support was about 12 per cent of the value of the ships delivered.

The value of the government support to the shipping companies in 1 972 is estimated to have been about $520m which was about 1 7 per cent of revenues.

The U.K. maritime policy techniques that most merit U.S. consideration are as follows: accelerated, flexible depreciation of ships subsidised credit for ships built for foreign or domestic owners subsidised credit for new shipbuilding facilities accelerated depreciation of new shipbuilding facilities.


The following have been the principal features of French maritime policy: multi-year programs for increasing French merchant fleet tonnage, with government support programs adapted to facilitating achievement of program goals government support for mergers, regrouping and specialisation of shipbuilders and shipping lines requirement that two-thirds of crude oil imports be carried on French flagships or on approved charters equipment grants to operators for the purchase of new ships interest subsidies on new ship acquisition loans government subsidy of the cost of injuries and illness aboard ship a highly accelerated depreciation system for all French industry, together with other tax shelters that serve to minimise taxes on profits, especially for industries with large new investments exemption from income tax liability on operations carried on outside of France, including shipping services construction subsidies on new ships built in French yards investment subsidies and cheap credit to encourage shipyard modernisation and consolidation inflation insurance program for shipbuilders subsidised credit to shipbuilders to finance their suppliers ‘ credits to foreign ship buyers exemption from the value-added tax for all ships, whether built for domestic or foreign owners.

The cost to the French government of support to its maritime industry may be estimated at $400-$500m per year.

The value of government support to the shipbuilding industry may be estimated at $200-$250m per year, equal to about one-third the annual value of French shipbuilding. . The value of government support to French shipping operators may be estimated at $150-250m a year, a sum approximating 1 0- 1 5 per cent of their operating revenues.

The French maritime policy techniques that most merit U.S. consideration are: interest rate subsidies to ship owners accelerated depreciation and low tax rate on capital gains from ship sales preference rules with respect to crude oil restructuring, modernisation and specialisation of the shipbuilding industry.


– I now turn to the question of the work force. I mentioned the rationalisation of the yards. In the last few years 3 shipyards have closed- Adelaide Ship Construction, Evans Deakin and Co. Pty Ltd and Walkers Ltd. Members opposite say that closure of the yards is the complete responsibility of the work force. This accusation ignores the technology, the investment and the uncertainty with which business has lived with governments over a long period as to what orders each of the yards will receive. It is not just a question of the labour force or the problem of industrial relations in the yards. This description of the skills employed in the shipbuilding industry in Australia was given by the working party set up by the Department of Transport in 1974:

Although the labour content in the industry is relatively small when viewed against the total Australian work force, the industry’s significance as an employer of labour is considerable in that:

It is of special importance in some regions and areas where alternate job opportunities are not readily available.

It introduces to industry generally a continuing supply of well-trained and highly skilled tradesmen and other workers.

It has over a long period of time become a repository of highly developed skills and expertise of a nature that is unique to the industry. Any diminution of this expertise would be extremely difficult to recover.

It provides ideal training opportunities for all levels of skilled workers in an activity which is characterised by its sophistication in terms of complex equipment and technological development.

That is a description of the work force which this Government is throwing out onto the street. It is a description of the people. We heard the Prime Minister (Mr Malcolm Fraser) say he was concerned about the unemployed. For every person who is employed directly in the manufacture of ships in our shipyards there are 3 people employed outside the yards. If the Government puts off 6000 people in the shipyards it is putting off 18 000 additional people employed in industries outside the yards.

Let us look at the question of defence. A minute ago in this chamber we heard from a very angry, remonstrative Minister for Defence (Mr Killen). He was very upset about some of the things that had been said. Let us look at what the Tariff Board said about the importance of shipbuilding to defence. How the Minister for Defence and the Minister for Overseas Trade (Mr Anthony) can sit idly by in Cabinet and allow a decision to be taken to destroy this nationally important industry bewilders me. The Tariff Board report on Australian shipbuilding in 1971 states: … in a future national emergency which threatened to be of limited duration, the main activity of the Australian shipbuilding industry would be the repair and refitting of Australian and allied naval and merchant ships and the production of small ships such as minesweepers, patrol vessels and landing barges. Although some production of major vessels might be commenced in such an emergency, the nature and scale of any construction undertaken would depend significantly on an assessment of the conflict becoming protracted.

The evidence from the Department of Defence indicated that the Government’s essential defence requirements are for efficient and strategically placed dry docking and other repair facilities, and for yards capable of the fast production of a number of relatively small ships.

The Department stated that while capacity to build major ships could not be effectively used in an emergency of limited duration, this capacity would become important in an extended conflict. Also in a shorter conflict, the techniques of such an industry would be readily adaptable to major ship repair work.

The maintenance of a viable commercial shipbuilding industry was thus an important factor in Australian defence preparedness.

This is one of the issues the Government completely ignores. Let us look at what the Minister for Defence says. I want to revive the argument that just took place in this chamber. The Minister was asked by Brian Toohey of the Australian Financial Review:

Mr Killen, do you think the Soviet military build-up, as you see it, poses a military threat to Australia?

The Minister replied:

Well, frankly I do.

He is our Minister for Defence. Who is running the defence of this country? It is not the shadow Minister or those who sit on the Opposition side of the House. If honourable members opposite believe in all the hullabaloo about the Russians in the Indian Ocean, their view does not accord with the views the Government is putting forward about our national shipbuilding industry. Look at the amount of money we may have used to subsidise our shipbuilding industry. The Tariff Board report of 1974-75 shows that $31m was poured into our shipbuilding. Under this year’s Budget, $2, 100m is to be spent on defence. If it is Liberal Party policy that the shipyards are a fourth arm of our defence, could that $31m not be easily put aside as part of our defence expenditure? Should the money not be invested in the shipyards to bring them up to date so they can compete with the yards overseas? With the investment we are to make in our defence, that obviously could be done.

An extraordinary feature is that the Minister for Defence 2 days before the Government decided to close our national shipyards, issued a Press release stating that the Government was calling tenders for a 6000 ton naval ship. He wants it to be built in our shipyards. In 18 months time when it is ready to be built, according to the Government’s present plans our shipyards will be closed. The ship will not be built in Australia, and the Government knows it. Today is not Black Friday; it is Black Wednesday. The Minister signed a document so that the subsidised Japanese workers would get work over and above the work that ought to be available to the workers in the shipyards at Whyalla and Newcastle. The workers in the Japanese shipyards receive just as much subsidy from their government and just as much collaboration between private enterprise and government as we would expect for our shipyards. Orders for 4 ships placed overseas could have kept our yards alive while further investigation went on into improving the efficiency of our yards. This consideration has been completely ignored. The ship that was the subject of the Minister’s Press release 2 days before the announcement to close down our shipyards will never be built in an Australian yard. I have news for the Minister for Defence, the Minister for Transport (Mr Nixon) and the Prime Minister (Mr Malcolm Fraser). This is one fight that the people of Australia will win, because the only people who do not agree that we should have commercial, viable, efficient shipyards of our own are the mob who sit opposite. The Liberal Party is the only group -

Mr DEPUTY SPEAKER (Mr Lucock)Order! The honourable member might moderate his language.


– I am referring to the group that poses as a government. The Liberal Party in the States support what we are saying. This is a fight we will win. We will not have 20 000 semiskilled workers thrown into unemployment adding to the 350 000 people who are already unemployed. On the question of industrial relations, we have heard honourable members opposite- the reactionaries when they were in Opposition, the reactionaries when they are in government- say that we could never have amalgamation of unions. They say that big unions would be too strong and that governments would not be able to handle them. They fought against amalgamation of unions. What is one of the success stories of overseas shipyards? In Sweden, Germany and Japan there is one union for the shipbuilding industry. When the Australian Labor Party put forward the proposal in this Parliament that there ought to be industry unions in such industries as the shipbuilding industry, the Liberal Party fought against amalgamation of unions. The problem is largely the fault of the Government.

I turn to the question of trade. Australia has 12 000 miles of coastline. In 1980 we will have an import-export trade of $12.1 billion. We are one of the largest trading nations in the world. Yet the Government has decided that we should not have the capacity or the skills to be able to build ships in Australia. This is a right we intend to win.


-Order! The honourable member’s time has expired.

Minister for Transport · Gippsland · LP

– The honourable member for Port Adelaide (Mr Young) commenced this debate by saying that not one honourable member on the Government side supported his matter of public importance- the deliberate destruction of the Australian shipbuilding industry. Let me remind the honourable member that the only reason nobody on the Government side stood to support his matter of public importance was that the policy being followed in the shipbuilding industry today is the policy that was set down by the Labor Government. It is the policy that the honourable member himself voted for in 1973 or whenever it was raised in the Caucus room. It sits strangely on the honourable member to berate the Government now over what has happened in the shipbuilding industry when in 3 years the Labor Government did nothing to assist the industry. It established an interdepartmental committee, but promptly pigeonholed its report. The honourable member does not even ring true on the issue.

The people of Australia understand quite clearly what has happened to the shipbuilding industry. On 18 December 1973 the Labor Government decided to adopt a policy of a 45 per cent subsidy for the shipbuilding industry, to be reduced to 25 per cent by 1980. At this time it is a 35 per cent subsidy. As far as I know, it is still the highest subsidy paid to a shipbuilding industry anywhere in the world. An important part of that policy of the Australian Labor Party was a provision that if Australian shipowners were unable to buy ships in Australia at a price less, after subsidy was taken off, than the overseas price, they could purchase their ships overseas. I will prove that that was a deliberate act by the Labor Government to dismember the shipbuilding industry. The result of the Labor Government’s policy was that, as the honourable member for Port Adelaide pointed out, 3 shipyards closed. In 1973 it was Adelaide Ship Construction; in 1974 it was Walkers Ltd; and in 1975 it was Evans Deakin & Co. Pty Ltd. These all closed during the time of the Labor Government. The Labor Government did nothing about it.

It placed orders for 6 ships overseas. Four were for large bulk ore carriers which it was said were too big for Australian yards. If such large ships were considered necessary for economic reasons, why was the purchase not delayed for a few months, and why was assistance not given to the shipbuilding industry so that it could make its yards big enough to handle these jobs? The Opposition’s argument does not stand up. Orders for the other 2 ships could have been rightly placed with Australian yards, but they were not. Even the Rah was brought into Australia to help the Tasmanians in their coastal trade. The Tasmanian Minister for Transport claims that the previous Federal Minister for Transport, the honourable member for Newcastle (Mr Charles

Jones), gave him the right to keep that ship on the coast without an Australian replacement. That is his public claim. In defence of the honourable member for Newcastle, there is nothing on the record that proves that; but the Tasmanian Minister has made his claim and the honourable member for Newcastle has not denied it publicly.

The real test of what the Labor Government did for the shipbuilding industry is to examine what occurred during its 3 years in office. Despite all the blustering of the honourable member for Port Adelaide, the historical fact remains that the Government of which he was a supporter set a course for the shipbuilding industry that has brought about today’s position, when shipowners can buy their ships more cheaply overseas because of the high cost of Australian yards, even after the subsidy is taken into account.

We have extended the Australian Labor Party’s policy of a 35 per cent subsidy on ships, and at the same time we have asked the Industries Assistance Commission to bring in an updated report so that we can see whether circumstances have changed and whether there ought to be any change to that situation. We have also asked the IAC to tell us the effect on local communities. Does anybody in this chamber really believe that the Government ought to change that policy direction without a reference to the IAC; that we ought to extend the subsidy further than 35 per cent when 35 per cent now represents $13,000 per man in the industry? As the honourable member for Wakefield (Mr Kelly) once said, it would be cheaper to get them to build sandhills on the beach for about half that amount of $ 1 3,000.

It is economic nonsense to talk as the honourable member for Port Adelaide has talked. Industrial trouble has been at the very core of the problems in the shipbuilding industry. I note that Mr Halfpenny has been making statements such as those which the honourable member for Port Adelaide has made. He said:

Let us show that trade union action can keep the dockyards open.

The Halfpennys and the Carmichaels of this world have led Australian industry into the situation in which it is now. The Halfpennys and the Carmichaels have caused higher and higher wage demands; they have supported demarcation disputes; they have supported strikes in the shipbuilding industry day in day out, week in week out and year in year out. They have done nothing about it. It is because of the Halfpennys, the Carmichaels and the Hawkes of this world that the shipbuilding industry is in the sorry state it is in today. What the Halfpennys and the Carmichaels are doing is exploiting the worker, not for any gain for the worker but just so that they can destroy the very job that worker has today. What the Halfpennys and the Carmichaels are doing is abusing the privileges of the democratic system so that they can destroy that system. That is what the Halfpennys and the Carmichaels are about. If Halfpenny and Carmichael were in Russia and tried to pull a strike they would be sent to Siberia. There are no strikes in Russia; strikes are not allowed. But they come here and foment strike after strike, wrecking the jobs of decent, honest Australian citizens in the shipyards of our nation. The shipbuilding industry is a classic case of the trade unions’ capacity to destroy their own industry.

When the honourable member for Port Adelaide raises a matter of public importance of this nature in the House he ought to point it more directly at members of his Party and members of the trade union organisations that he claims to know so well. It is fair to say that the rank and file trade unionists at the State Dockyard are aware that the activities of their union leaders have brought about this situation. The other night I watched a current affairs program on which I took part myself, by accident. Every speaker from the State Dockyard made the same point, that they thought the trade union leaders had led them into this trouble. It is a point accepted by them. It is a point accepted also by the Premier of New South Wales who admits that the dockyards have a shocking industrial record. It is a point accepted by my predecessor, the honourable member for Newcastle (Mr Charles Jones), whose speeches in Hansard and those made outside this House are studded with complaints about the industrial difficulties of the shipbuilding industry. I will read a few of them because the honourable member for Port Adelaide seems to be unaware of what a responsible Minister in the Labor Government had to say on this matter. On 3 April 1973 the honourable member for Newcastle said:

We are all concerned with the unnecessary stoppages in the shipbuilding industry. If the unions want the industry they have got to be pan of it and stop these unnecessary stoppages.

It took the honourable member only 4 months in government to find that out. On 24 August he said:

Government can only do so much to provide this country with a viable shipbuilding industry.

On 14 December he said that in a case where the Australian price tendered was higher than the overseas price, even with the maximum Government subsidy of 45 per cent, he would not support any argument that the ship must be built in Australia.

Mr Howard:

– Who said that?


-The honourable member for Newcastle. He went on again on 4 February 1974 and said:

In the absence of real import competition, the industry has not had the necessary structure to follow the lead of overseas producers in seeking to improve efficiency through rationalisation and more specialised production.

It is clear from that statement that the Labor Government was seeking to import ships from overseas. On 15 May he said:

The industrial record of the Australian shipbuilding industry left much to be desired.

On 3 October he said:

There might not be any shipbuilding unions if past and present industrial disputes continued . . . Larrikinism by the unions had alienated some Labor MPs who had in the past supported Government assistance for the industry. They said if this is the way unions are going to go on what is the use of us putting in 20-odd million dollars in subsidies to maintain the industry.

Mr Shipton:

-Who said that?


– The honourable member for Newcastle. On 12 September 1974 he said:

The Australian Government’s policy made it clear that if overseas ship prices were less on a cash basis than subsidised Australian prices, he would have to consider an owner’s application to import the ship involved.

At the same time he said:

No government could be expected to support an industry with a subsidy of 45 per cent which was equivalent to tariff protection of 82 per cent.

The honourable member for Port Adelaide ought to take another look at the matter he has raised in the Parliament. He has raised it only because he has been stirred to bring it on by the complaints of the Labor Premiers. This is the second week of the parliamentary sitting. This is not new news. It is now the Wednesday before the 24-hour strike takes place. They want to make an appeal and they have raised a matter of this nature to prove their so-called real interest in the shipbuilding industry. On 1 September 1975 the honourable member for Newcastle said:

A decision had to be taken as to which came first- shipping or shipbuilding? A decision in favour of shipbuilding would have have seriously jeopardised a successful and viable shipping operation.

Cop that! That statement came from a responsible Minister in the Labor Government. They are the words of a former Labor Minister, not the words of anybody on this side of the chamber. The Opposition is attacking us for what has occurred when the whole of the policy responsibility rests with the Labor Government.

Finally, on 8 November 1975 the honourable member for Newcastle, when he was Minister, said:

We must recognise that ANL operates in a very competitive climate overseas. It must be able to secure vessels at competitive prices and in time to meet its trade commitments. If this is not assured the Line’s successful operations are prejudiced.

The former Minister was right. He was right to warn the unions that they were destroying the industry, because that is what they are doing. He was right about the Australian ship owners and their need to be competitive. The Australian National Line wants four 15 000 deadweight ton bulk carriers. The Australian price is $20m each before subsidy and with escalation clauses. The Japanese price is $9. 5m. A 55 per cent subsidy is required. It would cost the Australian taxpayer more in subsidy to buy the ship than the price to build d the ship in Japan. As I said before, the subsidy is equal to $13,000 per man. It has reached unrealistic levels.

Mr Morris:

– Why do you not tell us that you are doing a deal on the bulk carriers?


– You are not even speaking on this matter. That is how much interest you have in the subject. The tariff equivalent is 122 per cent. Having regard to the fact that some things come in tariff-free, the real tariff equivalent is up to 300 per cent. That is what we are dealing with. The same problem occurs with the 4000-ton cement carrier. The lowest Australian price is $ 10.7m with escalation clauses. The Japanese price is $5.4m which is a fixed price. Again a 50 per cent subsidy would be required. When he was Minister, the honourable member for Newcastle did one or two very good things to try to overcome this problem, despite the difficulties he had from his Party. He formed the Australian Shipbuilding Industry Study Mission and sent it overseas. It was made up of unionists and employers. This is what they reported:

Productivity in Australian yards does not compare favourably with overseas shipyards . . . Overseas shipyards have a productivity rate three to four times that of Australian shipyards in the medium to large range of vessels.

Professor Fink said something similar. The fact is that an Australian worker can produce 9 tons of finished steel a year and a Japanese worker produces 30 tons of finished steel a year. When they go on strike in Japan in a national wage case they wear black armbands, and the productivity for a day is more than a normal day’s work. That is their form of strike in Japan. Compare that with the situation in Australia.

I want to turn quickly to what the Premier of South Australia said. This relates to what the honourable member for Port Adelaide had to say. They both claim that overseas governments are doing more for their shipbuilding yards than is the Australian Government for our shipbuilding yards. That is not true. The honourable member for Port Adelaide has not really studied the situation. The $500m which he says Japan puts into the shipbuilding industry is used for loans to shipowners and for the construction of new yards. There are no direct subsidies to shipbuilding in Japan; nor are there in Sweden, Korea, or West Germany. The United States of America provides a subsidy of 35 per cent, which is the same as that provided in Australia. Indirect assistance is given but it does not come up to the level of support given to the Australian industry. There can be an Australian shipbuilding industry. Some 19 ships are still required on the coast. It is now a matter of the shipbuilding yards getting their houses in order, to be competitive and to do the job. Only in that way will they succeed.

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


– I rise to support the matter of public importance put before the House by the honourable member for Port Adelaide (Mr Young). I would like to say, first of all, that I feel that by using such expressions as ‘the Halfpennys’, ‘the Carmichaels’ and so forth the Minister for Transport (Mr Nixon) is trying to create a smokescreen to hide the fact that the Government has made a decision, which I think is an irrevocable decision, regarding the orders placed overseas for four 15 000-tonners. The Minister made some complimentary remarks about the former Minister for Transport, the honourable member for Newcastle (Mr Charles Jones). It is a pity that what came out of that overseas mission which was set up by the previous Minister has not been given a chance of being put into operation. I know what is contained in the report that the members of that mission produced, and I have spoken to some of the people who were part of that overseas mission. Unfortunately, the decision that the present Government has taken will not allow the recommendations made by the mission to be put into operation. However, I will leave that matter to the honourable member for Newcastle who, I understand, will speak later in the debate.

I support fully the matter of public importance raised by the honourable member for Port Adelaide. I believe that he has raised this matter because he feels, as all members of the Labor Party would feel, that unless some additional action is taken by the Government we will see the disappearance of a vital industry- the Australian shipbuilding industry. We in the Labor Party have maintained as an essential part of our policy that we must have a shipbuilding capacity in this country in addition to the urgent need for this nation to operate, man and maintain a viable fleet of ships for both our coastal and our overseas trade. It is ironical that the present Government, in a joint policy statement on transport issued prior to the 1975 election, maintained that it supported the maintenance of what it called ‘our relatively small but vital industry’. The honourable member for Port Adelaide has already referred to other parts of that policy. So we certainly have seen a bit of change in policy since prior to the last election.

However, despite approaches to the responsible Ministers in the Government by all sections of the industry- the shipbuilders, the unions and other interested bodies- the Government has decided that it is not prepared to take the necessary steps to ensure that this vital industry will continue to function in Australia. By deciding not to take the necessary action it has placed in jeopardy the jobs of many thousands of men who are presently employed in the industry in the 2 main shipbuilding centres of Whyalla and Newcastle. Because of the number of jobs to be declared redundant and because of the effect that that will have on all of those people indirectly involved, the number of jobs lost will grow to a much higher figure.

The Government is taking this action at a time when it appears that unemployment will reach the highest figure since the depression years. It is apparently ignoring the importance of the industry as a part of our defence setup. Whilst the Minister for Defence (Mr Killen) has stated that no naval ships will be built in those two main yards, they would certainly be called on to play a very significant part in our defence setup should this country be in some danger. Both the Minister for Transport and the Minister for Industry and Commerce (Senator Cotton) have been most blatant in heaping all the blame for the decisions they have made on the unions and on the Labor Party. They ignore what has happened over the last few years. There have been no major disputes involving the major unions in the industry. During an interview last week on the television program This Day Tonight, in which unionists from Newcastle were interviewed, it was stated that there had been only 2 half-day stoppages in 18 months. In the other centre, Whyalla, there has not been a major dispute for a number of years. There have been minor peripheral disputes, but no major disputes. But I am afraid that the Government fails to recognise the efforts of the unionists in the industry and their record over the last few years.

What of the other facet of the industry which Government supporters have continually thrown up? I refer to the issue of demarcation, an issue that has been recognised by responsible trade union leaders in the industry for many years, one that has been the subject of discussion between unions for a very long time. In discussing this matter of public imprtance, perhaps we could look at an article concerning the shipbuilding industry which was written recently by the shipping correspondent for the Newcastle Morning Herald. It states:

The Government’s decision on shipbuilding (and the Newcastle graving dock) becomes increasingly sinister the more one looks into it. The most appalling implication is that the Government is coldbloodedly prepared to sacrifice the jobs of 6300 workers directly employed in Australian shipyards (and affects the livelihood of several thousand others) because of its obsession with having a balanced Budget.

The article further goes on to say:

The real crime of the Federal Government’s decision, whatever the causes, is that it comes at a time when prospects for a stable and efficient shipbuilding industry looked the best they have been in the chequered history of the industry in this country. Following a number of initiatives taken by the previous Labor Government, there was a new and surprisingly durable accord between managements and unions in the industry. The prospect of a single shipbuilding industry award, ending demarcation disputes and tailchasing wage claims, actually appeared likely where two years ago such an idea was laughable.

The article then went on to say:

The industry should have been given the chance to build these four ships.

That refers to the four 15 000-tonne Australian National Line ships. The article continues:

If it failed to deliver them on rime or if costs went up too steeply due to dockyard workers’ wage demands or time lost through disputes then the industry would have deserved a sentence of sudden death.

In view of the improvements that have been made in the past 12 months it certainly did not deserve the death sentence passed on it by a penny-pinching government obsessed only with what it can save in the short term.

The Government has to admit that there has been progress in this field, because a number of unions which formerly were separate are now under the one organisation. Only a few weeks ago the announcement was made that the shipwrights had voted to amalgamate with the main union in the industry- I know this stirs up a few honourable members opposite- the Amalgamated Metal Workers Union. Whilst the historical practices and jealousies of the craft unions die hard, it is a fact that in both the major centres discussions with management have been going on regarding flexibilities between the various trades. Given time most of these matters would have been sorted out in an effort to make the yards more efficient and economical, but the Government is apparently not prepared to give the industry the time to work out these matters. Being in close contact with Whyalla unionists, I am aware of their great concern for the industry and their realisation that some rationalisation of it is necessary. There were 2 members of the Whyalla shipyard on the overseas mission to which I referred earlier, and I have had a chance to discuss these matters with them.

However, all the problems do not hinge on the people working in the industry. For more than 20 years there was no long term plan for the industry which required the updating of the yards so that they could effectively compete with the more modern overseas yards. Whilst the Government has been trying to blame the former Labor Government for all its ills, the real culprit is the Government itself. It had every opportunity during its 23 years of rule to take the necessary steps to ensure that our yards kept up with the more modern yards established overseas so that they would be able to compete successfully. The Government, however, has decided to take the decision it announced last Friday in a period when there is a general world-wide slump in shipbuilding, in a period when we have to compete with quotes for ships that are at prices that can be described only as ‘dumped prices’.

Professor Fink made reference in the paper he prepared recently to this particular problem. An article which appeared in the Australian Financial Review recently stated that some Japanese yards have been agreeing to loss-making contracts to ensure continuity of work. I would like to know whether any of our 15 000-tonners are included in that. The ankle further stated:

Prices being quoted for some ships are $2m less than last autumn and are as much as 30 per cent below West European prices.

With Korean yards in a position to undercut Japan by a considerable margin, how can our yards be expected to compete successfully without sufficient government assistance? Yet it is at this time that the present Government has made its decision not to make more assistance available to the industry. It is endeavouring to place the blame for that on the former Government, but the real blame lies with the Liberal-Country Parry Government that lasted for 23 years. Perhaps we can have a look at some of the views held by the present Minister for Transport when he was in Opposition. Last year, when he tried to place the whole blame on the Labor Party, he said:

There has not been a stable market in Australia for shipbuilders. Instead we have had a stop-go situation which has resulted in confusion as to the long term prospects, and investment decisions have been based on the wrong criteria-

Again the Minister said that they were caused by the Labor Government, even though his Government had been in office for 23 years. He went on to say:

It has also meant that the skilled work force which is essential to a sound shipbuilding industry has not been given the confidence and long term security which is required in order to ensure productivity and the maintenance of skills - again caused by the Labor Government.

The Minister’s Party had been in office for 23 years yet he blamed the Australian Labor Government for the shipbuilding industry’s problems.

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


-The action of the Opposition in raising this matter of public importance for discussion in this House today is completely and utterly irresponsible. Honourable members opposite are adding to the fear and panic being created by the Left wing unions in Australia. How can they criticise our policy on shipbuilding? It is the policy which they announced in December 1973. That policy which was laid down by them in office provided for a maximum rate of subsidy of 45 per cent to be phased down to 25 per cent by 1980. That subsidy is currently 35 per cent. That policy also provided that shipowners would source their requirements overseas if the overseas price was less than the Australian price after subsidy. It is their policy that we are talking about today. By their action they are attacking themselves. It is an incestuous matter to put before the House because they are attacking their own policy.

This Government has not just carried out the policy that was in existence; it has done more. There has been a speedy reference to the Industries Assistance Commission- perhaps the speediest reference ever. Action is already under way. The new Chairman of the Commission is taking action. We have let tenders for a $40m 6000 ton amphibious heavy lift ship. We have announced that $50m will be spent in building patrol boats in Australian yards for the Australian Navy. Nine patrol boats will be built and there will be an option for a further five. Did the honourable member for Port Adelaide (Mr Young) refer to patrol boats? No! He was gracious enough to refer to the order for the amphibious heavy lift ship but he tried to drag a red herring across the trail. We have acted to encourage the shipbuilding industry. We have put the bait there for the industry to catch if it is equal to the task.

Furthermore, the Prime Minister (Mr Malcolm Fraser) said earlier this year that if the unions could come to some sort of productivity agreement the Government would consider placing orders in Australian yards. Have we heard about such a productivity agreement? No! As the Minister for Transport (Mr Nixon) has said, actual protection of 120 per cent is needed, which means an effective rate of protection of approximately 300 per cent today. The industry is riddled with demarcation disputes, not only between unions but between men in the unions.

Mr Wallis:

– That is not true.


-What a load of old rubbish! The honourable member virtually had to be dragged here today to speak and he did so reluctantly. What an effort he made. I have been to Whyalla. I have been to the yard and have talked to the men there. They have told me that at Whyalla 5 men will sit around and will argue as to which one will weld a bit of pipe. What an utter waste. Demarcation is the name of the game. Demarcation leads to over-manning, leads to too many men on the job, and detracts from productivity.

There are increasing labour costs in this industry and also in supplying this industry. Ten years ago, Australian steel was the cheapest in the world; today it is the most expensive. That has been caused by the inflation brought about by the previous Labor Government and by the contribution that increased wage demands made to that inflation. That is what the argument is about. The rate of steel erected in medium to large range vessels overseas per man hour is three to four times that of Australian shipyards. The current attitude of the Opposition and unions is akin to that of a drowning man flailing his arms and trying to take everybody in sight underneath the sea with him. It is reminiscent of the attitude of the Tolpuddle martyrs in the industrial revolution when they smashed machinery.

Let us look at what is happening in the trade union movement today. The unions are banning new ships; they are to strike tomorrow. They cannot even form a single union that was recommended by the Trade Union Congress in 1975. The unions have caused the collapse of talks between management and labour that were to take place tomorrow. As Mr Butler of the Newcastle dockyards said in this morning’s Press, the shipyard strike could jeopardise everything the industry had been trying to do to improve its position. There is an argument between the communist unions and the right wing unions. There is a report in today’s Australian that the National President of the Ironworkers Association attacked the Amalgamated Metal Workers Union, describing it as ‘arrogant, senseless and separatist ‘. One can only assume that the left wing unions have called the tune for the Opposition here today and have asked the Opposition to bring forward this matter of public importance for discussion. I wonder whether the Opposition really knows what it is doing in raising this matter. I quote from the House of Representatives Hansard:

Our future does not lie in protecting weak industries with higher tariffs but in encouraging industries for which there are continuing markets.

Mr Abel:

-Who said that?

Mr Baillieu:

-Bob Hawke.


-It was not Bob Hawke; he is not here yet. Who said that? The Leader of the Opposition (Mr E. G. Whitlam) said that last night in this House. It is recorded at page 499 of Hansard. I thought things were bad in the Labor Party. I know that Labor Party members do not know who is leading them. I know they do not know what they are doing, but one would think that today, in bringing forward this matter of public importance, they would have at least paid attention to what their Leader said to them last night.

Mr Baillieu:

– They know not what they do.


– As the honourable member quite rightly interjects, they know not what they do. I say to the people of Whyalla and especially to the women of Whyalla and Newcastle that when their husbands come home they should tell them that the Communists are pulling them out to wreck their livelihoods. I say to those women: ‘Follow the example of the women in Northern Ireland and go out and march in the streets of Newcastle and Whyalla tomorrow. Go out and do that to demonstrate your disgust at what is happening and also tell the people of Australia that Australians are capable of working’. Let us ask the blokes who rebuilt Darwin. Let us capture the spirit of Darwin and let us stop all this panic button lifeboat attitude of the Opposition.

This industry provides a case study. There was a unique opportunity for shipbuilders and unionists to get together. It is tragic, sad and regrettable that this has not happened. Today there is a chance, as there has never been before, for labour and management to get together. The formation of a shipbuilding council created an opportunity for that to happen in this industry but it has not happened. It is really tragic.

The Minister, in his excellent speech, referred to some comments that had been made by the honourable member for Port Adelaide concerning support and subsidy in overseas countries. The honourable member for Port Adelaide and the Premier of South Australia are well known for their acting. I think that we might move the honourable member for Port Adelaide into the oscar class of the Premier of South Australia. We know that the Premier of South Australia fell off an elephant. They are both going to fall off the shipbuilding stage when they talk of overseas subsidies being greater. As the Minister pointed out, in Japan there are no direct subsidies to shipbuilding, in Sweden there are no direct subsidies, and so on. I say to this House and to the people of Australia that tomorrow’s national strike is a discredit to the Opposition and to the unionists involved. It really shows what is happening in this country today. What has happened to the de facto Leader of the Opposition? He has not spoken. Mr Hawke has been very silent today. What is he doing?

Mr Abel:

-He is probably busy planning pre-selection in Melbourne Ports. That would be tragic because I have a great respect for the honourable member for Melbourne Ports (Mr Crean). If Mr Hawke ever got that pre-selection, he would be beaten.

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


– We have just listened to a raving, ratbag speech by the honourable member for Higgins (Mr Shipton) about what goes on in the shipbuilding industry. He would not have a clue. He has never worked in a shipyard in his life. He referred to left wing unions and right wing unions. As a member of a Government committee he was most anxious to talk to the left wing unionists in Newcastle, Whyalla and other places. A great deal of emphasis has been placed on one point, namely, the industrial problems of the shipbuilding industry. The Minister for Transport (Mr Nixon) referred to statements that I made when I was the Minister for Transport. I do not retract one of the statements that I made. Everything that I said was true. I set about doing something positive. Those opposite were in government for 23 years. They allowed this industry to deteriorate and be faced with many problems. Those problems have to some degree been rectified today. The Government has annihilated an industry that was in the course of rectifying its problems. The Minister asked what we did about the problems facing the industry. He released a statement last night that I had done nothing about the industrial problems. Let me say to honourable members opposite that they did nothing to assist amalgamation of unions. They frustrated our legislation in the Senate and set up legislation whereby it was almost impossible for unions to amalgamate. The Government created a situation whereby demarcation, resulting from a diversity of unions, could not be rectified. When we were in Government we tried to solve those problems.

I refer honourable members to a publication put out by the Department of Transport called Shipbuilding Productivity and Industrial Relations in Australia. It is a report of the shipbuilding industry study mission in September-October 1974. Why did not the Liberal-Country Party Governments in 23 years of office come up with something like that? It took a Labor government with a Minister who knew something about what was happening in the industry to set about rectifying the problems facing the industry. The flow-on from this mission was a shipbuilding forum last year when further co-operation was built up between employer, employee and government. The outcome of that forum was that a shipbuilding council was set up and the parties were once again working together.

The honourable member for Grey (Mr Wallis), who has the Whyalla shipyard in his electorate, can tell honourable members that when we were in Government and really doing something about the shipbuilding industry, industrial disputes did not occur so frequently. Like my colleague and friend in the New South Wales State Parliament, Deputy Premier Jack Ferguson, I am concerned and disappointed that the workers at the shipyards will be on strike tomorrow. I make no bones about it. I think it is a retrograde step. But I can understand the frustration of the men who have been working for the past 12 months in an endeavour to attain industrial stability. The Chairman of the Newcastle State Dockyard Committee, Ned Andrew, is a personal friend of mine. I know the work that that man has put in an endeavour to get some industrial stability, to stop unnecessary and stupid strikes that have taken place. The men on that committee now find that all their efforts have gone for nought and their industry is finished. The men employed in the shipbuilding industry will be on the dole in a very short time. We say to the Government: We did something positive to correct the industrial problems that beset this major and important industry.

Mr Deputy Speaker, I have been called to order on a couple of occasions in the last week because I called certain Ministers, including the Prime Minister (Mr Malcolm Fraser) liars. Mr Deputy Speaker, you will not allow me to use that term again, so I will not use it. I want to draw the Minister’s attention to the fact that he is still telling untruths. I cannot say what I said about him the other day. I cannot repeat it. The Minister issued a statement last night which listed ships for which I allegedly placed orders overseas. In that statement he listed the Australian Emblem. You, Mr Minister, gave approval on 18 August 1972 for that ship to be built overseas. The Minister had better wake up to himself and learn what is going on around the place. I cannot call him a liar for making that statement but I think he has made a hell of a mistake in issuing it.

Mr DEPUTY SPEAKER (Mr Lucock)Order! The honourable member for Newcastle is aware of the Standing Orders. I think that is the third occasion on which he has made such an inference. It would be wiser if the honourable member proceeded with his speech.


-I will not comment further on it, Mr Deputy Speaker. I should like to put forward one point on the question that has been raised as to whether this Government is following the policies that were laid down by the Labor Government. That policy decision was made on 18 December 1973 and it was the result of an inter-departmental committee inquiry. The inter-departmental committee that was set up was not shelved. It reported and Cabinet made a decision by a majority vote- a very divided majority vote. The decision was made on 18 December 1973 when there was overemployment in Australia. We could not get a ship built anywhere in the world. The price paid for ships at that time represented the true cost of building them. When debating the Ship Construction Bounty Bill 1975 the present Minister for Transport, then in Opposition, as recorded at page 3256 of Hansard of 3 June 1975 said:

The Opposition does not oppose the Bill ….

If the Minister is fair dinkum and intends to adopt all of our policies, why did he pick on this particular policy? Why did the Government abandon our decision to build the graving dock at Newcastle? Why did it abandon our 40-40-20 policy? Why did it abandon the decision to set up a Commonwealth-State shipbuilding corporation? Why did it get rid of the Road Safety and Standards Authority? Why did the Government abandon our policy of cost recovery? Why did it cut back expenditure on roads?

If I had time, I could go on and on about the broken promises of this Government in relation to transport alone. The Government supported what we did and under totally different circumstances. When we made that decision we indicated that it would be reviewed in 3 years. In December 1976 it was to come up for review. I should like to place on record what we intended to do with the four 1 5 000 tonne ships in question that have been ordered overseas. The Government prefers employing Japanese labour to employing Australian labour. We had to make a decision on this matter when in Government. I submitted the matter to Cabinet last year for inclusion in the Budget. I am sorry to say that this submission and the proposition to purchase James Cook could not be accepted at that time because of the monetary problems we were facing. On 6 November last year, the honourable member for Oxley (Mr Hayden) who was then Treasurer, said that I could go ahead and purchase James Cook at a cost of $23m. The Minister knows that is a fact. He had to finally implement the decision.

On 10 November the honourable member for Oxley and I made a decision in my room that we would not have these ships built overseas but that they would be built in Australia so that the Australian shipbuilding industry could be maintained. He requested me to put a submission to him that we go on with the job of building. We had no intention of putting Australians out of work. The fact of the matter is that it is a broken promise on the Government’s part. I ask the Minister to read his Government’s policy statement of May 1975 which was referred to by the honourable member for Port Adelaide (Mr Young). Today’s policy is certainly not the same policy as the policy of May last year. The Government has brought about the closure and the destruction of Australian shipbuilding. I did place orders overseas for 4 large bulk ships- two 120 000 tonners and two 140 000 tonners. But it was purely and simply because there was not one shipyard in Australia which could build ships of that size and you know it. You are only distorting the facts.


-Order! The honourable member’s time has expired.


-The honourable member for Newcastle (Mr Charles Jones), the former Minister for Shipping and Transport, who has just resumed his seat stands here indicted and condemned in the eyes of the Australian public as the Jeremiah, the prophet of doom, the person who presided over the destruction of the Australian shipbuilding industry. He has the audacity to stand here today and suggest that this Government is destroying the Australian shipbuilding industry. This is garbage! The speech the honourable member for Port Adelaide (Mr Young) also was garbage! The verbiage that has come forth here today from the members opposite is a self condemnation which I never thought I would here in this House. I did not believe it when I saw this matter listed on the notice paper today as a matter of public importance. It refers to the supposed destruction by this Government’s policy of the Australian shipbuilding industry. I did not think the Opposition would have the audacity and the cheek to come before the Australian people and condemn itself. So be it.

Let me read a few words from the former Minister for Police and Customs, the former member for Canberra who said at page 2553 of Hansard of 21 May 1975:

It is the Government’s objective to provide assistance which will assure the continuing development of a rationalised and efficient shipbuilding industry in Australia.

The Government at that time was introducing the Ship Bounty Bill of 1975. The Government complimented itself on the extent of that policy. If we look a little further to 2 June 1975 we find at page 3 179 of Hansard the former member for Bowman said:

Let me say that in the provisions of the legislation relating to the phasing out of the bounty the encouragement is there in very clear terms for the shipbuilding industry over a period to become a viable industry.

The very words that were expressed in 1975 were: ‘Well, here is the Australian shipbuilding industry. It is at your feet. We have given you a policy. It is a good policy. ‘ It was the policy of the former Minister for Shipping and Transport. The Government gave the Australian shipbuilding industry time.

I think I should quote some more words. The former honourable member for Canberra said at page 3258 of Hansard of 3 June 1975:

The subsidy that was paid to that industry in 1972-73 amounted to about $30m. There are 3,000 men employed in the shipbuilding industry.

That means that the Australian taxpayers meet the wages bill of the Australian shipbuilding industry.

Further, it is stated on that same page:

Indeed, the shipbuilding industry was inefficient.

There can be little doubt about the truth of that statement. So was said that the Australian Government pays nearly half of cost of construction of an Australian ship. At the top level, the subsidy is 40 per cent. The Australian taxpayers, through the Government, contribute that percentage. Let me measure that in terms of freight component that Australians pay on goods carried around the Australian coast. I have seen a figure- I draw on my memory- of approximately $9m quoted for the freight component. That is the unnecessarily high price paid for freight by Australians. Do not think that the Australian shipbuilding industry is not looked after because it is.

Mr Deputy Speaker, I have in front of me sufficient documents to condemn the Opposition, the former Minister and those who have spoken today for the next 2 hours. I have but 10 minutes. They stand here today- again I use the wordswith the audacity to suggest the Liberal-Country Party Government is going to close the Australian shipbuilding industry. Let me give an example of what the Opposition did to help the Australian shipbuilding industry when it was in office. In the Australian of 19 December 1974 there were headlines: ‘PM rejects higher tariffs as job-saver.’ Was the Government of that time concerned about tariffs? What is the effect of tariffs on the Australian shipbuilding industry? No one has bothered to mention that subject. The Prime Minister was not concerned at all.

Mr Jull:

-Which Prime Minister?


– The current Leader of the Oppositionthe temporary one. They were so concerned in those days, and now today we have the suggestion that they want to see this Government do something. This Government has done just that. It has not announced a policy; it is just continuing the present policy until the Industries Assistance Commission reference is brought back. As honourable gentlemen have heard here today, this is one of the quickest references the LAC has been given. That is the importance that this Government places on the Australian shipbuilding industry. We do believe in a viable and continuing Australian shipbuilding industry. But at what price?

We have heard a great deal about labour disputes. The honourable member for Newcastle says that under his administration industrial disputes decreased. The honourable member for Grey (Mr Wallis) seemed to know a lot about it. Let me give statistics of the labour disputes in the Whyalla shipbuilding yard under the Labor

Government. In 1972, the last year of office of the former Liberal-Country Party Government, there was a loss of 3.7 per cent of working days available. In 1973, the first year under the Labor Government, that figure increased to 6.71 per cent. In 1974 it was 7.88 per cent. In 1975, the year that the policy that gave such a tremendous boost to the industry was brought down, the one that is being condemned now, it rose to 12.43 per cent in the Whyalla shipyards. It is an absolute disgrace.

The honourable member for Grey (Mr Wallis), the honourable member for Newcastle and the honourable member for Port Adelaide say that the Opposition did a tremendous job when it was in office. It surely did a tremendous job! The Opposition got disputes to an all-time high. We have heard much about what the Opposition did with its policy. Let us not forget that the former Liberal-Country Party Government had a policy which did not take effect because of the change of Government in 1972. I draw honourable members attention to the subsidy arrangement that we had. It was the intention of the Liberal-Country Party in those days to give the shipbuilding industry a 45 per cent subsidy until 31 December 1975. The honourable member for Newcastle, the former Minister, the prophet of doom, changed that. He said: ‘No, the industry does not need 45 per cent until 31 December. Let us give it to them until 31 December 1974. Then let us reduce it to 37 Vi per cent in 1975. We will then scale it down to 33 per cent, 3 1 per cent, 29 per cent and 27 per cent. ‘ He forgot, of course, that the 45 per cent the LiberalCountry Party offered and the 35 per cent we offered until 31 December 1978 would have given the industry a rather better chance. But no, the Opposition thought it would save a little bit of money. Honourable members must be astounded when they hear the honourable member for Newcastle say that we know nothing about shipbuilding. I have had the opportunity to visit the shipyards also, and well might the honourable member for Newcastle say he knows a lot about it and that he is concerned. I believe he was employed at the shipyards on 3 separate occasions. He did not leave on his own accord on any of those 3 occasions. Nonetheless he ought to know something about it.

Mr Baillieu:

– Do you mean he was sacked?


– I could not say that; it would probably be unparliamentary for me to do so and I could not verify it. In the Newcastle Sun of 23 March 1976 there was a headline: ‘Strikes ‘suicide’ for dock’. Tomorrow we have another strike. This newspaper is printed in the area that the honourable member represents, Newcastle. Tomorrow we have a strike for 24 hours. Is that suicide? It is not destruction by this Government. Honourable members will want to know that the Australian shipbuilding industry is going to continue. If it is and there is a continuation of the present attitude of the Opposition, the fear of destruction that is generating through the industry at present will become a reality. It is our intention to see that a viable shipbuilding industry is retained. We are concerned for defence. That is why there are going to be patrol boats built here. There is a 6000 tonne heavy lift ship being built here. We are concerned for the Australian ship repair industry. There is no intention of closing the Australian shipbuilding industry.

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

page 553


Bill received from the Senate, and read a first time.

Second Reading

Minister for Health · Gwydir · NCP/NP

– I move:

That the Bill be now read a second time.

This Bill will give effect to the Government’s decision, as announced by the Prime Minister (Mr Malcolm Fraser) on 2 February 1976, to abolish the Social Welfare Commission. In reviewing the activities of over 50 bodies of various kinds which had been conducting inquiries for the Commonwealth, the Prime Minister said: … the Government has decided that the Social Welfare Commission and the Australian Housing Corporation, should be abolished while the functions of the Australian Development Assistance Agency and the road Safety and Standards Authority should be taken over by Government Departments. The Government has taken these decisions on the basis that the functions of the four bodies concerned can be carried out more efficiently and cheaply and more properly under Ministerial and Parliamentary control if conducted within a departmental framework.

The Social Welfare Commission was established as an interim committee by the Labor Government in early 1 973, and the Social Welfare Commission Act received the royal assent in November of that year. In reaching its decision about the Social Welfare Commission the present Government was mindful of the fact that in June 1975 the then Prime Minister (Mr Whitlam) had announced the Labor Government’s intention to abolish the Commission.

It is clear to the Government that the Social Welfare Commission is not required in a situation in which the Government, through its Ministers, will be determining priorities and maintaining direct communications on social welfare issues with State, local government and voluntary agencies and representatives of consumer groups. For example, there are many voluntary welfare organisations which are playing an important role in commenting on the formulation of social welfare policy. The Government will continue assistance to voluntary bodies and aim to upgrade mechanisms of communication with such groups in the voluntary sector. I will say a little more about our plans for improved consultation with the voluntary welfare sector in a few moments.

Funds are made available through the Department of Social Security to three of the larger national voluntary organisations each year. The Australian Council of Social Services (ACOSS), the Australian Council on the Ageing (ACOTA) and the Australian Council for the Rehabilitation of the Disabled (ACROD) Will receive- in 1976-77 grants totalling $0.45 m. In addition to the funding of these national bodies the Government supports a variety of other organisations in the welfare field. For example, grants paid through the Department of Social Security in 1976-77 to the good neighbour councils alone will total $ 1.22m.

The Social Welfare Commission did not directly administer any Commonwealth welfare programs. This is the role of the Department of Social Security and other relevant departments of State, which are under direct ministerial control. The Government fully recognises the importance of social welfare in the life of the Australian community. Accordingly,’ in order to ensure that adequate data is available for policy and planning purposes and that the best use is made of available resources, it is proposed to establish a social welfare research centre within the University of New South Wales. Preliminary negotiations have already taken place with the University which, since 1 972, has had a Family Research Unit funded through the Department of Social Security. Further details regarding the proposed Centre will be announced in the near future.

As mentioned earlier, the Government is taking steps to fulfil its commitment to provide effective mechanisms for co-operation and interchange of ideas with interested groups in the social welfare field. A national consultative group on social welfare is to be established to meet with the Minister for Social Security (Senator Guilfoyle) and her officers to discuss and advise on current issues in social welfare which come within the responsibility of the Commonwealth Government. Matters such as gaps and deficiencies in programs, arrangements for service delivery, assessment and review of priorities, and the modification of programs in the light of research findings, changing needs and social and economic conditions will be among those on which the group will be consulted.

I envisage that the consultative group will have a membership of about 12 people comprising academics from relevant disciplines and other suitably qualified people active in the social welfare field, together with possibly one or two distinguished people with appropriate experience. It will include representatives of national welfare bodies and voluntary social welfare agencies, and will be serviced by the Department of Social Security. In establishing the consultative group the Government will ensure that there is no overlap or duplication between it and the more specialised advisory bodies such as the National Advisory Council for the Handicapped. . The basic welfare needs and problems of people are, in the main, similar throughout Australia but there are differences between States and, indeed, within the States. It is accordingly proposed to establish a social welfare consultative committee in each State and Territory. These committees will provide an input, in relation to the situation of people in each State, on problems or difficulties encountered in the administration of Commonwealth social security or social welfare programs at the State level. Arrangements are also being made to develop regular consultation between the Department of Social Security and organisations representative of women’s interests. This will ensure that the very valuable contribution which these groups can make in relation to the special needs of women is available to the Government in formulating its social welfare policies.

Further details of the consultative mechanisms proposed will be announced shortly but at this stage I can assure honourable members that our proposals will greatly strengthen our links with people and groups active in the welfare field. In addition to the continuing involvement of the Department of Social Security in income security issues, routine monitoring and evaluation of welfare programs are being developed and upgraded within the Social Welfare Division of the Department. A variety of case-study, survey, experimental and cost analytic techniques will be utilised to augment regular program monitoring. This will be particularly relevant in the introduction of new programs and the review of existing programs.

More specialised evaluations are also conducted within the Department. An example of such an evaluation is the cost-benefit survey of the Australian Government Rehabilitation Service which was conducted over 5 years and reported on in 1975. Findings from studies such as these provide essential information for the formulation and development of policies and programs. The importance of independent evaluations conducted outside the Department of Social Security, supplementary to departmental evaluation and monitoring, is recognised and will be supported. Such evaluations have been conducted in respect of departmental programs. For example, in a pilot program 2 work preparation centres for the mildly mentally retarded are being evaluated over a 3 year period by Macquarie University in Sydney and Monash University in Melbourne.

The Government will continue to support independent inquiries which examine various aspects of the social welfare field. These inquiries, of which the Poverty Inquiry and the National Superannuation Committee of Inquiry are examples, are particularly important in contributing to the development of social welfare policy. Honourable members will recall that in 1972 the Liberal-Country Party Government commissioned, with the support of the State Ministers responsible for child and social welfare, a family research project within the University of New South Wales to undertake a series of studies directed towards understanding and documenting family disruption and breakdown and changing family patterns in Australia. The Government has given undertakings that an examination would be made of activities of the Social Welfare Commission to ascertain the extent to which existing research projects and tasks would be continued.

The Minister for Social Security has already announced the Government’s approval for the continuation of research projects initiated by the commission and being undertaken by outside bodies and institutions. On abolition of the commission these projects will be administered by the Department of Social Security. We have also agreed to the funding of 2 additional research projects and 4 fellowships in welfare studies. Two major areas into which a number of these projects have a substantial input are the development of services relating to families and social welfare manpower planning. In reference to the former, wide ranging research is being conducted on family services in each State and the Territories, to ascertain current and future service needs of families in Australia. These studies are complementary to the work of the commission’s Family Services Committee on which is represented relevant departments at Federal and State levels, and the voluntary welfare sector. The Family Services Committee will continue in order to complete a major report in this area during 1 976-77.

In relation to social welfare manpower planning, present statistics concerning the workforce in the welfare field are not satisfactory. A continuing study of the changing roles of existing workers and the emergence of new needs in the community requiring new types of personnel, both professional and voluntary, if necessary. This work will be undertaken within the Department of Social Security. The meeting of State Social Welfare Ministers held in Darwin on 2 1 May 1976 identified social welfare manpower planning as of vital importance and the Minister for Social Security has agreed to the Minister’s request that the work initiated by the Social Welfare Commission in this area be continued, with more direct involvement of the States as they are major users of welfare manpower. Investigation will continue on the need for a national body to co-ordinate education in social welfare in Australia. This study is seeking information from a wide range of interests, including tertiary institutions, employers, practitioners in the field, professional associations, voluntary organisations and industrial groups.

At the Darwin conference of Ministers there was also strong support for standardisation of social welfare statistics. It was noted that there was great difficulty in arriving at priorities in social welfare or making any meaningful comparisons of welfare programs without having an adequate data base. The Minister for Social Security agreed that her department should undertake work immediately in this area seeking the co-operation of the Australian Bureau of Statistics in setting up a working party, comprising representatives of relevant Commonwealth and State government departments, to examine questions of the standardisation and adequacy of social welfare statistics and the desirability of convening a national conference on these matters.

The staff of the Social Welfare Commission now occupy Public Service Act positions which are included on the establishment of the Department of Social Security. Action will be taken to transfer commission staff to the unattached list of the department on repeal of the Social Welfare Commission Act. Some officers will be used in activities, such as administering research projects and fellowship awards, servicing the Family Services Committee and undertaking work in the area of social welfare manpower planning, responsibility for which will be absorbed by the department. Others will be involved in other on going tasks in the Department of Social Security, either associated with former responsibilities of the Commission or with other responsibilities of the Department. A number or officers have already left the Commission; of those remaining some will be absorbed in the Department of Social Security, and some may obtain positions in other Commonwealth departments.

The Government is mindful of the work which the Social Welfare Commission has undertaken but, for the reasons I have outlined, it is now considered opportune to consolidate advice on and research into social welfare matters within the appropriate departmental structures. As I have already indicated, consideration has been given to the existing commitments of the commission so that wind-up action can proceed in an orderly and efficient manner. I commend the Bill to the House.

Debate (on motion by Mr Scholes) adjourned.

page 556


Second Reading (Budget Debate)

Debate resumed from 24 August, on motion by Mr Lynch:

That the Bill be now read a second time.

Upon which Mr E. G. Whitlam had moved by way of amendment:

That all the words after ‘That’ be omitted with a view to substituting the following words: ‘the House condemns the Budget because-

it pursues a policy of unemployment as a weapon to reduce real wages and salaries;

it abdicates federal government responsibilities and forces the State governments and local governments either to reduce their services or institute additional charges, or both;

it introduces an additional tax in the form of the Medibank levy, thus further reducing consumer spending;

it reduces the availability of services to the whole community but particularly to those most vulnerable to hardship notably aborigines, the unemployed and migrants, and

it fails to institute selective stimulatory expenditure to reduce unemployment and restore consumer confidence’.


-In the few moments that remain to me in this debate I want to draw attention to one other matter which is outlined in the Budget, namely, the deferment of aged persons accommodation commencements. A very serious situation in respect of accommodation for aged persons is developing in the electorate which I represent, and I think in most electorates. Accommodation of this type is subject to an extremely long lead time between the commencement of projects and its occupation. Pressure is also building up because of the increased differential between subsidies and the cost to aged persons living in private nursing home accommodation. As I mentioned last night, the differential in Victoria is currently around $30 and it will go higher during the year.

The Government as an economy measure decided to spread over 3 years some portions of its contribution towards the provision of accommodation for aged persons. This slowing down of construction can only add to the problem and create conditions of serious hardship for large numbers of families and aged persons. I think it is an action which cannot but be considered to be reprehensible. I believe that the situation in which money is to be saved at the expense of the people concerned who are no longer in a situation to care for themselves and whose dependants are not always capable of looking after them is something less than satisfactory.


-Order! The honourable member’s time has expired.


– I rise to support this Bill. So far we have had a dismal, dull and lack-lustre performance from the Opposition. Except for the honourable member for Corio (Mr Scholes), who has just spoken, we have not had one constructive suggestion from the Opposition. We have had instead a lesson in academic destructiveness. Members of the Opposition are opposing for the sake of opposition, without conviction and without hope. Compare the performance we have had from the Opposition with that of Mr Wran, the Labor Premier of New South Wales, who spoke up and said that in spite of political disagreements he would work with the Budget for the sake of the future of Australia. Surely that is the sort of leadership which we should be expecting from the Opposition, but we are not getting it. The Opposition is trying to weaken the national resolve by looking back, not forward. The Budget looks to the future. It is a budget of responsibility, resolve and reason. I congratulate the Treasurer (Mr Lynch) and the Government on their courage in bringing down this Budget which will set

Australia on the path to recovery after the disastrous 3 years of the Labor Government. All Australians will be better off in 12 months time.

The Treasurer, in his Budget Speech, talked about emerging from shell holes. The enemy which we are fighting is inflation, so that unemployment may be reduced. At question time today the Prime Minister (Mr Malcolm Fraser) made very clear the connection between inflation and unemployment which the Opposition does not seem to have realised or at least admitted in this debate. I have had some experience of emerging from shell holes. I know how difficult it is to muster the courage to get out of the shell hole and risk exposure to shot and shell. Once out of a shell hole it is vital to keep going steadily forward. All Australian infantrymen are trained that once an attack starts they must never falter or stop. There is a great natural temptation to hit the ground for safety, and once down it is very hard to get up again and continue to advance. To keep going among shot and shell takes courage, teamwork, leadership, discipline and training. If Australians are to win this battle against inflation and unemployment, we will need to show some of the great qualities that have made Australian infantrymen among the best in the world. We must move steadily forward to attack inflation. Once we start moving we must not falter or stop, whatever the problems. There is no doubt there will be problems.

There is need for teamwork and leadership by business, management, unions, governmentsboth Federal and State- and by the Opposition but we will not get it from the Opposition. We must all work together with a common aim. The Government must have the courage and the nerve to stick to its objectives. This does not mean that we should be inflexible. Obviously there will need to be changes and adjustments during the year as circumstances change. Business must have the courage to invest, produce and employ. The whole nation must go forward with confidence. Franklin Roosevelt wrote just before he died in April 1 945:

The only limit to our realisation of tomorrow will be our doubts of today.

I think the Oppostion should read that statement again.

This is a Budget of social responsibility and social compassion. A major advance is the new family allowance scheme which will help 800 000 disadvantaged children and which will give their mothers an assured income. This is one of the major social moves since Federation. The Government has been given little credit for it in public, certainly none by the Opposition. The Opposition, when in government, did not introduce it; we did. There is no doubt that the mothers who are getting their cheques now will give us the credit. They are giving us credit. Most of my electorate does not have television or commercial radio reception. In some areas there is a tendency for families to be larger than families in other parts of Australia. This applies particularly to the Aboriginal population which will benefit greatly from the new family allowance scheme. The other great advance is tax indexation, which will cost the Government $ 1,200m in a full year. This will keep the Government honest and will prevent the tax rip-off which we experienced under Labor. Again, this was not mentioned by the Opposition. The Government has done its share to keep down inflation by not increasing direct or indirect taxes. The Medibank levy is not a tax; it is a charge for service.

Another major social advance is that pensions will be automatically adjusted to the cost of living every 6 months. This takes pensions out of the political arena. This was done by the present Government, not by the last Government. The abolition of the property component of the means test for pensioners will help many people. I trust that the next Budget will begin to carry out the Government’s promise to abolish the means test. I realise that this cannot be done in a hurry, but I hope that the next Budget will move to bring down the present means test age limit of 70 years. It is pleasing to see provision made for the building of old people’s homes during the next 3 years. Expenditure on such homes was slashed in the Hayden Budget of last year, despite the statement of the honourable member for Corio a few minutes ago. It is also pleasing to see that the allowances for handicapped children have gone up from $ 10 to $ 1 5 a week and that the expenditure on child care programs has been maintained. This is a Budget of social compassion and responsibility.

It is also a Budget to get business moving again. The new incentives for business are considerable, and they have started to work already. The concessions in relation to estate duty are the beginnings of what I hope will be the complete abolition of this unjust and iniquitous tax.

I spent an interesting time in my electorate last weekend testing the reactions to the Budget. They were generally very favourable. I had a Tetter today from a pensioner who, I am sure, did not vote for me at the last election. He had the grace to write to me and say: ‘Well done, for automatically increasing our pensions every 6 months. It is something we wanted for a long time. We have been trying to get it for 3 years ‘. A man to whom I was speaking said that it was a well thought out piece of financial management. I hope the Treasurer hears that.

Because of the Budget’s provisions the mining industry can now get going again, after 3 long years of Labor neglect and obstruction. This is becoming an increasingly important industry in far north Queensland. Its future is now much brighter that it was. A vital mining industry will give much employment, and the sooner the better.

We have heard a lot today and on other days about the problems of primary industry. They are very real problems. My electorate has its fair share of them. I think it is worth repeating what has been done by this Government so far to assist the rural sector. Let me list a few of the things which have been done. They include the suspension of the meat export levy, the reintroduction of the investment allowance for new plant and equipment, the provision of low interest carry-on finance for the beef industry which, in this Budget, amounts to $15m from the Commonwealth and which will be matched by the States on a dollar for dollar basis. That is a total of $30m. There will be more if necessary.

There is the extension of the rural reconstruction scheme to the end of the this year, at a cost of $10m, while the Government considers the recommendations of the Industries Assistance Commission. The dairy industry, which was discussed today, has been helped by underwriting the price of skim milk powder at $300 per tonne and by underwriting butter and cheese to $900 and $600 per tonne respectively. Both of these are very important provisions. There is the provision of $ 13.5m for adjustments in the dairy industry, and the provision to the States for this financial year of $12m for the eradication of brucellosis and tuberculosis. There is also $6.5m for a brucellosis slaughter compensation scheme, as recommended by the IAC.

Another major social provision is the funding of household support which allows unemployment benefit to be paid to primary producers who are suffering severe financial hardship and who have registered for unemployment benefits. This has made a very great difference in my electorate, particularly in the beef areas where I know of some large families with no income who were finding it increasingly hard even to feed their children. This assistance was introduced by the present Government, not by the previous Government despite many requests for it. The previous Government said that the implementation of such a scheme would be too hard.

I am very pleased that the Minister for Primary Industry (Mr Sinclair) has stated that the Government will keep the financial situation of rural industries under constant review and that further assistance will be provided when necessary. Of course much more needs to be done, but the first priority must be to reduce inflation which is an enemy of all rural and primary industries.

Since the Budget announcement I have talked to many people in my electorate. It seems to me that those who are the worst off are often the most understanding and sensible.

Last weekend I went to an area about 450 kilometres west of Cairns and met many people in the cattle industry. These are people suffering desperately from very low market prices and very high transport costs. It is not worth their while at present selling their beasts, but they understand and appreciate what is being done to help them. They do not want government handouts, although they do want low interest loans and carry-on finance, which they have got, and they would like some form of orderly marketing, which I hope they will get. What they really want is markets for their beef and reasonable prices.

They know that the Prime Minister, the Deputy Prime Minister (Mr Anthony) and the Minister for Primary Industry all nave been overseas doing their best to open up new markets and to encourage the opening of old markets which we have lost in recent years. I was most impressed and heartened by the sturdy independence of the beef producers to whom I spoke. They are determined to hang on until markets improve. They are doing all sorts of things to help themselves. One family I know has a contract for cutting railway sleepers from the timber on its property, which gives it a small cash flow while it cannot sell its cattle profitably. Others are working on the roads for their local councils so they can keep going. They are particularly bitter about the actions of the unions which are holding up primary produce exports at the moment. They are stupid and unnecessary disputes, mostly demarcation disputes which have nothing to do with real industrial action.

The scheme for income equalisation deposits announced in the Budget is a major advance, particularly for those in primary industry who are doing well. It certainly will not help the beef producers at the moment, but a number of beef producers to whom I spoke last weekend were pleased about it. They are sensible fellows. They realise that if they had had this concession during the 1973 boom they would have been able to save from their heavily taxed income of those years enough to help them weather the present terrible times. The IED scheme should also help the sugar and grain industries, which at present are doing well, although of course they are being pressured by increasingly high costs of production. Talking of sugar, I was shocked to find last week that one of the sugar mills in my area has stopped work because of a demarcation dispute between 2 unions about who should drive a new locomotive on a cane train. I think this has been going on for 5 days. It is costing individual farmers thousands of dollars in lost production, particularly those who have already burnt their cane.

Some honourable members are critical of the assistance given to rural industries. They do not realise how concerned rural people are about the amount of tariff protection to secondary industries which greatly raises rural costs. This year rural industries throughout Australia will receive assistance from the Government of about $286m. This compares with the tariff protection given to secondary industry, which is conservatively estimated at about $2,000m. The rural assistance is $286m as against $2,000m for secondary industry. I am beginning to agree more and more with that modest member, the honourable member for Wakefield (Mr Kelly), in his call for a reduction of protection for inefficient secondary industries, which only hurts the primary producer.

A Queensland representative in the other place has criticised the Budget because, he says, it does nothing for northern Australia. This comes well from a supporter of a Labor Government which did so much to increase the disadvantages of people living in isolated areas. What did the Labor Government do? It cut out the petrol equalisation scheme. People in Burketown now pay $ 1 . 1 4 a gallon for their petrol.

Mr Lusher:

– How much?


-They pay $ 1 . 1 4.

Mr Young:

– Bring the scheme back. You are in government.


-I hope we will. The Labor Government cut out the country airline subsidy. It cancelled the beef roads program. It cut out many country mail services or reduced their frequency. It doubled the cost of mail bag services. It reduced the length of telephone lines maintained by the Australian Telecommunications Commission from 24 kilometres to 8 kilometres.

It did nothing to help the hard-hit rural industries.

It was interested only in the big cities.

All the things I just mentioned must be restored to reduce the disadvantages of people living in isolated areas. This Budget goes some way towards doing that. It has restored pan of the subsidy to country airlines. It has halved the cost of mail bags. It has increased the length of telephone line which the Telecommunications Commission maintains from 8 kilometres to 12 kilometres. I hope this will be increased to 24 kilometres before too long.

I am delighted that the sum granted to the Royal Flying Doctor Service has been increased by $900,000 to $2m for this year. People living in the cities may find it difficult to realise the importance of this service in providing what is called a mantle of safety to the people of the north and also in providing the only communication network for many people. Together with all other honourable members representing large isolated electorates, I would like to have seen more done in this Budget, but I realise that until we beat the main enemy, inflation, and its relation, unemployment, we cannot expect too much. I hope that the next Budget will restore all those concessions destroyed by the Labor Government. I would particularly like to see the petrol equalisation scheme reintroduced and more money spent on our appalling roads. In future more must be spent on all forms of communicationon roads, on radio, on television, on ports and on airlines, all the things that make life more bearable for people in isolated areas.

All of us who live in Australia’s front line in the far north are concerned with defence. I strongly support the increases in the defence budget. They are the minimum required to keep the defence force going. I will not speak more on this subject now as I note it is listed later in the notice paper. It is vital that this Budget should work. It is vital for all Australians and for our future. I hope everyone in Australia will get out of his shell hole and move forward in the fight to beat inflation and restore employment in this country. I condemn the destructiveness of the Opposition’s amendment to this Bill and I strongly support the Bill as introduced by the Treasurer.

Melbourne Ports

-At the outset I must say that I do not expect as much of budgets as other people seem to. I have long thought that believing that something you do on the second or third Tuesday in August will irrevocably set the pattern for the economy for the following 12 months is sheer nonsense. By and large, a Budget at best is a statement of projected receipts and expenditure. These days an inordinate amount of discussion is devoted to the difference between the two, to what is rather generally known as the deficit. Candidly, I would not have thought that it would matter a great deal if this Budget had a deficit of $3 billion instead of the projected $2.6 billion when one looks at some of the things that might have been done. Another $400m could have been spent on things plenty of people can think of or tax collection could by $400m less, which in some respects can have the same effect.

Mainly I want to direct my remarks to this famous document, Budget Paper No. 2, which has already been misquoted and misunderstood. Some of the more relevant parts of it have even been ignored entirely up to date. I would like to say one or two things about the parts of that paper that seem to me to be the subject of argument at the moment. The rate of increase in employment this year is projected at something like 2 per cent. In numbers, apparently that means an increase in total employment by the end of June 1977 of about 100 000 people. It is easy to say these things but I think occasionally one should have some concept of reality.

For the benefit of the House I want to cite some figures for total civilian employment in Australia covering a 5-year period which embraces the life of the previous Labor Government and some 2 years of the Government prior to that. A kind of myth has developed that all the ills that have developed have been due to the last 3 years of the Labor Government and that somehow prior to that was a golden age. In the 5 years from 1971 to 1976-the period to June 1973 can largely be identified with the present Government in its then period of office from 1971 to 1972- male employment, which is the major part of total employment in Australia, rose from 2 924 000 to 2 940 000-an increase of about 16 000 or something like ¥2 per cent. From 1972 to 1973 it increased by 44 000, from 2 940 000 to 2 985 000-about 1 1/2 per cent. But in the first year of the ‘terrible Labor Government’- that is, from 1973 to 1974- total male employment increased from 2 985 000 to 3 068 000-a rise of 83 000, or more in that single year than for the 2 previous years put together.

Let me say to those who decry what happened under the Labor Government, that in 1973, the first full year of the Labor Government, more houses were built in Australia than ever before in Australia’s history and there were more people in total employment in manufacturing than in any previous period. The decline has taken place since. Of course it is nice and easy to attribute all of that decline to the Labor Government as though we are the only country in the world with either unemployment or inflation as a problem. The sooner honourable members opposite disabuse themselves of that mythology, the sooner they will realise how difficult it will be for them to do some of the things they claim they are doing and some of the things that are called the ‘assumptions’ of this Budget in Statement No. 2 attached to the Budget Speech.

Government employment in the 5 years from 1971 to 1976 increased by something like 18 per cent whereas total male employment in the private sector of the economy increased by only 3Vi per cent over that period. We still claim that the basic work unit in the community is the married male. There are more of them in employment than any others, but their prospects are not very rosy. It will not be easy to find 100 000 more jobs, which is what a 2 per cent increase means, putting faith basically in the private sector. It will be a task of much greater significance than the Government seems to estimate. In Statement No. 2 the Treasurer said in a quaint way:

The longevity of recovery therefore depends on the achievement of steady, sustainable growth in both private consumption and private fixed capital expenditure.

I am not too sure sometimes what is meant by ‘consumption’, just as I do not think there is always great clarity as to what is meant by ‘savings’. We have not quite discarded the Keynesian concept that savings equal investment and people do not save in the abstract unless there is something into which to put their savings which somebody else invests for them.

On page 6 of Statement No. 2 there is this comment:

The introduction of Medibank resulted in a smaller proportion of hospital services being recorded in private final consumption, and a larger proportion in government final consumption; this has had the effect of reducing the level of recorded consumption since the September quarter 1 975.

It would seem to me that the obverse of that is that when the new Medibank scheme begins to operate from 1 October, this will reflect in statistics as an increase in consumption. Is that the sort of increase in consumption that the Government believes will lead to this longevity of recovery and will stimulate the economy? It seems to me that we have to look a little more deeply at some of the analysis in this document. Let me start with one statement on page 25 which says:

In their nature monetary forecasts tend to be even more fallible than activity forecasts.

I have tried to suggest already that one of the activity forecasts of a 2 per cent lift in total employment between now and the end of June 1977 seems to me to be a very fallible concept. Equally, there is a sort of reliance on this blessed quantity called M3. I am not too sure whether everybody knows what M3 is, but broadly it is the total of trading bank deposits, the total of savings bank deposits and the total of cash and notes in the hands of the community. At 30 June 1976 the aggregate was near enough to $33,000m. The projected increase in M3- that is, in the volume of those rather curious figures that are not self-generating but which tend to be generated upon- is 10 per cent to 12 per cent. An increase of 10 per cent would be of the order of $3,300m and an increase of 12 per cent would be of the order of $4,000m- a not very small difference of $700m. But there will be a lot of difference in the consequences to the economy as one or other eventuates.

What are called the ‘assumptions’ on page 24 seem to me, instead of being realistic and fundamental concepts, to be a little bit of what might be called ‘by guess and by God’. Even the weather, for which God rather than the Government can claim responsibility, is a factor as it is stated that ‘seasonal conditions will permit little if any increase in aggregate farm production’. That is one of the assumptions underlying the Budget. It seems to me that the critical one which underpins all of them is the fifth one:

Some form of partial indexation of award wages will continue, as will restraint in increases in other wages and conditions of employment.

It goes on to underline all of the 5 assumptions. I do not have time to quote all of them. Of all these assumptions the most crucial is clearly the last one. In other words, all the eggs are in the basket of partial indexation. I believe that the union movement, agreeing to indexation under the previous Government, was the fundamental factor that led to the relative decline in aggregate wages for the year and to some hope that inflation is beginning to lessen. But that, in essence, was some kind of compact of faith, if you like, between employer and employee, with the Government holding the ring fairly. But what will happen when the Government seems to be going in to hold the ring unfairly- that is, in favour of the employers’ side, or profits if you like, against wages? There is no certainty that that great underpinning assumption can be relied upon. I believe that the Government has got to come clean in this regard. How ‘impartial’ is it going to be in its definition of the meaning of ‘partial indexation’? All the evidence to date throws a lot of doubt- at least in the minds of the unions- on the impartiality of the Government in determining that fundamental part of the equation.

The other assumption, which seems to me to be a very dubious assumption in these days, is that there can be an increase in total consumption in real terms at the same time as there is a decline in wages in real terms. After all, whether honourable members opposite like it or not, wages are still the biggest single source of consumer demand. It seems to me again to be putting a lot of faith in savings being spent. After all, 18 months ago it was apparently a virtue to save; now apparently it is a virtue not to save, in the interests of the economy. I do not believe that enough study has been made in this country, or in other parts of the world for that matter, as to what might be called the anatomy of saving. As I said earlier, people may save for a rainy day but, as I have said before, in the words of the poet T. S. Eliot, ‘people are ready to invest but most people expect dividends’ or returns. The same thing goes for people who save; they expect to get some return on the investment. Last year the Government induced them to do so by means of issuing a new kind of savings bond, on which it offered an interest rate of 10.5 per cent compared with the going rate of 9.5 per cent. Apparently the people who took advantage of that offer can cash in their savings bonds after another month, or if they hold them until the end of this month. Maybe there will be a tremendous surge to add to the lower real earnings out of savings. Of course, the mistake may be made that the people who have the savings are different from the wage earners. I think too many easy assumptions are made in that regard.

When one looks at the Budget document to ascertain what induced the increase in private consumption last year, one finds that in the first half of 1975 it ‘was supported by some expansion in exports but also, and more significantly, by a strong growth in total government expenditure, which accounted for half of the increase in domestic expenditure in that half-year period’. That statement can be found on page 6 of Statement No. 2. While it is easy to put together those assumptions in the nice neat parcel in which one finds them on page 24 of Statement No. 2, it seems to me that there has not been enough homework done on what might underpin it. Some reference is made for instance to what might happen in overseas countries. If there is a lift in their economies, that will impact upon the fortunes of the Australian economy.

To return to the first of those assumptions, ‘the general stance of monetary policy will be such that the banking system is able to meet the financial needs of the economy while being less than fully accommodating to the inflationary demands’. What does that mean? Does that mean that if the Government or the bank managers believe that the credit demands on a particular firm are due to the fact that it is paying higher wages than they think it should, it will not be so easy to give that firm bank accommodation? But if they think that it is genuinely investing in expansion they may be more disposed to do so. While it is an easy assumption to make, I do not think that in the realities of practice this sort of thing is thought through at all.

Who put this easy document together? It is always interesting to ponder on that question. For a considerable number of years I have found it to be a central part of the anatomy of the Budget, but very little discussion is ever heard about it, other than the picking out, as have already been picked out, one or two figures to gloat upon if you want to, and to defend if you have to. How to get back to the real things that are going to make happen in Australia what the Treasurer, and presumably the Government, see as the longevity of recovery in Australia- that is, the achievement of steady and substantial growth in both private consumption and private fixed capital expenditure- has not, I believe, been worked out in depth. In these days it is common to say, of course, that we can always have a ‘mini Budget’. The only virtue I see in a ‘mini Budget’ is that at least it implies that ‘maxi Budgets’ are not as good as some people think they are. The lesson has to be learned in Australia that the Australian economy can change, for reasons internal and external, in the course of a year. It may be necessary to change tack sustantially within that year, and I think the sooner that lesson is learned the better it will be for the level of discussion in this House.

La Trobe

-The Budget introduced a little over a week ago has set out in a logical and thorough way the course the Fraser Government has mapped out to put Australia back on the rails. In one sense the Budget is predictable. Anyone who cared to read the Governor-General’s opening speech to this Thirtieth Parliament would see this statement:

Control of inflation is the Government’s first consideration. Unless inflation is brought under control there will be no adequate employment opportunities, no soundly based return to prosperity.

Agreements on this stark but simple fact of economic life is almost universal. In the time of previous Labor Government, Treasurer Hayden made the same comment in the 1975 Budget Speech when he said:

Inflation is this nation’s most menacing enemy. Unless it is curbed, the nation’s productive capacity will run down and job opportunities will diminish. If we fail to control inflation unemployment will get worse.

Later Mr Hayden added:

More inflation simply leads to more unemployment.

These are more than just bald statements; they are plain facts undisputed by anyone; that is, by anyone with a desire to see Australia pull itself out of the present disastrous slump and restore its people to a life of opportunity and success.

Debates in this Parliament have shown the wide disparity between Government and Opposition in relation to how the economic problems should be solved. But it should be remembered that debates about economic problems are not only debates about dollar signs, percentages or deficits but also are debates about the lives and interests of people. For that reason most of the idle rhetoric that Opposition members have used in these debates has fallen flat. Political opportunism has never sufficed for political realism. It is little wonder that so much of the metropolitan Press feels the need to play the role of Opposition, to question the Government, to go behind the large print and look for the details. This is the first Opposition since Federation to be paid such a back-handed compliment by the media. It is a compliment which the Opposition thoroughly deserves.

In this Parliament we have seen the deep and bitter divisions within the Opposition not only about leadership but about policy, particularly economic policy. Ships without a rudder are never expected to get far, but the Opposition’s ship lacks even the simple buoyancy to stay afloat. The recent Budget response by the Leader of the Opposition (Mr E. G. Whitlam) was a stark contrast to that provided by the present Prime Minister (Mr Malcolm Fraser) when he spoke about the Labor Budget a year ago. Last night’s attempt at bold rhetoric provided no substitute for reasoned argument. There was no suggestion of a viable economic plan that Labor would support. It was not a leader’s speech; it was an adolescent attempt by the Leader of the Opposition to justify his own discredited economic outlook and performance- the 2 factors which ensured that his own Party met with such electoral ruin last December.

The Opposition has fallen for the same old card trick, claiming that renewed level of government spending will, in isolation, restore employment and prosperity without increasing inflation. The Leader of the Opposition is back on his old course of extravagant promises coupled with knee-jerk bashing for enterprise- the same course which brought his Government unstuck when the electorate realised that beneath the veneer of benevolence, the Labor Party’s real thrust was destined to bring Australia to its knees.

There is no secret that the Opposition Leader feels uncomfortable talking on economic matters. By his own admission he regarded foreign affairs as his primary interest, even to the extent of branding himself as the greatest ever Foreign Minister. His entry into the fields of fiscal policy have hitherto been spectacular but infrequent. One memorable occasion was when he tried secretly and in collaboration with a handful of colleagues to avoid the accepted procedures and raise $4,000m in the bazaars of the Middle East. This was the money that he later claimed was for temporary purposes. More recently he admitted to using his precious time for a simple breakfast meeting with some shadowy figures from Iraq. Only when his job was on the line did he admit the purpose of that meeting- to solicit $500,000 for his Party’s electoral funds.

This is hardly a conspicuous record for a man who still aspires to lead the government of this country. But it is a record characterised by his present claim that the solution to unemployment is big government spending. Let us look at his own record during the last financial year. Labor increased government spending by 46 per cent yet unemployment still rose by 300 per cent. When, if ever, will the honourable member learn? We have seen in stark and bitter reality the fruits of the Australian Labor Party’s attitude to economic policy. Did anyone ever see such a sequence of crackpot, jackpot schemes foisted on any nation in period of 3 years? The ALP may like to forget many things but it has learnt nothing at all.

I ask honourable members to look at the dramatic increases in family allowances provided in this Budget. Is it any wonder this announcement was acclaimed as the most far reaching social reform since Federation? Had the Labor Government taken the trouble to read the Henderson Committee report on poverty it might have introduced such a reform. But no, the Labor Government, completely preoccupied with grandiose schemes designed only to transfer power to Canberra, ignored the plight of families. Under our new policy, some 300 000 low income families involving 800 000 children and with income levels that previously derived little or no benefit from rebate schemes will benefit the most. The Budget will put more real money back into people’s pockets by the introduction of tax indexation.

Dr Klugman:

– That is a lie.


-Order! The honourable member for Prospect knows very well that he cannot sling accusations around like that. He is on the speakers’ list. I suggest that he should wait his chance and should make a constructive donation of his own.


– The honourable member for Prospect reveals his own ignorance and lack of understanding of what is happening in regard to this Budget which will put more real money back into people’s pockets. The previous Government rejected the step of tax indexation. We said we would introduce tax indexation over 3 years. We introduced it within the first 8 months of government, yet the Opposition still likes to claim that we have broken promises. The previous Labor Treasurer said in his Budget Speech- this is something that might appeal to honourable gentlemen opposite- that to introduce tax indexation without cutting education and social welfare commitments would be ‘to ask the impossible’. Well, we have done it. We have made real increases in education funds and even greater increases in social welfare funds; yet we still managed to increase full tax indexation. Honourable members opposite laugh because they know that tax indexation serves to benefit people rather than to benefit governments in Canberra. What finer compliment could the present Treasurer (Mr Lynch) receive than to be effectively told by his predecessor that he had achieved the impossible? I compliment the Treasurer, the honourable member for Flinders, on his remarkable achievement.

Another feature of the Budget is shown by the results of our federalism policy. Though Mr Wran managed to win an election by wrongly convincing the New South Wales electorate that federalism was centralism in another form, this Budget puts the lie to that claim. Untied revenue grants to the States have increased by a staggering 2 1 per cent. Even more significant are the increases in revenue to local government- no less than $ 140m or an increase of 75 per cent. This is federalism at it very best- the federalism that was voted for in December last.

The Budget introduced by the Treasurer last week followed our consistent course to reform. We allocated $5,389m for our continuing commitment to maintain and improve social security benefits and welfare services. This figure represents- honourable members opposite might listen particularly to this- about onequarter of the total Budget outlay and a 23 per cent increase over the amount spent in this field last year. The Government has been concerned to make sure that people in greatest need receive the greatest assistance. This Budget allows us to fulfil that desire.

Our concern for people is illustrated in many ways. Pensions will now be automatically adjusted in line with consumer price index increases. This move will protect pensioners against increased living costs. For the first time it will take pensioner payments out of the political arena. The separate property component in the means test for pensioners has been abolished. From early November pensioners will be means tested on income only, including income from property. It is not a test based on the combined value of income and property. Many pensioners will gain from this significant reform. It will prevent injustices whereby many people are now denied the pension simply because they own property, and we know the Australian Labor Party takes a very dim view of people owning property.

For the thousands of Australian handicapped this has been a Budget of real reform. No other Australian Government has done more for the handicapped in one step. Allowances to handicapped children have been increased by 50 per cent. From the beginning of November the allowance will jump from $10 a week to $15 a week. Also the handicapped children’s benefit paid in respect of handicapped children in institutions has been increased from $3.50 a day to $5 a day. These 2 increases will benefit about 2 1 000 handicapped children in this country. Funds for handicapped persons’ assistance will total $ 1 2 1 m over the next 3 years. This will assist voluntary organisations to set up and operate sheltered workshops, therapy and training centres, and to provide accommodation for handicapped children and adults. For all of Australia’s handicapped children and adultsand the friends, relatives and guardians of the handicapped- this Government’s first Budget is a social document in the truest sense. The Government has shown to the handicapped that it is concerned first with people and not just with figures.

The Government has allocated $225m over the next 3 years to subsidise the building of aged persons accommodation. This again is a significant degree of assistance to an area of real need. It will provide urgent accommodation for about 15 000 aged people. Still, it is not enough. There are 18 groups in my electorate which are on the list awaiting funding. There are many more in the formation stages. This program will also assist voluntary organisations by ensuring a continuity of planning and building for the next 3 years. They will be able to borrow in this first year against the allocation for the remaining 2 years, bringing forward the time which it will take to get people into these houses. We have also introduced a special deduction to apply where an interest in an estate passes to a surviving spouse. The previous Government persisted with an arrangement whereby the surviving spouse to a marriage very often had to sell the family home in order to pay government charges. The Government regards this as a necessary and important reform as it is in an area of the law in which personal tragedies have been far too commonplace.

Following a view put by the Henderson inquiry into poverty, the Government has decided to implement a trial program designed to assist low income earners to choose their own rental accommodation on the open market. I hope it will be successful. I hope it will provide the Government with a new mechanism to make welfare housing sensitive to the needs of the users rather than those of the planners. We have come to the end of a stage of Australian history where politicians and public servants sitting in Canberra will make every decision for people who are disadvantaged or people in distress. The Government will be closely monitoring the progress of this important welfare reform. From those in need of special assistance to the ordinary working men and women, this is a Budget that puts people first. For the first time in 4 years, Australians were not hit with increases in indirect taxes to help pay for the expensive and wasteful Government programs that were introduced in the last 3 years. There was no extra tax on cigarettes, wine, beer or petrol. It was not needed and it was not wanted and it has not been introduced. One of the most specious suggestions that is continually put forward by Opposition members in this Parliament has been that the Prime Minister (Mr Malcolm Fraser) broke alleged election undertakings with respect to Medibank. I think that this farce has gone on for too long. I think it is time to put into the Hansard record- where the people of Australia can read it- what the Prime Minister said in the election campaign prior to the election of this Parliament.

He said time and time again that although Medibank would be retained there would be changes to it. I draw the attention of honourable members to statements made by the present Prime Minister at the National Press Club luncheon on 2 December.

Mr Young:

– Read his policy speech.


– Let us have a talk about the policy speech. Let us refer to the policy speech of 1972 when the present Leader of the Opposition (Mr E. G. Whitlam) outlined the great medical fund of which he had been talking for so long. I recall the honourable member for Port Adelaide (Mr Young) bleating the other day about the Medibank levy. In the first instance, who introduced the thought of a Medibank levy? Who brought in the legislation for a Medibank levy in the first instance? The honourable member for Port Adelaide should look at the Labor Party policy speech of 1972 to see whether he can find one single reference to a levy to fund the national health insurance program. There was not one mention of the word ‘levy’.

Mr Young:

– Yes, there is.


– There is not one mention of the word ‘levy’.

Mr Young:

– There is. Have a look at page 12.


– There is not one mention of the word ‘levy’ in the national health insurance program referred to in the 1972 Whitlam policy speech made at Blacktown. I do not know where the honourable member for Port Adelaide was at that time.

Mr Kelly:

– He was asleep.


– He was asleep. The honourable member for Wakefield picked him in one. The honourable member for Port Adelaide is just like the honourable member for Newcastle (Mr Charles Jones) who is allegedly so interested in the shipbuilding industry that last night, when the Leader of the Opposition was speaking about shipbuilding, the honourable member for Newcastle had to be woken up so he could listen. That is how genuine and concerned he is about what is going on in the Australian shipbuilding industry. The honourable member for Port Adelaide is living in another world, as are the other Opposition participants in this debate. I refer honourable members to the transcript of questions and answers at the National Press Club luncheon on 2 December 1975 when the present Prime Minister was asked about changes that he would be making to Medibank. He stated:

It’s not possible to be precise about what changes might be required because the form in which it was originally introduced by the previous Government -

That is, Medibank- hasn’t yet been operating long enough for us to analyse, to be able to analyse the deficiencies -

And there were plenty- and the virtues -

There were some- that might flow out of that.

The Prime Minister stated further

It’s not possible to indicate the areas where reform and change might be necessary until there’s been discussion with the States, with hospitals, with the professions and obviously with our own departments.

That statement was made by the Prime Minister at the Press Club luncheon in Melbourne on 2 December 1975. I feel it is important to put it into the Hansard record. I do so with the remote hope that members of the Opposition will read, mark, learn and inwardly digest the facts. The honourable member for Port Adelaide, who insists on talking about lies and broken promises, is entirely wrong and out of order.


-Order! The honourable member’s time has expired.

Mr Keith Johnson:

-The honourable member for La Trobe (Mr Baillieu) mentioned the shipbuilding industry in Australia. A debate took place on that matter in this House today. It is very pleasing to see how effective the Opposition is in having shipbuilding retained in Australia because I understand that the Japanese company, Mitsui, has already announced that it refuses to build the four 1 5 000 tonne bulk carriers until things improve in Australia. It is pretty obvious from that that the Japanese have a greater understanding of the problems associated with shipbuilding than does in fact the Australian Government, as shown in this chamber this afternoon.

This Budget would have to go down in history as the greatest fraud perpetrated on the Australian people by this fraudulent Government. The men of straw who composed this deceptive document and especially the Treasurer (Mr Lynch), who seems to have as much difficulty as the Prime Minister (Mr Malcolm Fraser) and everyone else in understanding it, have exposed for all to see the tactics they intend to employ to achieve their ultimate strategy. Obviously, the Government intends to reduce living standards until its friends in manufacturing industry can compete with such advanced and progressive places as Indonesia, Singapore, Malaysia, Taiwan, Hong Kong and South Korea. The

Government clearly wishes to import into Australia the poverty of the masses in those countries. It is the start of a massive transfer from wages to profits.

The next step in this insidious scheme is to smash the trade unions of this country. Perhaps not every trade union is at risk because the tame cat unions will be allowed to continue to show the rest of the world that our people have freedom to join industrial organisations. The unions that do their job and improve the lot of their members will be smashed beyond repair by the cynical increase of the numbers of unemployed in our community. Any attempt to forecast the number of unemployed must be a guess as the full implications of the Budget are yet to be revealed or felt by the community. However, only today at question time the Treasurer conceded that in June 1977 unemployment in this country will be much higher than it is in 1976. Having achieved both these positions one wonders what will come next. Nobody can deny that in recent years unemployment in Australia has increased- as, indeed, it has increased in every manufacturing country. The difference, of course, is that the Labor Government’s approach was to endeavour to share the wealth created by those who were not required to manufacture the goods we need or provide the services we demand. These people- men and women, young and old- were not callously used as ammunition to try to smash the trade union movement.

The attitude of the Liberal and Country Party members was to refer to these unfortunate people as dole bludgers. In their maniacal desire to obtain power they were prepared to sink to any depth. When this Budget starts to bite and the cynical and deliberate tactic of increasing the number of people unemployed is manifest, will those honourable gentlemen refer to these victims as dole bludgers? Will adequate social security payment be made to them or will we see a return to the soup kitchens? After all, how can you whip up the men and women unable to obtain work to accept work at lower rates of pay, then work extra hours at ordinary rates of pay? How can you cow the ordinary union member and incite him to resist attempts to maintain his living standards and to actively discourage him from seeking any share of increase in wealth which he alone creates? The answer, briefly, is to ensure that outside each factory gate, office and shop door, there is a large number of people seeking work. The tactic is transparent and obvious: Place social stigma on those unemployed, call them dole bludgers and constantly remind those in employment that they are all candidates for unemployment benefits if they do not toe the line.

Apart from this inhuman approach to the smashing of trade unions and reduction of living standards, we should look even further at the side effects of such medication. There seems to be great conflict as to whether we are to see an investment led or consumer-led recovery. The Government seems hellbent on investment but manufacturers in my electorate cannot enlighten me as to how investment in new capital goods will improve the economy. Their existing equipment is not used to capacity and unless it is not economical to maintain it, they have no intention of buying new machines. If they need new machines, they will buy them, investment allowance or not. Clearly the investment allowance must be meant for another sector. I will return to that point later. It is obvious that if things are going to be made, things have to be sold; therefore, manufacturers can put in as much equipment as they like but if they are not going to make things that can be sold, they are wasting their time. In other words, there is a need to increase consumer demand. The Treasurer, in his speech to this House on 17 August, said:

Businessmen will emerge further from their shellholes . . .

Shell-holes indeed! Is the Treasurer shell shocked himself? . . . and start buying plant, equipment and new buildings, re-stocking and taking on new workers only if the uncertainty wrought by runaway inflation can be removed from their calculations and profits again begin to represent a reasonable rate of return.

That was said more than a week ago. In this morning’s Melbourne Age there is a headline very easy to read: ‘No post-Budget Boost, Report Big Stores, Car Men. Retailers See No Recovery. ‘ The article states:

The state of business in retailing and car selling is grimwith the short term outlook for more of the same.

Together the 2 areas represent the keystone of the economy.

A Business Age survey yesterday showed that last week’s Federal Budget has had no impact on retail sales.

It also shows that major retailers believe they have had depressed real returns since the end of the March quarter.

Many also believe consumer confidence is a long way from being restored and fears of inflation will continue to lead people into increasing their bank deposits rather than spending.

In the long term they are hoping- rather than expectingthat the Budget will restore consumer confidence.

But there were no forecasts yesterday on when that renewed confidence would show through in higher sales.

The article also states:

The Business Age survey covered department stores, chain stores, prestige traders and supermarkets in both general retailing and food, as well as car sales.

If that article is true, and I have no reason to doubt it, the very things that keep the wheels of industry turning are the things they are manufacturing; yet the retailers, who are the only outlet to the consumer, do not see any real prospect in sight for consumer demand to continue or for there to be any increase in it. Savings bank deposits at the moment are at an all-time high. They are being maintained. Each year sees an increase in deposits- money going in but not coming out. I wonder whether the Treasurer or his advisers have ever pondered that aspect. Are we a nation of money hoarders? Are we all so wealthy that we can afford almost $400 for each man, woman and child in Australia, to be locked up in savings accounts? Do most of the people in Australia have as many goods as they require? Are they only purchasing necessities, or are most people unsure of their future?

Sitting suspended from 6 to 8 p.m.

Mr Keith Johnson:

-When the sitting was suspended I was talking about economic recovery and the doubts that exist in people’s minds as to the future. Deposits in savings bank accounts are at an all-time high. There is no doubt in my mind that because the people of Australia are unsure of their future, that is their position so far as employment is concerned, they are like the squirrel and are hoarding against the future. I believe that is the case, and unless this Government can restore confidence an increase in consumption will not occur and a number of manufacturing concerns will continue working below full capacity. This gloomy budget does nothing to dispel that uncertainty. In fact it aggravates the doubts held by the potential consumers.

Returning to encouragement for investment, it is interesting to have a look at the largesse bestowed by this Government on its friends, its financial supporters. Mining companies and oil companies are the major beneficiaries of blatent handouts. Another group of some significance is the de facto farmers of Collins Street and Pitt Street. Miners of minerals, hardly the poorest section of the community, are to receive $60m as a direct payment brought about by a complicated system of taxation allowances- not a bad sort of payback by anyone’s standards. Will the men who perform the work in the mines benefit from this handout ? I would be most surprised if the unionists who work in those mines receive any increase in their living standards; in fact I would believe the reverse would be the case. The poor impoverished oil companies such as Shell and Esso, which are both trying to decide which of the companies that they own they will sell to make ends meet, are to be released from paying a levy of $2 per barrel on each barrel of ofl produced. I wonder whether this cost saving will be passed on to consumers; or will it just be $2 straight into the pocket of the explorers.

The third group which unequivocally supports this fraudulent Government is the professional people who use farming as a hobby and as a tax dodge. The so-called income equalisation scheme is another backhander. Where was the National Country Party when this provision was popped up? Where were the so-called champions of the battler on the land? No genuine farmer will be able to participate in this taxation dodge. The battler hardly owns his farm now; the de facto owner is the bank or the pastoral company which holds the mortgage. If the farmer cannot earn enough to clear his mortgage, how can he ever set aside portion of his income to accummulate a fund which attracts a lower rate of taxation when it is drawn? The Prime Minister and his farmer Cabinet will benefit, and those who practice in Collins Street and Pitt Street will benefit also because they can plough into the fund up to $100,000 earned from any source. The words used are: ‘income obtained by primary producers from farm or non-farm sources’. It seems to me like a nice little superannuation scheme for professional people posing as farmers. Not a zack is provided for the daylight to dark farmer who has been conned into believing that the chameleonic National Country Party is caring for his interests. The sooner the farmers break that spell, the sooner they will realise that only the Australian Labor Party can really improve their lot. For very existence the working farmer must turn away from the National Country Party- verily the Dorian Gray of political parties, and as happened to Dorian Gray, time has caught up with it.

Reading the table at page 115 of the statements attached to the Budget Speech one is rather astounded at the estimates of income from general taxation revenue. One item that stands out more than others is ‘Estimated Collections from Income Tax- Individuals (a) Payasyouearn’. They are the headings. Last year $7,0 19.7m was actually collected from employees. This year it is anticipated that $8,775m will be collected. That represents an increase of $ 1,755.3m over the previous year, or a 25 per cent increase. ‘Income Tax- Individuals (b) Other Individuals’, in other words from professionals and self-employed people, is expected to total $2,532m this year compared with $2, 199.7m actually collected last year. That is an increase of 15.1 per cent. Companies from which $2,522.8m was collected last year are expected to have collected from them this year $2,900m, an increase of $3 77.2m or 14.1 per cent. How interesting! The wage plug cops a 25 per cent increase and he has no farm to siphon it off. The self-employed and professional gets 15.1 per cent increase and the companies get only a 14.1 per cent increase- an interesting set of priorities.

In his Budget Speech the Treasurer uses these words:

The most important step in relieving the burden of taxationthe indexing of personal income tax- has already been taken ant’, has been in operation for pay-as-you-earn purposes since 1 July.

It represents perhaps the most significant reform of the personal income tax system in our time and certainly the most costly in terms of revenue forgone.

I believe that our Treasurer is an honourable man, so if he tells us that what is being done is good for us we should not question him. But each night we should pray that he does not try to do too many good things for us because I doubt, whether we can afford it. It crosses my mind whether in his calculations he has taken into account the reduced number of taxpayers this year that his Budget will surely bring about. There will be more opportunity to elaborate on the cutbacks in real terms of funds available to various departments such as Health, Education, Environment, Housing and Community Development and Aboriginal Affairs. I believe that the backbench members on the Government side of the House will raise their voices in criticism during the Estimates debate. They are the ones who will have the odious task of explaining the impact to their electorates. I am told that those who rode in on the hysteria of 1975 and who hold their seats by narrow margins are already organising themselves into a fairly powerful and effective group. They are studying the successful coup of March 1975 to learn how to change leaders. They can be heard muttering: ‘He will have to go. We can win without him but we cannot win with him’. It will be interesting to see the changes brought about by these young gentlemen from Western Australia, Tasmania, Victoria, New South Wales and Queensland who have decided that Canberra is a rather comfortable place.

Manufacturing industry, without doubt, employs most people in Australia. I have heard it said in this House today and on previous occasions that any stimulus given to the mining industry will increase employment opportunities in Australia. Clearly that is a cliche. Anybody who knows anything about the mining industry will know that it is highly mechanised and that Australia does not even process the minerals that it extracts. They are exported in their natural state and therefore provide employment for people in other countries, certainly not in Australia. All that this Government has ever done is to place extra money into the pockets of the people who strongly supported it and paid for its election campaigns over the years, including the one in 1975. During the course of the Estimates debate there will be greater opportunity to speak of the effects on local government and the way in which no funds are being made available for sewerage projects in the bloated cities of Sydney and Melbourne which are becoming larger year by year and large areas of which are not sewered. This Government that seems to make some sort of a virtue out of lack of bureaucracy tells us it is going to continue with its funds for local government. However, rather than having one set of bureaucrats in Canberra it is now going to insist that every State- each of the 6 States- set up its own quota of bureaucrats to duplicate the work being done in Canberra. I believe that this comes under the heading of ‘New Federalism’.

Before I deal with the final part of my speech I would like to mention I was thinking over dinner about an error that was made today in a statement by the honourable member for Higgins (Mr Shipton). He gave us the advantage of his great knowledge of industrial relations and of the history of the trade union movement over the century. He told us about the industrial revolution and about the Tolpuddle martyrs who went to work and smashed up the machines of that time. The honourable member is not in the House at the moment. I hope he is listening to what I have to say. If he is not he will read my comments tomorrow. For his information it was the Luddites who smashed the machines. It had nothing to do with the Tolpuddle martyrs.

Having made that point, which I was most anxious to put forward, I now turn to the subject of public works and I specifically want to refer to lack of provision of funds for such works. Money spent by this Government on public works is not money that goes to bureaucrats, and that should be clearly understood. The Australian Government in all of its public works programs conducts or performs no work at all. In fact it lets out contracts to private contractors who employ people like the people in my electorate, ordinary people who are not public servants but who work for construction companies. Now that the funds from the Australian Government have been cut off these people cannot look forward to any employment at all. So in another area the Government, even apart from its overall policy and strategy, simply by making no funds available for public works is in fact increasing unemployment in this country.


-Order! The honourable member’s time has expired.

Debate (on motion by Mr Moore) adjourned.

page 569



-I present the Fifth Report of the Publications Committee.

Report- by leave- adopted.

LOAN BILL (No. 3) 1976 Second Reading

Debate resumed from 19 August, on motion by Mr Eric Robinson:

That the Bill be now read a second time.


-This Bill is really a machinery measure. To relieve from his obvious suspense the Minister for Post and Telecommunications ( Mr Eric Robinson), who is sitting at the table, I announce that the Opposition is not opposing this Bill. As the Minister explained in his second reading speech, it is necessary if a prospective deficit in the Consolidated Revenue Fund in 1976-77 is to be legally financed that we have this Loan Bill. The Loan Bill (No. 3) 1976 seeks authority for the raising of loans to finance mainly defence expenditure. Through this device finance expenditure which would otherwise be a call on the Consolidated Revenue Fund is financed from loan raisings in the Loan Fund.

The effect of the Bill is to transfer up to $l,600m of the 1976-77 expenditure from a fund which is short of cash, namely, the Consolidated Revenue Fund, to another fund that is not so short; namely, the Loan Fund. It does not authorise any expenditures in its own right. It does not involve a change in monetary policy or in debt management policy. Similar Bills to this one have been enacted by the Parliament for the same purpose almost annually for decades. The Australian Labor Party has never opposed such Bills. They are not substantive economic legislation. They are essential machinery measures required for legal and accounting reasons. The Opposition to such measures could be described frankly wherever it came from- and it has not come from the Labor Party- only as obstructionism. I remind the House that in the very long history of Loan Bills brought before the Parliament there has been one occasion only on which a Bill such as this one has failed, and this happened not long ago. We will come to that in a moment.

A few months ago when we were debating the present Government’s first Loan Bill I pointed to what I described as a piece of semantic nonsense. The Government had departed from previous practice and incorporated in the Bill a specific monetary’ limit of $700m on the amount that could be borrowed under this Bill which will become an Act. This was a meaningless gesture. The figure of $700m in the Bill was not going to be a constraint because it was in the Bill. It was a constraint only because that was all the defence expenditure left for the year that could be charged against loan raisings.

I see that in this Bill the same charade is being repeated. A limit of $ 1,600m has been set. Again it is fairly obvious that this figure is simply an estimate of the amount of defence spending available for charging against loans. In a practical sense the inclusion of a cash limit in the Bill achieves nothing at all. The only reason the Government has included the figure in the Bill is to create an impression of responsibility. In doing so it insults the intelligence of us all, and that includes members on the Government side. The Bill is no more and no less open-ended than any of its predecessors.

Let me refer back now to another speech I made in this chamber during the last session. On the debate on amendments to the Audit Act I suggested that the old system of Commonwealth accounting through 3 separate funds, namely, the Consolidated Revenue Fund, the Loan Fund and the Trust Fund, had just about had its day. In fact I hope I went as far as to say on that occasion that this system was long overdue for change. It is the continued existence of the 3 separate funds that makes Bills like this one necessary. This system also requires the keeping of 3 separate sets of accounts and numerous journal entries transferring amounts from one account to another. The wasted man hours must be very great in making these unnecessary accounting entries.

I am surprised that in its search for economies and waste and the elimination of overlap and duplication the Government has not moved to consolidate its accounting. Let me state again what has been said by spokesmen on this side time and time again. We too are against real waste and are looking for efficiency. We believe that those sorts of improvements come from such reports as the Coombs commission report. We do not like the broad brush, blunt methods that have been used far too often- methods such as staff ceilings. We too are looking for efficiency. Here was an example of an efficiency which could be instituted. Such a move might result in some small savings compared with the ruthless slashing of worthwhile programs for Aboriginals and other needy groups. But these savings would hurt nobody. I ask the Minister assisting the Treasurer, who is sitting at the table, to consider this matter. I think that the same Minister was sitting at the table the last time I brought this question before the House. I call on the Treasury to include its own backyard in its further searches for economies.

As I have already mentioned, this Bill is generally regarded as a mere machinery measure. However, the present Treasurer (Mr Lynch), when the Deputy Leader of the Opposition, used the opportunity provided by a Bill such as this one to launch an attack on the Hayden Budget, particularly the deficit and the financing arrangements for that Budget. It could be said that the plethora of arrant economic nonsense the then Opposition attributed to the deficit began at that point. This was when the funny season on deficits calculations commenced. Honourable members opposite were known to project the yearly deficit from the July figures by multiplying by twelve, and multiplying one month’s deficit by twelve is extremely hazardous and stupid. For the benefit of members of the present Government I point out that the same calculation, based on the July 1976 deficit, would produce a yearly deficit figure of at least $7.6 billion. No doubt members opposite have learnt something in the last 12 months and can point to the absurdities of such an exercise. While I am Opposition spokesman on Treasury matters, I have no intention of involving the Labor Opposition in such irresponsible attitudes and irresponsible actions as those which took place this time last year on such matters.

With regard to this year’s projected deficit- I say ‘projected ‘ advisedly for there is no reason to assume that this year’s projection will be any more accurate than last year’s- the Treasurer has left a lot of questions unanswered. On the surface, in 1976-77 the Government will be faced with a domestic deficit of $ 1,879m, about $ 1,000m less than the actual domestic deficit for 1975-76. Is there really a gap as wide as that between the 2 deficits? Let us look more closely at the figures. It appears that in constructing this Budget and in terminating last year’s spending the Government has performed a number of accounting fiddles. Let me instance some of them. Firstly, the Australian Telecommunications

Commission has been asked to borrow $200m on the open capital market rather than receive a Budget allocation for its capital requirements, as it did last year. Secondly, a large repayment of loan funds will be made by the Australian Wool Corporation. Thirdly, Medibank payments amounting to $200m were made last year rather than this year. These are the major items in a number of bookkeeping rearrangements which, when taken account of, suggest that the deficits of 1975-76 and 1976-77 are of the same magnitude rather than $ 1 billion different, as suggested earlier. The whole exercise points up the absurdity of so many of the Liberal and National Country Parties’ statements- I could even call them ignorant utterances- on the subject of the deficit, particularly during the last year.

The Treasurer has never tired of informing the House of the implications of the Budget deficit for the growth in the money supply. I would like him to detail to us at some stage whether his projections of a 10 per cent to 12 per cent growth in the money supply are based upon a domestic deficit of $ 1,800m or whether they take into account the monetary arrangements to which I have just referred. It appears that the Government has been caught in the net of its own propaganda on this deficit subject. I remind the House that deficits in themselves are not evil. Some of the considerations surrounding deficits are: What resources are being used by the expenditure which is giving rise to the deficit? Are they resources which are lying idle or are they resources which are in great demand? How is a particular deficit to be financed? Does it mean an unwisely large increase in the money supply? I repeat my support of the Government in laying down its growth in money supply at a reasonable level. I think in the last financial year it was reasonable, but I will not give in advance the sorts of things I will be saying in my speech on the Budget tomorrow.

I support the laying down of a target for money supply growth. I repeat: Does it mean an unwisely large increase in the money supply? One of the factors about deficits is that in themselves they are not wrong, but they give rise to these questions: Does it mean such a large amount must be raised on the capital market by the public sector that some other valuable capital raising will be crowded out or that interest rates will be forced up? These are the factors, not mindless ignorant suggestions to the effect that deficits in themselves are bad. I am not presenting my speech on the Budget tonight. I am due to make that tomorrow afternoon. When I do I shall refer to the Government’s deficit plans for 1976-77 as well as to its target money growth plans. I shall leave until tomorrow my thoughts on those subjects. It is sufficient for me to conclude on this note: The Labor Opposition is continuing to act responsibly in relation to Bills such as this one and to these matters of financing a deficit in the Consolidated Revenue Fund. This is in sharp contrast to the actions of our political opponents, the Liberal and National Country Parties, when they were in Opposition this time last year. We of the Labor Opposition are not opposing this Bill.


-As the honourable member for Adelaide (Mr Hurford) said, this Bill is essentially a very straightforward measure. I will return in a moment to his plaintive cries about our opposition to the corresponding measure last year. As he said, the purpose of the Bill is to authorise borrowings for defence so that a part of the projected 1976-77 defence expenditure, which would normally be met from the Consolidated Revenue Fund, may instead be met from the Loan Fund. Clause 3 proposes a limit for this purpose of $ 1,600m, about which the honourable member made some play but not to much effect. To the extent that defence spending is financed to that amount from the Loan Fund, it reduces the call on the Consolidated Revenue Fund which otherwise would have had insufficient funds. All this is one part of the necessary borrowing to finance the projected deficit in this Budget of $2,608m. In other words, that is the estimated borrowing requirement of the Government. That term is now prevalent overseas. I expect it is more acceptable to my friend the honourable member for Mackellar (Mr Wentworth) who is not at all keen on the word ‘deficit’, as the House may know. The phrase used overseas is the ‘public sector borrowing requirement’- the PSBR. If we were to use that term I suppose we would have to include the proposed public borrowings of the Australian Telecommunications Commission referred to by the honourable member for Adelaide. They add a further $200m to the effective financing operation. The honourable member referred to that as something of a fiddle. I would say that it is a quite legitimate procedure, with the changed status of the Telecommunications Commission.

I put to the House that a deficit or a borrowing requirement of this order is pushing towards the limits of what is practicable in a context of responsible, counter-inflationary monetary management. There is no net of propaganda or whatever else the honourable member suggested, just the realities of economic life. Last night we were urged by the Leader of the Opposition (Mr E. G. Whitlam) and other Opposition members to provide increased spending in this, that or other directions- that is, to increase total expenditure more than we have done- or to cut taxes even more than we have done. I take this opportunity of reminding honourable members that personal income tax has been effectively cut by no less than $ 1,000m in this Budget. We have been urged to do many things, all of which would have meant increasing expenditure and/or cutting taxes by more than we have. I will not be so dogmatic as to say that there is not room for differences of judgment as to the precise level of total spending in relation to the anticipated receipts as affected by the tax changes which we have made, hence differences of judgment as to the precise size of deficit which would be consistent with a responsible monetary policy. But I repeat- a deficit of the order which we propose is pushing towards the limits of a feasible financing operation.

There are people, apart from members of the Opposition, who would suggest otherwise. Mr P. P. McGuinness is a case in point. In the National Times last Sunday he went so far as to suggest that we might have gone as much as $900m further. This just will not stand up.

Mr Neil:

-Who said that?


– It is interesting that Mr McGuinness, endorsed the target, or at least its upper limit, for the growth of money supply proposed by the Government in this Budget, namely, 12 per cent. As Budget Statement No. 2 puts it, in the context of the forecast growth of money gross domestic product of somewhat less than 16 per cent growth in the money supply of 10 to 12 per cent should be- and I quote- ‘consistent with the objectives of policy namely, to provide sufficient funds to foster sustainable recovery in private sector activity and employment, while exerting some downward pressure on inflation’. Mr McGuinness endorses that. He says:

But, considering the problems of inflation and the need to hold back excessive growth in money supply, 12 per cent seems a reasonable figure.

With the money supply now of the order of $33, 500m, that 12 per cent would mean about $4,000m. Mr McGuinness goes on for his part to project the formation of additional money supply totalling only $3, 100m, and hence his conclusion that the deficit might well have been considerably greater.

Without boring the House with detail, and conscious of the time limit imposed by my Whip,

I would query at least three of the components of Mr McGuinness’s estimates, including his view that there will be an overall balance of payments deficit of $500m in 1976-77. I notice that the Deputy Leader of the Opposition (Mr Uren) is in the chamber. I recall a question he asked this morning. He certainly did not contemplate any such deficit. I do not think it is a very appropriate assumption. There are other inappropriate assertions in Mr McGuinness’s article. So, with this, I believe his confident assertion that there is all this additional leeway, disappears.

In my turn, I do not want to be dogmatic, but what is clear, as I said before, is that the Government has pushed pretty close to the limits of what is responsible monetary management. What this contrasts with is the clear situation of pushing beyond those limits as the previous Administration did- way beyond them, utterly irresponsibly beyond them- in 1975. That is why this corresponding Bill last year was given such a stormy passage. We were determined to oblige the then Government to examine its soul, to appreciate just what it was about and what potential damage it was storing up for the economy.

I conclude by saying that what our approach means is that in approaching the limit, not going far in excess of it as the previous Administration did, there is perhaps some scope for flexibility as the precise position becomes clear as events unfold. Of course, that would be within the context of our unchanging strategy to beat inflation, to provide meaningful, gainful employment for all Australians, and to get the Australian economy moving strongly forward again. I support the Bill.


-The Loan Bill (No. 3) is part of the Government’s overall Budget strategy. I want to concentrate my comments on the money allocated to State housing. The Treasurer (Mr Lynch) in his second reading speech said:

The current estimate of this Consolidated Revenue Fund deficit is $ 1,435m. This is after allowing for the charging to Loan Fund of expenditures totalling $827m on capital grants to the States and payments to the States for housing.

He also stated that there would be an overall Budget deficit for 1976-77 of $2,608m. My comments on housing for the States will be directed particularly to the cutbacks of money for urban and regional development. Let us look at the whole history of moneys paid by the Australian Government to the States for welfare housing. The Commonwealth-State Housing Agreement was instituted by the Chifley Labor Government in 1947. The Loan Council in each year from 1945-46 to 1970-71 agreed to a total works and housing program for each State from which each State nominated the amount it would receive as advances from the Commonwealth Government under successive Commonwealth-State Housing Agreements. These advances were repayable over 53 years, and over most of the period they were provided at concessional rates of interest.

The 1945 Agreement included provision for the Commonwealth Government to contribute three-fifths of any loss incurred in a financial year by the States in connection with the administration of their housing projects. Queensland is the only State at present receiving such contributions. In 1971-72 and 1972-73 there were no specific advances for housing, the States meeting these expenditures from within their ordinary Loan Council borrowing programs in the same way as they met other expenditures. In lieu of the former interest subsidy on housing advances, from 1971-72 the Commonwealth provided specific revenue grants under the States Grants (Housing) Act 1971, which was amended in 1973 to take account of these new arrangements.

In 1972-73 the States were advanced $6.55m under the Housing Assistance Act 1973 specifically for additional rental dwellings to supplement the programs they had undertaken and financed from their normal Loan Council borrowings. These advances were provided at an interest rate of 4 per cent per annum and are repayable over 53 years. Since 1973-74 the Commonwealth, under a new Agreement applying for the 5 years from 1973-74 to 1977-78- this was commenced under a Labor Governmenthas advanced funds to the States for welfare housing outside, and in addition to, Loan Council arrangements. The State Government Loan Council programs since 1 973-74 have been, as a result, lower than they would otherwise have been.

The truth is that welfare housing has been a political football for many years for honourable members opposite. In fact, as I just stated, in 1971-72 and 1972-73, although the previous Commonwealth-State Housing Agreement had finished, there were special arrangements under which money was made available by the then conservative government at 1 per cent below the long term bond rate, particularly in 1971-72. Then in 1972-73, as mentioned, the States were advanced the amount of $6. 55m to provide rent rebates and welfare housing for deserving people. In 1973-74 the new Agreement came into being.

Although the long term bond rate was 7 per cent that year, the McMahon conservative Government charged the full 7 per cent and, apart from that, provided the advance that I have just mentioned. But when the Australian Labor Party came into power there was a substantial increase in the amount of money available. In the last year of the McMahon Government an amount of $ 167m was made available for welfare housing under the CommonwealthState Housing Agreement. In the first year of the Labor Government that amount was increased. In the income year 1973-74 it was increased to $225m. In the following year, 1974-75, $385m was made available. In 1975-76, $364m was made available. In the previous year, 1974-75, an amount of $ 10.4m was made available in June which was to be transferred and spent in the income year 1975-76. So for the income year 1974-75, $375m was to be spent. The following year, 1975-76, another $375m was to be spent.

The Budget for the coming financial year provides an amount of $375m to be spent. In other words, $375m will have been spent on welfare housing this financial year and in each of the last 2 financial years. The difference is that the former Conservative Government charged interest rates of 7 per cent on welfare housing whereas when Labor came to power that interest rate was reduced to 4 per cent. This provided a substantial advantage to people in the low income bracket. The money was made available not only to housing commissions. In New South Wales, Queensland and other States approximately 30 per cent of the money was made available to the terminating building societies. In other words, the money was made available to improve the situation of public or welfare housing which was an extremely short commodity. At that time something like 100 000 people were on the waiting lists for welfare housing. Also, the people covered by the new Agreement- those people earning up to 85 per cent of average weekly earnings- were permitted to place their names on the housing commission lists. Those people who received money through the terminating building societies, through what is called the home builders account, could be earning up to 95 per cent of average weekly earnings and still receive the loan.

Housing is one of the most difficult problems for any government, Labor or conservative, to solve. At least under the Labor Administration people earning up to 95 per cent of average weekly earnings had a chance of receiving a loan or of placing their names on the housing commission lists. For people earning between 95 per cent of average weekly earnings and approximately 135 per cent, the situation was extremely difficult. The callousness and insincerity of the present Government, which said that it is concerned about and that its hean bleeds for those people on housing commission waiting lists, is shown by the fact that it is providing the same amount of money this financial year- S375m- as was made available 2 years ago. In real terms it is practically 30 per cent below the amount that was made available then because in the last 2 years there has been an annual increase in building costs of approximately 15 per cent. Therefore, with the money to be made available this year, approximately one-third fewer homes can be built now than could be built 2 years ago. Instead of making less money available the Government should be making more money available to the States. It should have shown a more generous approach.

Another reason why the Government should be making more money available is that the waiting list numbers have increased from 100 000 when Labor was in power and there are now 108 000 applicants waiting for housing commission homes. In New South Wales the number is 38 834. People are suffering because sufficient money has not been made available. Another reason why more money should be made available for housing is that it would aim to overcome the unemployment situation in the home building sector and in the non-dwelling construction sector. In 2 States, New South Wales and Queensland, there is a great deal of unemployment in the building industry. Yet this Government has restricted and frozen the amount of money to be made available to all States at the level of $375m across the board. That is the same amount of money that was made available 2 years ago. In this area if more money were made available, particularly in New South Wales and Queensland, the Government could stimulate the home building industry, and this would have a cumulative effect. I notice that an attempt has been made to do this in Queensland through the split-up of this year’s allocation. When new homes are built people need floor coverings, curtains, furnishings and white goods such as refrigerators and washing machines. This would provide a real stimulus to employment in the manufacturing industries which are operating at a very low rate. It would create employment in that industry, as it would in the building industry.

In my view that is a positive action that the conservative Government should take. But of course this conservative Government does not want to stimulate the economy. Part of its overall Budget strategy is to squeeze the economy to such an extent as to cause fear amongst the workers. The Government wants to dampen down the economy. It does not want to revive the economy at this stage because it wants to put fear into the minds of the Australian workers. The Government regards inflation as its major problem. In the Budget the Government says that this financial year it will reduce inflation from 13 per cent to 12 per cent. What a remarkable effort! So what is the Government doing as the major part of its overall strategy to try to cut down on inflation? It is squeezing the economy. The fact is that a great many of our economic resources are going unused. The Minister Assisting the Treasurer (Mr Eric Robinson) and the Minister for Defence (Mr Killen) who are both from Queensland know that there is a great deal of unemployment in the home building industry and in the building industry generally. They know there is a necessity for stimulus in the building industry, particularly in the home building industry. The honourable member for Lilley (Mr Kevin Cairns) on many occasions has criticised the Government for not stimulating the home building industry, particularly in New South Wales and Queensland. The Government’s efforts to stimulate the industry in Queensland will help that State to some extent but it does show their priorities when New South Walesthe most disadvantaged State- is deliberately ignored.

A greater amount of money should be made available for such purposes in a Bill such as this, particularly to New South Wales and Queensland, in an effort to stimulate the home building industry and to overcome the problem of unemployment. Interrelated with the home building industry as part of the whole basis of the public sector is, of course, the urban infrastructure. The Government has made brutal cutbacks in expenditure on urban and regional development. The Whitlam Government, which was elected to power in December 1972, had a commitment to overcome the plight facing urban development. In both Sydney and Melbourne it was committed to overcoming the sewerage backlog and the pollution problems. The honourable member for La Trobe (Mr Baillieu) who interjects knows about the pollution and sewerage problems of Melbourne. He knows that there are unsewered areas within his electorate of La Trobe. He knows of the pollution which in fact is filtering into the creeks in his electorate, which in turn empty into Port Phillip Bay and thus create a pollution problem there.

What has happened this year? Last year $34m was made available for a sewerage program in Melbourne. How much is being made available this year? The figure is approximately $17m. That is the extent of the cutback in expenditure. What projects does the Government intend to undertake? The fact is that more and more the urban environment of both Sydney and Melbourne will degenerate, particularly under this Government’s new federalism policy. The Government stands condemned because of its overall Budget strategy of cutting back on public works, which in fact would improve the conditions and working life of the community. The Government stands condemned because it has reduced expenditure on welfare housing and urban and regional development, particularly in Sydney and in Melbourne.

Mr Eric Robinson:

– in replyThe Loan Bill (No. 3) 1976 is a machinery measure. Obviously that is not recognised by the Deputy Leader of the Opposition (Mr Uren), but it was recognised by the honourable member for Adelaide (Mr Hurford).

Mr Uren:

– I rise on a point of order, Mr Deputy Speaker. As you well know, I was speaking within the framework of the Bill. If I had not, you, as an experienced Deputy Speaker in this House, would have called me to order. I suggest that the Minister should not reflect on the Chair but should relate his remarks to the Bill. I am concerned about my rights as a parliamentarian. What the Minister has said is a reflection on me and it is a reflection on the Chair.


-I understand the point of order. I do not yet know what the Minister is going to say.

Mr Eric Robinson:

-I was simply saying that this is basically a machinery Bill. It is a similar type of Loan Bill to that introduced by previous governments, including the previous Labor Administration. The shadow Treasurer, the honourable member for Adelaide, recognised and commented upon the fact that it is a machinery Bill. I was about to say that the Deputy Leader of the Opposition was more concerned about the housing problem and the Government’s housing policy, which of course come within the framework of this Bill because housing is an area which is related to the Loan Fund. However, the comments made by the Deputy Leader of the Opposition could have been made in a debate on housing or, indeed, in the Budget debate. The Deputy Leader of the Opposition commented upon the increased spending in the public sector and the housing policy of the Administration of which he was a part. It is rather regrettable to find, particularly when the nation has judged the Administration of which he was a pan to be such a dismal failure, a former Minister still trying to propose to the nation the son of policies he has espoused. Of all of the departments in which we saw enormous growth, waste and inefficiency under the Labor Administration, I think that of the Deputy Leader of the Opposition was supreme.

The reason we are in trouble in Australia today is the lack of administrative capacity of the previous Administration. If the Deputy Leader of the Opposition wants to remind the nation that he is proud of the record of the previous Administration- it is regrettable that the proceedings of this House are not being broadcast tonight- then so let it be, because the Australian nation judged the record of the Whitlam Administration just a short 8 months ago. The Deputy Leader of the Opposition talks of the housing industry in Queensland. He may be sorry to know that indeed it is on the upturn. He ought to know, if he is informed, that the housing industry is not consistent throughout Australia; it operates at different levels in the various States. Indeed, there is a boom in housing in Western Australia. The Loan Bill makes much reference to housing, which was introduced into the debate by the Deputy Leader of the Opposition. We are again moving towards real liquidity and growth in the housing industry in the State of Queensland.

It is not my desire to talk at length on what I regard as basically a machinery Bill. The House is currently engaged in a debate on the Budget, which gives as many members as possible an opportunity to speak. On behalf of the Treasurer (Mr Lynch) I would simply like to thank those who took part in the debate on this Bill. I listened quite carefully to the comments made by the shadow Treasurer, the honourable member for Adelaide, particularly those comments related to the accountancy procedures of the Government.

Question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 575


Second Reading (Budget Debate) Debate resumed.


– I think the most salient point that has come home to me with regard to the first Opposition speech in the Budget debate is the very poor performance of the socialists. In any Parliament that I have visited I have not heard a socialist party put up such a dismal performance in relation to economic affairs. If we take a line through the speech made by the Leader of the Opposition (Mr E. G. Whitlam)- a totally disinterested performance I do not see any approach to or outline of economic policy being put forward. Let us look at the Budget put forward by the Government. To do this I believe we have to compare the situation in Australia in December 1972 with the situation in December 1975. We see that inflation had risen from 4.5 per cent to 14 per cent; the level of unemployment had risen from 136 000 to 328 000; and the government interest rate had risen from 5.8 per cent to 10 per cent. That is quite a record. This produced the twin problems of inflation and unemployment. It is against this background and the statement on the economy on 20 May that we have to judge the Government’s economic project.

I believe the Government has brought forward some real economic management. The Government has made a real attempt to bring the economy under control, an attempt to bring government spending under control; and an attempt to bring some discipline into the economy, both public and private. In the public area we have had to deal with certain excesses in the Commonwealth Public Service in an attempt to get value for money. A sense of responsibility has been driven home to the States, which have been very guilty in relation to their general housekeeping. Their source of supply has been maintained but any excess projects will have to be funded from their own resources. In the private area wage restraint has been placed high on the list. Management of private enterprise will have to be far more accountable for its actions than it has been. On many occasions very poor management has been glossed over by a reliance on inflation itself. I know of many corporations that have allowed for inflation to carry their stock figures along to allow them to present reasonable figures. This should not be tolerated by the Government. It is something which should be pressed home as one of the great failings within Australia. One of the most popular myths is that

Australia is a well managed nation. This is not so. Very many companies in Australia do not realise what their real responsibilities are.

I should like to touch on 4 items in the Budget which I think are of special merit. Many previous speakers have addressed themselves to the family allowances. This is one of the most significant break-throughs in the area of social reform. Another item which I heard the socialists criticise was the removal of the coal export levy. This, in itself, was a very badly placed tax. It did not take into account the unevenness of coal producers throughout the nation in regard to the type of mine, the length of the mine and the costs of extraction from the mine. If we wish to set out to tax super profits we ought to do so in that form and not in terms of gross tonnages produced, because that has no relativity to the area it covers.

Honourable members opposite also referred to the crude oil levy. This was another marvellous dream. I do not know what the levy was supposed to do, because it wiped out the incentive for exploration, it made the production of oil in this country quite unbalanced and it certainly did nothing to encourage exploration. The announcement that the Government intends to go back to world parity in regard to new finds of oil is very encouraging. I welcome this move. The fourth matter which I felt deserved mention was tax indexation. It was certainly a commendable move. It will stop the tax creep, the socialist stealth. Honorable members might recall the policy speech of the Leader of the Opposition in 1972 when he said that there would be no need to increase taxation rates in Australia to fund the program he was putting forward. Of course there was no need. He proposed to fund his program by an ever-increasing push on inflation which would increase the amount of taxation available to the Government for its spending programs. But even that was not enough.

I make 2 special pleas- first, in regard to the middle income earners and, secondly, the small businessmen. These are the people who have carried the brunt of the 3-year attack by a socialist government. They are the people whose tax burden has risen the most. They are the people who have been hit hardest by tax deductibility. They are the people who have been most penalised by saving in the past in an endeavour to promote their own enterprise and to cater for their own retirement in their later years. I believe that these are the people who support the Liberal principle of life, and I hope that in future Budgets we will be able to do something to alleviate the problems and the great stress that these people have been under in the last few years.

I should like to touch briefly on the consequences of the future of savings in Australia. We have a very great ethic- the savings ethic. Inflation has eroded the position of very many people who put their trust in life assurance and superannuation and in other forms of investment for their retirement. Inflation has prevented them from getting any real value from their investment at current day prices. I hope that in the future, perhaps in the next Budget, we could look at this position to ensure that people get some value and some incentive to save. If we destroy the incentive of the nation to save we destroy the very will of self-incentive, to do something on one’s own. Instead we will fall back to the old concept of support from the governmentsomething which we do not want and should not foster. We should encourage people to get out and look round for themselves.

In passing I point out that there is a need for flexibility in the Government’s approach to economic management in the next 12 months. High levels of under-utilised capacity and subdued consumer spending point to areas in the economy which will need to be kept under review. I hope that consumer confidence will grow with the Government’s efforts to bring inflation under control. Once it is brought under control there is every reason to suspect that consumers will come forward with their very large amounts of savings. However, if unemployment rises to unacceptable levels, this confidence will be broken and a very great tragedy will befront us all.

I thought I might also deal with one of the unsung heroes oi the last 3 years- the Reserve Bank of Australia. The Bank acts in coordination with the Commonwealth Treasury in the management of monetary policy in Australia. When we consider that we had a government which was not game in lots of cases to act in a fiscal sense but was prepared to push its responsibilities across to the monetary authorities, we have to applaud the actions of the Reserve Bank in successfully managing to overcome the many crises that confronted it. I shall just quote briefly from this year’s annual report of the Reserve Bank:

The Australian economy has been tightened and strengthened since the unprecedented developments or 1974. In the twelve months to December 1974, average weekly earnings rose by 28 per cent, consumer prices by 16 per cent, and so real wages by some 10 per cent- cramming into twelve months the normal trend growth of real wages accruing in about three years; and this in a year in which average productivity fell as output contracted. Commonwealth Government outlays were expanded (46 per cent on the previous year) and tax rates reduced, so that in the last quarter of 1974-75 the deficit . . . was running at an annual rate of nearly SS billion. Business profits fell away very sharply in the course of 1974, and the number of registered unemployed trebled in the second half of the year. The story of economic management in 1975-76 by the Commonwealth Government and by the Reserve Bank, is essentially the story of measures to redress imbalances and to return the Australian economic framework to a condition from which it could resume normal growth and development.

That is not bad for the Reserve Bank. Mr R. J. Hawke is a member of the Board. The normal practice is for all directors to sign the report. I hope he signed it with all the feeling and foresight that would have gone with the report.

The powers of the Reserve Bank are considerable. First it has the power to regulate trading bank liquidity by means of the statutory reserve deposit and the liquids and government security reserves convention; secondly, the supervision and limitation of savings bank assets portfolios; thirdly, controls over bank lending as to both volume and general direction; fourthly, bank interest rate policy; fifthly, the capacity to engage in open market transactions in financial assets and thereby to influence not only bank liquidity but money market conditions generally. Those powers are wide ranging and have the effect of controlling the entire monetary scene within Australia.

Because of that, tonight I wish to address one or two comments to the operations of the Reserve Bank in the open market. It is a very complex area and not one for Sunday morning reading. It is something which I believe should be spoken of because its performance in this area in the last 3 years has been outstanding, I believe. It has dealt in 3 principal securities- Commonwealth bonds, treasury notes and commercial bills. By far the greatest and most consistent security held is that of Commonwealth bonds. They are the ones which both superannuation funds and life societies are compulsorily forced to hold under the 30/20 rule. There are also other captive holders. I should like to mention them briefly. The savings banks in Australia hold 15 per cent of those on issue; 20 per cent is held by the trading banks; 15 per cent is held by the life and superannuation funds; and 13 per cent is held by the government trust. Acting around this holding is the official money market of Australia. There are 9 dealers within the market. The market itself has not holdings of a very considerable size at any particular moment- about $800m. It is in the movement of funds within this market that the real significance lies. In one year alone $ 10,000m changes hands in terms of volume.

I should like to refer to some of the movements in the money market which reflect the goings-on in the Australian economy. There has been a big shift from what is called short end bonds- the short dated bonds- to the long dated bonds. This reflects, in itself, the confidence of the money market in the next two to three years of interest rates and, therefore, confidence in the economy. Because of this, we have seen a very big move out of the short dated bonds. Some $2 12m has changed hands from 8 July to date in one-year securities and more than $ 100m in 2-year securities. This has enforced the enormous success of the July loan which raised $725m. Of this, $409m- or 56 per cent- was raised from the nonbank area. This indicates the amount of money that is going into the area which has confidence in the future and the interest rate structure.

I just make passing reference here to the forthcoming Telecom loan. I regret that the Minister for Post and Telecommunications (Mr Eric Robinson) has just left the chamber. Undoubtedly, it will be a success. Any Government security, which I note will be fully endorsed by the Federal Government, which has called for subscriptions at .41 per cent over the Commonwealth rate must in itself be a success. I have no doubt that the Minister can look forward to that. Treasury notes were a new instrument introduced by the Reserve Bank in 1967. They were, in themselves, of little use until fairly recent times. They are issued in 2 forms- 13-week and 26-week. They are sold at a discount to the market. To appreciate the size of this, one has to refer back to July 1975 when at the height of the reversal- at that time the Government had reversed its money squeeze to a money avalanche- the high of that particular holding was about $2.2 billion. At 31 March 1976 it was still $1.3 billion. Yet today this has fallen to $204m- a massive change in the money forces within Australia. What is the significance? Any movement of that size, which is just short of the size of the deficit in the current Budget, has to be reasoned.

Clearly the main factor behind it is the changing forces in interest rates. Interest rates at the short end are going up and at the long end are coming down. Because of this we see a consequential gap developing between what is termed the treasury bill rate, the commercial bill rate and the bank rate. This has reached 2’/i per cent. I should like to make one suggestion to the monetary authorities: that instead of the current procedure whereby treasury notes are issued to any institution which cares to turn up in any quantity at any time the Reserve Bank would offer treasury notes, on a weekly basis only, to a specific quantity. This would ensure that those who deal in the market would have to tender for these particular issues. This, in itself, would force the market to understand and set a prime short term interest rate. This, at the same time, would prevent the Reserve Bank from being placed in the embarrassing position- as it is at the present moment- that it could be in terms of interest rates paid on treasury notes. I suggest that the Australian capital market would be much stronger and much better if it were allowed some flexibility to set its own interest rates and pricing of these particular treasury notes.

I should like to deal with the use of commercial bills in April-May this year when there was a very severe potential credit squeeze because of the incidence of both corporate tax and personal tax, and to one rather strange setting out of the taxation account the Reserve Bank moved in to buy bank endorsed commercial bills. It had not done this in any significant degree before. Its first operation in this area was in 1974. In April-May of this year the Reserve Bank had to find about $480m of the commercial bills or nearly 50 per cent of those on offer. I point this out purely because I think people ought to understand the enormous job that the Reserve Bank has carried out in the monetary area. It has been under great stress on occasions, knowing full well that Government policy was misdirected. The Reserve Bank has had to pick up the mess and put everything back together again. I congratulate it. Its actions in the market have been well judged and the job has been well done. I conclude by saying that it is a great pleasure to support the Budget. I look forward to the debate in this place tomorrow to hear what the socialist answer might be to a private enterprise approach.

Mr FitzPATRICK (Darling) (9.17)-The honourable member for Ryan (Mr Moore) spoke about the high inflation rate and the large number of unemployed during the period of the Labor Government. He forgot to mention that there was an economic depression in the rest of the world during that period and that other countries also had high unemployment and high inflation rates. The renowned economist, J. K. Galbraith, has drawn attention to the fact that a small country cannot escape those things when they are happening in the larger parts of the world. The honourable member also neglected to say that that economic depression has now lifted in the rest of the world but due to the policies of this Liberal-National Country Party Government Australia is still in the midst of a depression and we still have a high inflation rate and a large number of unemployed.

On Tuesday evening, 17 August, with the organised support of a rowdy group of regimented members of the Liberal and Country Parties, the Treasurer (Mr Lynch) made a statement in this House. Citizens from all corners of this great nation were awaiting and expecting such a Budget as we had been promised to be brought down. The people expected a Budget that would clearly indicate the strategy and point the way for Australia to take part and share in the world’s economic return to a fairly rapid economic growth as indicated in The Australian on 17 August 1976. Most Australians were hoping that a Budget would be brought down that would in some way dim the memory of the blot on the history of our democratic way of life- a Budget that would in some way justify the sacking of a duly elected government. Many hundreds of thousands of those Australian citizens who were waiting for this Budget were already victims of the broken promises of the LiberalCountry Party Government. They had lost their jobs and they were receiving social security benefits. Speaker after speaker in this Parliament from the Government side had called them dole bludgers. Many thousands more were working in the shipyards in Whyalla and Newcastle and in other places which support the ship building industry directly and indirectly. They were waiting for some sign or some indication that this Government cared about what would happen to their jobs, to their homes and to their families. Many thousands of school leavers- 180 000 to be exact- were waiting for some indication that jobs would be available to them when they completed their schooling. Thousands of Aborigines who had been employed on special working projects, many of which had already been suspended when this Liberal-Country Party Government came to power, were waiting for some indication that this Government cared for them. Also waiting were many people in the fruit-growing areas who were gradually feeling the credit squeeze which was forcing them off their properties after many long years of hard work. In New South Wales 1568 apprentices who were unemployed were waiting for some indication that this Government cared for them. Many thousands of people in the building industry were looking to find some indication in this so-called Budget- this statement by the Treasurer on 17 August- that there was something in it for them.

What did all these people get out of the Budget from the statement made by the Treasurer- or for that matter what did the great majority of Australians get out of it? I will tell honourable member’s what they got: All they got from this House on that night was the organised rowdyism of Government supporters. The average citizen knows that this is not a Budget because it does nothing that a Budget should do. It is seen by the average Australian as a prescription for disaster. It is seen by the worker and by the craftsman or professional man as a blueprint for industrial unrest, causing a reduction in real wages, giving less spending power and causing greater unemployment. Never before has so much been taken away from the under-privileged section of the community and given to the privileged section. All this is because someone had convinced the Prime Minister (Mr Malcolm Fraser) and the Treasurer (Mr Lynch) that any crime committed against decent Australians is justified so long as it can be claimed that it has been done to cure inflation.

The Treasurer never mentioned the many problems I have spoken about this evening. The first 7 pages of his speech were meant to convince the public that profits are good and wages are bad; that unemployment and other things do not matter. So long as inflation is controlled no price is too high to pay. But, of course, the Treasurer went beyond the first 7 pages. He gave a clear indication of what section of the Australian community he intended should pay the price. While the big companies are getting all kinds of handouts, the under-privileged are asked to accept the vague promise that at some future time the larger companies which have been given this handout will reinvest their money in some place to produce some future jobs.

Where does the Treasurer’s statement map out a train of events that will reduce unemployment? He made no attempt to set a strategy for sound economic financial management that will benefit the great majority of the Australian people. Where are the elements that are estimated to give growth and progress to this country in this period of record unemployment? The Government has not been able to produce one national project that will in any way assist in relieving unemployment. Opposition members know plenty of areas that have been cut back, and so do members on the Government benches. The Treasurer has diverted more and more resources away from those bordering on the poverty line and those already suffering hardship. These resources are drawn to big business in the vague hope that they will be reinvested in areas to create job opportunities. This is the great package deal that we have heard the Government members harp about time and time again.

Jobs are sacrificed in all directions but there is not one clear indication of where re-employment is likely to take place. While all this is going on the Government is looking to the trade union movement for co-operation. The Government is asking for wage restraint. It says: ‘Accept less than full wage indexation’, yet prices are rising. What a strange way to ask for co-operation. The day after the Treasurer’s statement, the Minister for Transport (Mr Nixon) gave some indication in this House of what kind of co-operation the Government was talking about. He read item after item of industrial disputes, including those of only one-and-a-half to 2 hours duration.

Of course there are too many strikes in Australia but what causes the strikes? Does the Government ever look at the management side? When have we heard anyone from the Government say that management causes a strike? It is always the workers who are blamed. They like doing away with their wages, according to the Government. The only time I have heard Government supporters criticise management is when it puts a few more shillings in the workers’ wage packets. A good instance was when management helped workers to pay the iniquitous Medibank levy. I do not know what caused all the strikes to which the Minister referred. I do not doubt that there were some stirrers on both sides- the management and the unions- and I do not doubt that we have a few stirrers in this House.

The Minister was careful to make sure that he did not give us too much information, but I think each one of us knows what will cause the greatest industrial unrest in this country- the statement which was made by the Treasurer on 1 7 August. What a great package deal it was: Jobs sacrificed in all directions and handouts given to big companies who may or may not reinvest in job producing areas. There will be no jobs for university students who are expected to show their love for the Governor-General when they meet him on campus. Wage restraint is asked for. There will be less disposable income, less consumer spending and greater unemployment. No selfrespecting trade union official could hold his head up if he were to recommend that unionists accept this kind of package deal. The Prime Minister can ask for these things. He can ask the unionists to accept lower wages and he can ask for higher consumer spending, because none of these things affect him. He is immune from the lot of them. It would not matter what change took place, it would not affect the Prime Minister. Instead of racing down the road of direct and deliberate confrontation with the trade union movement the Prime Minister should call together the unions, management and the Government and put the cards on the table. If there is to be some reallocation of resources for the good of this country the unions- the workers- - would co-operate. They have always done so because they are the first ones to suffer. Management should indicate when and where this reinvestment will take place, when these extra jobs will be available. This is the only way in which a package deal can be negotiated. No selfrespecting trade unionist could go along with anything less. When this is done we can talk about cooperation and really mean it.

I want to mention assistance to the mining industry. I believe that some form of assistance is overdue. But I cannot understand why assistance that will cause a mining boom in 1978 was given at this time when many mine workers are already being thrown out of work. Many of them have to leave their homes and find work somewhere else. I am particularly conscious of the position in Broken Hill. I believe the tax and royalties paid by the Broken Hill mining companies are possibly the highest in the world; if not the highest, they are certainly among the highest, many times greater than the rates paid by other Australian producers. Royalties absorb 50 per cent of the profits before tax when the profits are in excess of $9.2m. Through inflation these burdens are becoming increasingly severe. Broken Hill mine royalties are assessed on the following basis: Four per cent on the first $400,000 of profit increased by 2 per cent for each additional $400,000 to a maximum royalty of 50 per cent on profits in excess of $9.2m. The royalties scale has not changed since 1925, and inflation increases the percentage of the royalties paid.

To give honourable members some idea of the distribution of the Broken Hill mine profits, the New South Wales Government takes up to 50 per cent in mining royalties and the Australian Government takes a minimum of 21.25 per cent in income tax. This leaves the companies with 28.75 per cent to pay out dividends, continue operations, provide working capital for exploration and development and for replacement capital, meet long term liabilities to employees such as severance pay, long service leave and holidays, and for expansion. The combined imposts of tax and royalties are excessive and add up to 71.25 per cent of profits. The future viability of Broken Hill and its mining companies requires a continuing investment. The combined impact of royalty and tax discourages this investment. The maximum extraction of minerals is not encouraged. I point out that the lode varies. There is a line of lode which has good ore, medium grade ore, break even ore and then a large body of what is called ‘under break even ore’. The more of this ore that is left in the ground, the shorter the life of the City of Broken Hill.

In 1975 the Broken Hill mining companies paid royalties of $27,491,000. They paid tax of $15,121,000, municipal rates of $1,127,000 and a water deficit of $996,000-a total of $44,736,000. Surely it is not too much to ask, when all this money has been paid into the coffers of both the State and Federal governments, that some assistance be given to Broken Hill mining companies. We are already suffering retrenchments at the South mine. I ask the Government to consider putting some finance into this area to keep the City of Broken Hill buoyant. The Government should allow losses in a financial year to be offset against past or future profits. There should be a provision for earnings to be carried forward 5 years or to go back 3 years when operations terminate because at the termination of a mine’s operation- as with the South mine now- the longer it takes the mine to close down the more it costs because of severance pay, long service leave and such things. These payments are tax deductible only when they are paid out and if there is no profit earned from the mine the payments can cause a loss which can make the mine close down for longer. I ask the Government to give some consideration to this aspect and also some assistance to the Cobar mine.

The Fraser Government has broken many of its promises. It has caused growing anxiety and disillusionment in the community. The Treasurer’s statement will hold back economic recovery and will destroy many of the best and most popular reforms introduced by the Labor Government. There is division in every section of our community. The States are in revolt. I believe this Budget is no way to provide the opportunity for Australians to share in this world ‘s economic recovery. For this reason I support the amendment moved by the Leader of the Opposition (Mr E.G. Whitlam).


-I rise in this debate to support the Budget. I do so with a great deal of pleasure. I am surprised that the honourable member for Darling (Mr FitzPatrick) did not do so as well. He introduced some criticism of mining companies and large business interests but in the last 10 minutes of his speech we heard him commending the mining companies of Broken Hill and suggesting that they in particular need support by way of reduced royalties and the like to save jobs in his own locality. He highlighted the very concern that many honourable members feel in their own electorates about the need for business and business interests to be stimulated to provide employment. He also demonstrated by the way in which he commented on employment and on business activity the essential relationship between successful business, successful freedom of enterprise in Australia and an improvement in the disastrous levels of unemployment that we have and which were brought about by honourable members opposite. The honourable members to whom I am directing my comments sat in the Government that brought about that disastrous level of unemployment. I did not hear their voices raised in criticism of their own. I did not hear the pious criticism that we hear now. We did not see the unions coming out as they are now and saying the unemployment is disastrous, as they are in my own area. I wish them well in their endeavours, but they now are coming out and saying: ‘We are now concerned about unemployment. Who is going to find jobs for these people who are unemployed?’ Where were they before December last year? They were hiding in the woodwork. They were not prepared to come out. This is the Budget that is going to bring about economic revival in Australia. Yet here they are trying to talk it down. I am glad to say that there are so few of them that we probably will not have to hear very much of this kind of talk. As a boy I thought the old adage of a doting mother admiring her son in uniform and saying, ‘There is my boy, the only one in step’, applied to me. I now know that that accolade is better worn by the Whitlam Labor Opposition. The Opposition is clinging to very out-dated policies.

Mr Bryant:

– Oh, go on.


– Yes, clinging to a view that increased government expenditure would help us in this situation. Members of the Opposition are out of touch with the rest of the world. Of all the developed countries the United Kingdom has probably had problems very similar to our own and all the disastrous trends that we have experienced have been demonstrated in that nation. These problems are likely and were likely to cause that country tremendous problems.

The present British Government is a socialist government. But in Britain certain steps designed to assist in stimulating economic activity have been taken. As the Economist records, f stg500m has been cut off the social welfare budget. That is a very significant figure. This was done by a tax fiddle which altered the period used to calculate inflation and by doing so a term with a lower rate of inflation was fortuitously chosen on which to index social service benefits. This brought about a marked decrease in social welfare expenditure. In the 1976-77 Budget £stg70m was cut off hospital expenditure; £stg146m off housing expenditure by increased charges; £stg30m off education expenditure, including universities; f £stg175 off capital expenditure by government owned industries; and £stg100m off defence. In the following year it is foreshadowed that f stg 1012m will be lopped off government expenditure programs in Great Britain. These are the activities of a socialist government, a government very similar to the government which would be formed by honourable members sitting opposite.

Dr Klugman:

– Would you vote for it?


-I would vote for the policies of the Government in the United Kingdom because it is trying to solve the same problems as we have in Australia. We have not had to make the cuts in government expenditure that have had to be made in the United Kingdom. We have not made cuts in the social welfare area. We have not made cuts in the education area. In fact expenditure is increasing in real terms in that area. If honourable members opposite are prepared to study the situation in the United States, Germany, Canada and Japan they will see that the growth of government expenditure was shown substantially to decrease in those countries in varying degrees. This is very contrary to the view that was put by the Leader of the Opposition (Mr E. G. Whitlam) last night and I refer honourable members to page 499 of Hansard if they want to check on that fact.

Honourable members opposite and their Leader are prepared irresponsibly to ignore the world trends and the world situation, the fact that there is a need to limit the growth of government expenditure if governments are to be able to control inflation effectively. I wish to refer to an article which appeared on 1 1 May in Feature, a publication which all of us receive. The article detailed agreement reached between the British Government and the Trades Union Congress for an increase in average wages and salaries of about 4.5 per cent for 12 months. This figure is well below Great Britain’s expected rate of inflation. I wish to quote from Feature because I think what this publication had to say is relevant. The article stated: ‘This is the best news for many a long day for Britain and for sterling and, I believe, for the people whom we represent.’ With these words, Mr Len Murray, general secretary of the Trades Union Congress, Britain’s principal trade union body, ushered in the second chapter of Britain’s voluntary incomes policy.

This is a very significant policy in which the Trades Union Congress agreed to accept a 4.5 per cent growth in wages and salaries. A news release which we received from the British High Commission stated:

Evidence of the continuing recovery in British manufacturing industry is provided by the latest monthly survey of industrial trends by the Confederation of British Industry.

It is clear that by cutting government expenditure by the agreement reached on wages the situation in Britain is improving. In fact in comparisons of wage costs, productivity and so on one word describes the totality of excess rises, and that word is ‘inflation’. In a speech by a noted commentator in 1975 under the heading ‘Does Inflation Matter?’ the following observations were made:

Occasionally we hear that inflation does not matter much. Money incomes rise to preserve purchasing power and the Government can adjust social welfare payments to protect lower income earners, pensioners and so on. Efforts to prevent inflation, this view holds, involve unwarranted sacrifices- perhaps in respect of government programs foregone in the interests of demand management, perhaps more generally in terms of risks to growth and employment.

That view may be acceptable at 3 per cent inflation but it is quite untenable at 13-14 per cent. Rapid and continuing inflation has serious effects on the way the economy functions and on the social fabric generally. Inflation at 13 per cent per annum would cut the purchasing power of the dollar to 69c in three years time and more than halve it by 1 980. By 2000 it would be down to 4c. A child born today will be buying his first home around the turn of the century- at 13 per cent inflation a modest house costing $20,000 today would cost close to half a million dollars. An ordinary postage stamp would cost $ 1 .70.

I could go on but the point is clear no economy, no society, can cope with that sort of change, even for a few years, without very severe side-effects. No responsible government will allow this sort of situation to emerge. It is for this fundamental reason that inflation in Australia will not be allowed to continue at anything like its present rate.

Those comments were made in May 1974 by a former Treasurer, Mr Crean, the honourable member for Melbourne Ports. They were made by a responsible gentleman, a man who felt about these matters keenly and a man who lost his position and lost the respect of his colleagues. I believe that his words demonstrate the sort of havoc that is likely to emerge if honourable members opposite continue to advocate irresponsibly increased government expenditure.

I would like to also quote a non-parliamentary critic who speaks with a forked tongue and who has criticised this Budget in public forums. He holds a responsible position as a member of the Reserve Bank Board and had this to say:

A firm continuation of the thrust of policy against inflation continues to be necessary to sustain the tentatively emerging indications of economic improvement For the community to countenance the persistence of inflation would be to hinder the growth of economic activity and prejudice national living standards.

AH honourable members know from the number of times this matter has been referred to that Mr Hawke is a member of the board of the Reserve Bank. He is also president of the Australian Labor Party and president of the Australian Council of Trade Unions. That gentleman made those statements as a member of the Reserve Bank Board. But he makes different statements when he goes out on to the public forum. I believe that the Whitlam-led Opposition in trying to talk down economic recovery is the most irresponsible of all the critics. Members of the Opposition have spoken about unemployment in an attempt to intimidate people in jobs and thereby limit consumer recovery. They incite employees to strike, to withdraw their labour and to undermine productivity. They allege that irresponsible government spending which brought about the demise of their own Government can now be responsibly pursued. There is no doubt that extravagant wage demands, unbridled government expenditure in non productive areas, continued industrial action and sabotage will handicap this Government and any government. Frankly, in my view this is a sinister use of the special position members occupy in this Parliament. I believe that all this negative and disruptive talk by the Opposition must be pointed out with the utmost clarity.

Let us examine some of the other important issues. Firstly, let me talk about excessive government expenditure. From the speech of the Leader of the Opposition, through the calls of his colleagues, one thing is clear. Labor parliamentarians lack the ability to make choices; they cannot accord priorities; everything that government can do successfully must be done overnight. One has to look only at the emphasis in the speech of the Leader of the Opposition last night to see this demonstrated. He spoke of growth centres, social security, women, health, migrants, farmers, defence, urban and regional development. They are not areas in which government programs have been necessarily decimated, but they are areas in which Labor asks us to spend more. My experience is that in every area of government more money can be spent. I have a long list. It includes a government centre in Parramatta, National Estate programs, overseas aid, area improvement. Responsibly, I do not believe I can ask for more. I am surprised that members opposite can do so. They are the choices that Labor in office could not make and in opposition is still unwilling to make. The spendthrift has a social conscience, but he is not a responsible parliamentarian when he advocates those courses. The United Kingdom experience has shown the importance, I believe, of reining in government expenditure.

Wage costs and productivity are of national importance. Our labour costs have approached the highest in the world. Our competitors in manufacturing industries are achieving a significant reduction in the rate of wage increases in their homelands. Wage indexation, as implemented by the Full Bench of the Australian Conciliation and Arbitration Commission, achieves in part the objectives agreed to by unions and government in the United Kingdom. The free-wheeling and collective bargaining that the ACTU is now seeking to bring in outside the wage-fixing system will certainly further undermine our national productivity capacity. During the recess I became very much aware of the inability of export manufacturing business in my electorate of Parramatta to compete on world markets. The unholy alliance between local manufacturers who can seek additional tariff protection and unions who want to use such protection for unreasonable wage demands is significant. It ignores the plight of those employees and manufacturers who have no tariff support available. Obviously the only long term solution is to contain costs and to restore productivity. We are not only losing to labour intensive countries but we are also losing our markets in Australia to the United States, New Zealand and Europe, each of which country suffers a transport cost before being able to land its product on our shores.

Productivity is sabotaged most effectively, in my view, by the publicity seekers, the union anarchists. Take Mr Baird, an organiser for the Amalgamated Metal Workers Union in the shipbuilding industry, who told us today that a strike was needed to draw attention to the plight of his industry. If it were not so tragic, one would laugh. I find such comments and that attitude sinister. Quite frankly, the shipbuilding industry, in my view, has been undermined by this technique. I would be more impressed by the representative of the AMWU if he arranged a work-in. I suggested to some teachers in my electorate not so long ago that I would be impressed if they arranged a teach-in. It would have been rather easy and would have gained far more publicity for those who were prepared to do it, if that was their objective If I wanted to improve the conditions of people in my industry I think I would invite members to work a little longer, a little harder, perhaps sit in their offices until 2 a.m. or 3 a.m. and ask some of the gentlemen of the Press to join us. I think that would demonstrate our concern and our desire to improve our national productivity far more than a strike. This is not a laughing matter. I speak with great sincerity. I wrote to teachers in my electorate not so long ago. They said that they intended to strike because the seats in the grounds were rotting. I said: ‘How about a teach-in? Write to the parents and invite them to leave the children there till 6 p.m. so you can give them a bit more tuition. Everybody will be attracted to your cause and everybody will be on side’. Certainly it would have increased productivity capacity.

I now point out the major thrust in the Budget. It demonstrates that this Party has a social conscience. Many honourable members have detailed the long list- family allowances, personal income tax indexation, handicapped persons’ allowances, the new test for pension eligibility, the experiment with a new housing allowance voucher system, the expansion of health programs, community health, hospitals and so on. Education expenditure is up in real terms. Much has been said about the activity in the business area. I would like to make some points about the alleged handouts to big business. There are only 3 principal factors in the Budget which in any way assist business, and they are: inflation accounting for stock, eased distribution requirements for private companies and reforms in the petroleum and coal industries. Inflation accounting for stock has been introduced after we have already introduced indexation for personal income tax and after we have already indexed pensions. We are saying that after we have indexed almost everything else we are prepared to index this essential part of business activity which undermines its very essence. Honourable members should refer to the Mathews Committee report and to the Sondilands committee of inquiry in the United Kingdom which demonstrate those matters. The eased distribution requirements for private companies assist only small companies, but they assist those companies to use for capital generation money which they have already earned. By reducing by 10 per cent the amount which companies must distribute we have allowed for capital expansion. Businesses will be able to succeed and to resist takeover by public companies and multi-national companies that we so often hear criticised. The reforms in the petroleum and coal industries are only the removal of levies on top of other taxes which have been shown to undermine their position in business, to enable companies to continue production.

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


– I was interested to hear the honourable member for Parramatta (Mr Ruddock) state that he had not made and did not feel that he should make requests for expenditure on matters such as a government centre at Parramatta, the National Estate and other benefits for his area. From reading the local Press, one would get a different impression. I am glad he has now officially confirmed in this House that he does not try to get extra money for his area and that he has no intention of doing so. I agree with the honourable member for Melbourne Ports (Mr Crean) that the Budget is not all important, that economic control and monitoring should be continuous, that it is ridiculous to decide to do it all in one sweep. The Budget gives the Treasury and the Treasurer a moment of glory. With all that ego at stake, there is obviously no end in sight for Budget night. Was it not a boring evening, a speech containing about one-third factual information from Phillip Lynch? It must be the first time that there has been so much factual information in any speech by the Treasurer. I much prefer it when he tosses the jargon and platitudes. How much more enjoyable it is to hear his gems. What a thrill it must have been for the businessmen at the Sydney Opera House on 19 August to hear him reach a climax and to conclude his speech by saying:

We have put free enterprise on a sound batting wicket. It is now up to business to put the runs on the board.

What a brilliant statement, what a brilliant speech on his part! Many Government members have repeatedly emphasised in the Budget debate that, on the one hand, the Government is spending more money; on the other hand, the Government is collecting less money; thirdly, the deficit is shrinking. They must think that the people are stupid. I do not suppose the honourable member for La Trobe (Mr Baillieu) has the highest IQ, even on the Government benches, but when he spoke this afternoon I was not sure whether he was too unintelligent to see what was happening or whether he was trying to pull the wool over people’s eyes. I am afraid that he is too unintelligent to see what is happening. The Government stated during the election campaign, and the Treasurer stated again in his Budget Speech, as reported on page 1 3 of Hansard of 17 August, that money is best in people’s pockets and that people should make their own decisions on how the money should be spent. Broadly speaking, this is probably one of the main reasons that the Liberal and National Country Parties are in government. They were able to criticise the Labor Government, I do not think justifiably but reasonably, and to convince the people that they were paying too much in taxation and that it would be better to keep the money in the people ‘s pockets.

The Treasurer in his Budget Speech said that the Government believes that Australians should have more scope to decide what they want in the context of having the money for themselves to spend. Let us look at the Treasurer’s speech. What has the Budget in fact brought about? Page 143 of Hansard of Tuesday, 17 August, sets out the estimates of receipts. They show an increase over 1975-76 of $ 1,755m in net payasyouearn tax receipts from people on wages and salaries. There is to be a 24.7 per cent increase in tax collected by the Australian Government from those people. This compares with an increase of less than $ 1,000m in 1975-76. When the Australian Labor Party was in Government the then Opposition accused it of increasing taxation far too quickly. I am sure the people believed that those in Opposition then were right, but how hostile will they get when they realise that between now and the end of this year the Government will be almost doubling the rate of increase in taxation? Even Peter Samuel, who hardly ever criticises the Government, takes the same line as I do at present in an article in today’s Bulletin, a very pro-Government publication. Let me repeat the figures. The net increase in pay-as-you-earn taxation this year will be $ 1,755m, an increase of 24.7 per cent. This compares with an increase of $332m, or 1 5. 1 per cent, in taxation receipts from other individuals, self-employed individuals. It is quite clear that the wage and salary earner will be bearing the main burden of the extra taxation. His tax is going up by 24.7 per cent; the selfemployed individual faces an increase of only- I put ‘only’ in inverted commas- 15.1 per cent in tax.

How can the Government expect there to be an increase in consumption by the people if in fact it is leaving them with less money? In addition to withdrawing all that extra money in taxation, the Government is withdrawing extra money for Medibank. The amounts I have given include $2 50m for Medibank, to be paid by those expected to remain in the scheme and to pay the 2.5 per cent levy on income. But it does not include all the other payments to be extracted from people’s pockets, beginning on 1 October 1976, for additional health cover in its various forms, whether additional intermediate cover under Medibank or complete cover outside

Medibank. Some extra hundreds of millions of dollars will be withdrawn from consumption.

Mr Shipton:

– Tell us about tax indexation.


– This is after tax indexation. Hopefully the honourable member for Higgins is not one of those with the IQ of the honourable member for La Trobe.

Mr Shipton:

– I challenge your mathematics.


– I invite the honourable member to look at page 143 of Hansard of 17 August. It shows a huge increase in the amount of money to be withdrawn from people’s pockets. Last Tuesday night the Treasurer was able to get across a message of confidence telling us how there would be an increase in consumption because he said so. I think the honourable member for Melbourne Ports referred to this point this afternoon when he talked about the longevity of confidence. Let us look at how long the confidence exhibited by the Treasurer lasted. Admittedly, on Wednesday of last week there was a big improvement in share prices. There was a significant jump in share prices, but how long did all this confidence last? In yesterday’s Sydney Morning Herald the headline in the finance and business section states: ‘Index back to pre-Budget levels again’. The ensuing article states:

Another widespread price slide on the Sydney Exchange yesterday brought the market back to pre-Budget levels, with the all-ordinaries index down 4.83 points to 316.05 points.

It has dropped further since then. Let us look at what that strongly biased, pro-Labor paper, the Australian, said on Monday, 23 August, in an article written by Mr Russell Barton. We all know that Mr Murdoch does not interfere with the politics of that newspaper, but until last Monday the Australian was supporting the Budget. I will quote at length from the comments 2 days ago by Russell Barton, which is probably a pseudonym for Rupert Murdoch. Under the headline ‘The Budget’s disappointment’ the newspaper states:

Now that the dust has settled after Mr Lynch ‘s first Budget speech it is appropriate to examine some of the disappointments, and the figures behind it.

The two greatest letdowns of the 1976 Budget were the absence of any direct stimulation to consumer spending and, on the company side, the deferral of the 50 per cent stock valuation adjustment for a further 12 months.

Apart from pension increases, which cannot be expected to spark an upturn in consumer activity, there was nothing to lever individuals’ money from the savings banks and building societies.

Many businessmen were hoping that the Fraser Government would be brave enough to make a real attack on inflationparticularly in view of all the drum-beating which has come from Canberra on the subject- and slice, the top off sales and excise taxes.

Sydney-based corporate consultants David Block and Associates have estimated that a 10 per cent cut in total sales and excise taxes would have cost the Government $400m in the current year- raising the total projected deficit from $2600m to $3000m.

If the Government had been able to overcome its obsession with the deficit figure such a cut would have returned much more in terms of economic revival, on two fronts.

It would have had a significant impact on the consumer price index and provided real stimulus to consumer spending in both physical and psychological senses.

Surely honourable members opposite would broadly agree with this criticism of the Budget.

Mr Shipton:

– Are you taking the Murdoch line?


– I did in 1972. The newspaper article goes on:

But good as tax indexation may be it will not halt the steady expansion of the personal tax base. As a proportion of total tax revenue, personal income tax has risen from 47.5 per cent in 1972 to 54.7 per cent in 1976. And the estimate for the 1977 financial year -

That is the first year the new Government is controlling- is 56.7 percent.

That is an increase of another 2 per cent. This is from a Government that talks about leaving money in the people’s pockets and letting them decide for themselves how to spend it. What an interesting point.

Mr Shipton:

– Tell us about the family allowances.


-I will in a minute. I have the material ready. Mr Russell Barton goes on to say:

As the current year progresses companies are likely to find that the promises of recovery held in the initial reading of the Budget are mirages.

Without a solid upturn in consumer demand, which has not been attended to in this Budget, they will begin to realise just how long it is until 1978, when they will receive some benefit from the stock valuation adjustment.

This is from Rupert Murdoch’s newspaper, the Australian, on Monday. On top of that, to interfere with consumer spending we have had a withdrawal of tax exemptions. In a few minutes I will deal with the increases in child endowment. First let me deal with the sorts of things that have become taxable since 1 July 1976. They include pensions for persons below age pension age and unemployment and sickness benefit. The tax rebate for children has been withdrawn. Pensions which will now become subject to tax irrespective of the age of the person to whom they are paid are (1) widows pensions, (2) supporting mothers benefits, (3) Service pensions other than those equivalent to invalid pensions and (4) unemployment benefit, sickness benefit and special benefits: All these benefits will now become taxable.

I turn now to the deficit. I think that in any case the deficit is fictitious. It was a fictitious figure that we heard from the Treasurer the other day. I do not have the support staff to enable me to go into all the figures in great detail but I will cite 5 examples which seem very obvious to me of where the Government has underestimated expenditure quite significantly. I am sure that there are many other examples as obviously I am not aware of all the points. The first example is the tertiary education assistance scheme. The Government has already said, and it has repeated now, that in October this year it will make an announcement to the effect that there will be a significant increase in the tertiary education assistance scheme allowance, but no provision has been made in the Budget for an increase. Obviously extra expenditure will be incurred. No provision has been made for extra expenditure on nursing home benefits. I can just see, when the nursing home proprietors again threaten to put patients out on the streets, how quickly the Government will cave in and increase nursing home benefits. I turn to the unemployment benefit. The estimated figure in the Budget is based on a 25 per cent reduction in unemployment. Even in its wildest dreams the Government does not really expect a 25 per cent reduction in unemployment and it will obviously have to provide extra money for the unemployment benefit.

University expenditure has not been increased to cover the increases in academic salaries that have now been recommended by the Academic Salaries Review Tribunal. It appears that the Government will increase academic salaries but it has made no provision for those payments in the Budget. Finally- it is final only as far as I am concerned, because there must be many other areas- there are the changes in Medibank. Since the Budget there have already been announcements of further changes in Medibank. There will now be no 2.5 per cent Medibank levy collection from people who are at present eligible for pensioner medical service benefits, yet this will obviously cost money. In order to remove those people from liability for the levy the legislation will have to be altered in the next few days. I note that yesterday, in reply to a question in the Senate, Senator Guilfoyle suggested that other people who felt badly done by in relation to the 2.5 per cent levy and who felt that they could not afford to pay it, could make representations. Apparently, provided they are supported by a Liberal member of Parliament or maybe by members of the clergy, civil marriage celebrants or some other appropriate persons, they will not have to pay the 2.5 per cent levy. The only point I am making there is that this will be an extra cost because the Medibank collections will be less than the $250m estimated.

Now let me deal with the withdrawal of the tax rebate for children and the introduction of the increased child endowment. Almost every speaker on the Government side has repeated the proposition that this is a tremendous benefit for all Australian people. I do not oppose what has been done but the point I would like to make is that the vast majority of Australian parents will be worse off. I seek leave to incorporate in Hansard a table which I have prepared.


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


-The point I seek to make there is that the tax rebate this year, with indexation, would have been $226 a year for each child. This amounts to $4.35 per week per child. Let us look at a family with one child. Last year, provided the parents were taxpayers, they would have received a tax rebate worth $4.35 and child endowment of 50c a week, making a total benefit of $4.85 for being the parents of one child. This year they will receive $3.50 in child endowment and no tax rebate- a loss of $ 1.35.

Mr Sainsbury:

– That is for one child?


-For one child. For 2 children the tax rebate would have been $8.70 and the child endowment would have been $1.50 for the 2 children, making a total of $10.20. This year they will receive $8.50 for their 2 children in child endowment and therefore they will lose $1.70. For 3 children they will lose $2.05 and for 4 children they will lose $2.65. Every taxpayer in Australia who has dependent children will be worse off under the Government’s new proposals. It is significant to remember that. The Government has got away with murder so far in pretending that people will be better off. They will be significantly worse off. For the average taxpayer it is very difficult to work out benefits. I suggest that the average taxpayer should have a look at the page in the Budget which deals with income tax collection. He will see that all the wage and salary earners in Australia will be paying an extra $ 1,755m in tax this year, an increase of 24.7 per cent, a much greater increase than the previous Government ever brought in, and it was supposed to be a high tax Government. If he does that, the taxpayer will know just what is happening to him. He is getting all these benefits that the Government is offering to him and this lower taxation yet apparently he will be paying all this additional money. Where is all this additional money in taxation coming from? It is coming out of his own pocket. Yet this Government was elected on the slogan that the Australian people should be allowed to have the maximum amount of money in their own pockets and to be able to make their own decisions as to how to spend that money. I think that most Australians will agree with that, but they will also see that a complete fraud has been perpetrated on them and they will be looking forward to the chance to correct the position.


– Order! The honourable member’s time has expired.


– I am pleased to be able to take part in this Budget debate. I would like to emphasise to the Opposition and to the public that this Budget clearly indicates that the Government cares for people, contrary to what the honourable member for Prospect (Dr Klugman) said. The Government has proved this beyond any doubt in the social services area. If honourable members look at the family allowance scheme, about which the honourable member spoke at length, I am sure that they will realise that the welfare of people is uppermost in the minds of all Government supporters. What the Opposition is saying is completely untrue. Having spent the last weekend in my electorate in central Queensland I am pleased to be able to report to the Treasurer (Mr Lynch) that the Budget has a large degree of support in that area- with the exception, of course, of one or two elected members in that area who belong to the Australian Labor Party. I hope at a later stage to be able to touch on one or two of the things that they are saying.

The Budget has far reaching advantages for the pensioners in our community. There is now provision for all pensions to be tied to the consumer price index. This will mean that no person receiving a pension will be disadvantaged by inflation. The pensioner will be able to plan ahead with a greater degree of security. As far as I am concerned, the most important aspect of this provision is that it removes the pensioner recipient from the political arena and no longer will political parties of any persuasion be able to offer an increase in pension as a means of attracting the pensioner’s vote. Repatriation pensioners have also expressed their appreciation of this Budget, which undoubtedly will delight members of the Australian Labor Party.

In my area the Labor Party is pushing the theme that we have forgotten the rural producers. One could be forgiven- I always am forgivingfor wondering why the Labor Party has suddenly discovered that people reside outside the large metropolitan areas. Is it because it would uke those people to believe that it was only fooling in its approach to the rural sector during its term in office? If that is the case we can all be extremely grateful that it never really became fair dinkum at any stage during the course of its reign. All people who are critical of our Budget allocation for the beef industry and to the primary industry sector would be well advised to study the Budget proposal and to realise that it will be an ongoing program and not merely a once only allocation.

Let us have a quick look at what this Government is providing for the rural sector. We are providing carry-on finance of up to $4,000 at an interest rate of 4 per cent over 7 years for dairy farmers and carry-on finance up to $10,000 at an interest rate of 4 per cent for beef producers over 7 years. Another $15m has now been made available in loans to beef producers this financial year in partnership with the States on a $ 1 for $ 1 basis. The limit is to be increased to $30,000 in

Queensland, the Northern Territory and pastoral zones in all other States. Elsewhere the limit is to be doubled to $20,000. The term and farm development loan funds of the major trading banks are to be replenished by a total of $ 1 59m. Of that amount, $106m will be added to the Term Loan Fund and $53m will be added to the Farm Development Loan Fund scheme. A further $ 10m earmarked for rural reconstruction under the States Grants (Rural Reconstruction) Act for the 6 months ended December 1976 has been made available while the Government considers the recommendations of the Industries Assistance Commission. Further, we are continuing our activities in regard to the Rural Bank.

Funds for farm amalgamation development and diversification are still available. Provision has been made to date of $13.5m for adjustment assistance to the dairying industry for 1976-77. Provision of $ 18.5m has been made for brucellosis and tuberculosis eradication, including for the first time provision of $6.5m compensation for brucellosis reactors. The Government has increased the whole wool averaging floor price from 206c to 234c a kilo for the 1976-77 selling season and has further undertaken that it will be no less than that for 1977-78. We have made farmers eligible to receive the unemployment benefit. That is something which Opposition members have never ever thought of and never contemplated.

Mr Clyde Cameron:

– They did not need it.


-Of course they needed it. The honourable gentleman sat in judgment on our primary producers and helped to bring about their demise; make no mistake about that. The Government has provided $6m for the extension of the Softwood Forestry Agreements Act for 1976-77. We have underwritten on a two for one basis with the States the prices of skim milk powder at $300 per tonne for 1975-76 and of both skim milk powder and casein until 31 December 1976. The Federal Government alone has underwritten butter at $900 per tonne and cheese at $680 per tonne until 31 December 1 976. Those measures will cost millions of dollars. One has to say here that it certainly would be better to receive 55c a pound for butter fat than it would be to receive 50 cents. But 50c is a darned lot better than 32c or 35c which was the price proposed by some other organisation.

We have introduced a special 40 per cent investment allowance for new plant and equipment. That is a major step forward. Anyone who is contemplating buying machinery today would be well aware of the fact that in most areas machinery is almost unprocurable. We have suspended the export meat charge. I wonder who introduced that charge. That charge would have cost producers some $25m annually, and in fact it did cost them that amount. Although there is now a carcass levy for the brucellosis campaign, it brings in only about $8m per annum to the Government. So there is a gain of $ 17m to the producers. We paid the Meat Board $1.2m to offset the Russian beef loss.

Mr McVeigh:

– They practically gave that meat away to Russia.


– They did. They were behind it and supported it. They said it was a wonderful idea, a wonderful scheme to assist rural producers. The honourable member for Darling Downs is quite correct. We have made loan funds available to enable fruit canners to make payments to growers for fruit delivered in the 1975-76 season. We have made further funds available for price support of export apples and pears and dried vine fruits in the 1976 season. We have made a grant of $250,000 to the Apple and Pear Corporation to supplement its funds. An amount of $65,000 is being made available to the Australian Wine Institute in 1976-77 to support its activities. We have provided an additional $lm for the continuation of the fruit growing reconstruction scheme which assists in the removal of surplus fruit trees, particularly in Victoria and South Australia. The application date has been extended to 3 1 December 1 976.

Mr Clyde Cameron:

– Why did you not try to get markets instead of cutting down the trees?


– We are trying, but the Government of which the honourable gentleman was a member ruined our overseas credit rating; it ruined our credibility overseas. It did everything it possibly could to bring this nation to the state in which we found it on 13 December 1975. The honourable member ought to be proud of himself; he did a marvellous job. We are now introducing an income equalisation deposits scheme which will enable primary producers better to withstand natural disasters and years of unusually poor returns. The amount deposited can be deducted from taxable income in the year to which the deposit relates. It is then added back to taxable income in the year in which it is redeemed. An interest rate of 5 per cent will be paid on the total amount. Up to the amount of $100,000 in total deposits can be held and deposits redeemed at any time from one year after a deposit is made.

Probate exemption, where property passes wholly to a surviving spouse, has been increased from $48,000 to $98,000 for primary producers. That measure will exempt about 20 per cent of estates now dutiable. Honourable members opposite think that is funny. They say that we have forgotten the primary producers, but they cannot match what we have done. They were not even aware that we were introducing all of these measures. We have increased tariff protection from orange juice imports. We have made provision for drought relief for affected areas under the natural disaster assistance arrangements with the States. Honourable members opposite are still talking. I would like to pass on now to the Brigalow area.

Mr Clyde Cameron:

– I wish you would.


– The honourable member would not know where the Brigalow areas are located; they are in Central Queensland, which is a vital part of Australia. Under the Brigalow Land Development Act there is provision for the capitalisation of interest. I would appeal to the Ministers in the State Government and also to our Federal Ministers to act upon that provision more in the future because in my area the beef crisis is very real indeed. For the information of honourable members I would like to supply a few details pertaining to the Queensland beef industry. In 1972, 344 700 tonnes -

Mr Clyde Cameron:

– How about finishing on that note?


– I am going to finish where the previous Government left off, and that is when the nation was in ruins. The value of those 344 700 tonnes of beef was $220m. In 1973 we processed 384 100 tonnes of beef.

Debate interrupted.

page 589


Uranium Mining- Environment- Lone Parents-Rural Industry -Medibank: Pensioner Medical Service Cards- Family Allowances -The Budget: Attitude of State Premiers

Mr DEPUTY SPEAKER (Mr Lucock)Order! It being 10.30 p.m., in accordance with the order of the House of 1 8 February, I propose the question:

That the House do now adjourn.


-During the parliamentary recess I visited the Ranger uranium site at Jabiru and the Pancontinental uranium site at Jabiluka, both of which are in the Northern Territory. I am utterly appalled that these mines are retarded, particularly the Ranger mine, which has been the target of every greenie in Australia. I am shocked that the continual nonsense offered as evidence to the Fox Commission by extremists- I can only call them econuts- is being taken seriously. One might easily say that nothing so far offered to the Commission as evidence is in any way original. It seems to me that world nuclear experience, from mining to power generation, has not changed so much in the last 10 years that the experience and the knowledge gained should not be available to mine uranium safely. It seems to me that this experience could easily have been applied to Australian conditions by the project people themselves.

I suggest to the Government that there should be no more delays. Let the Fox Commission leisurely finish its proceedings as its chief has indicated he wants to do. If Mr Justice Fox wants to go overseas, by all means let him do so, but let us get on with the job by definite Government decision. An example of what I call this extremist greenie nonsense has come to hand in a government publication. I refer to the Northern Territory Newsletter, the most recent issue of which turned up in my mail. I note that a professor from the University of Queensland has airily said that the proposed Ranger plant and township should be moved to about 30 kilometres west of the present site.

Mr Abel:

– Quite impractical.


– As my colleague says, this is quite impractical. A little bit further on in the Northern Territory Newsletter, the professor airily says that to move the plant 30 kilometres westward would cost millions of dollars extra a year on haulage. No trouble at all! What appals me is that the Northern Territory Newsletter is one of our own government publications. It seems to me that if we are to encourage mining as we have indicated in the Budget, we ought to put a stop to this sort of thing. We play around with this sort of nonsense while everybody else in the world is getting on with the job. We act as though we are the only people in the world with uranium and other minerals for sale. We just do not seem to get on with the job. There is no doubt that places like Brazil will beat us to the punch completely if we continue to hold up developments in the way we have been doing.

Most of the delays can be directly attributed to honourable members on the other side of the House. They had a real greenie complex for the 3 years they were in government. They listened to every scrap of nonsense that was ever handed out. Worst of all, they acted on it in this Parliament. They introduced legislation which held up mining developments. At the moment Peko and Pancontinental are ready to move. I think we should give them every support. I believe we should get on with the job. The story of the hold-up is a terrible one.

Mr Scholes:

– You had better get on with the pecuniary interest thing, too.


-I have no pecuniary interest in this matter. I just want to see this development and others get moving. The story of the hold-ups and delays in the Ranger and Pancontinental situations amounts to a major scandal. People on the site have a terrible story to tell. Really I suppose it could be told in a much better fashion than I am telling it here this evening. I suggest to those who are interested in this matter that they should read a quite brilliant article by Robert Duffield in the Australian of Friday, 13 August. Some of the things he recounts there would melt even the hard hearts of the people on the other side of the House. Those involved in the projects have got to a stage now where they feel they cannot count on anything; they feel they have not got the right to hang on to the sites that they have been prospecting and developing over the last couple of years.

There are people there who have been working their hearts out but the mines are still not working concerns. They were forced to the awful indignity of having to go along almost as suppliants to the Fox Commission. This cost them $750,000 in addition to all the other money they had put into the mining venture. Now they have the extra problem in regard to the Aboriginal Land Rights Bill on which I suppose we are going to have a bit more to say later on. This situation is a scandal. This Parliament should take action as soon as possible after the Fox Commission report is received. I know we are in a situation where we have to wait and listen to what Mr Justice Fox has to say, but I still say it is a major scandal and is something which should never have occurred.


– I think the House is indebted to the honourable member for Swan (Mr Martyr) for the manner in which he has put a case on behalf of the Government. I hope that his views and what he sees as being the rights of individuals do not reflect the human values of all Government supporters. He has made his position quite clear. He believes that those people who would seek to preserve anything in Australia against the rape of those who would make profits have no rights and should be looked on as nuts. He made that absolutely clear. He has stated his attitude with regard to Aboriginal land rights. He believes that they will only be to the disadvantage of mining companies. I suggest that the experience of other countries should be taken into consideration in Australia. If the honourable gentleman believes that everything is plain sailing in these areas, that anyone can go out and rape his country without any consideration or justification, then I suggest he has very little feeling for the country which he serves in this Parliament.

Mr Martyr:

– One-tenth of one percent of the total area of Australia is being mined.


-One-tenth of the total area of Australia is being used for this purpose; another tenth is being used for another purpose. Everywhere in Australia there is another purpose which should be served. Only a couple of years ago we had the Clutha development in New South Wales. I am sure the honourable member would describe people in the woodchip industry who are raping our forests as being good honest citizens earning a dollar. I suggest he should go to some European countries where no native forests are left. Australia will look like that within the next 30 years unless -

Mr Martyr:

– What about the regeneration program?


-There is none. The honourable member suggested that that was a waste of time. A justification can be found for anything where there is a dollar to be made out of it. In the United States of America, Lake Michigan reached the stage where the water was poisonous because it was being used as a natural cheap sewer. Port Phillip Bay in Melbourne is being treated in exactly the same way. I hope it will be saved. A lot of Australia’s natural resources and environment are in danger from overexploitation without proper care.

Mr Martyr:

– The mining companies do not do that.


– The mining companies are there to make a dollar. They are not interested in what is left after they leave. I suggest that the honourable member for Swan, in his efforts to satisfy the mining companies, should leave well alone. I believe that the proper course was to allow an inquiry. It may well be that the inquiry will find in favour of the mining companies in this area. I am certain that if it does the Government will accept those findings. I think the Minister concerned has taken a proper attitude in waiting for the report to see exactly what the position is. I suggest that this House would do well to look at its own capacity to examine protection of the environment. I would have hoped that it was a matter that by now could have reached the stage of being treated as a non-party matter. But, unfortunately, wherever money is involved the country is not considered. I do not suggest that that applies to the majority of honourable members opposite. There are honourable members opposite who were in the previous Parliament who fully supported and spoke regularly on what was done. I would suggest that for any member of this House to say that an inquiry set up to study and report on a very serious long term problem for Australia should be treated with contempt and its report not waited for by the national Parliament is acting in a manner which is less than Australian.


– I wish to direct my remarks briefly in the time afforded me to the difficult situation of lone parents in society, particularly lone fathers. It must be decided to what extent people should be supported by the community in times of stress or crisis and the need for continuing support for those who have some more permanent social or economic disadvantage. Motherlessness cannot be regarded merely as a private trouble. Because of the fact that it is a product of social change there are more practical grounds for social concern. Family break-up of any kind is a matter of importance to society because the family has a number of important social functions.

The family has the main responsibility for socialising the next generation. It provides a unique opportunity for the satisfaction of emotional needs and it is an important agent of social control. An incomplete family is likely to find it more difficult than a complete family to carry out these functions. Therefore society is bound to be concerned, and concerned it should be. When a wife and mother is deserted and left without maintenance the community, through welfare benefits, makes provision to take over the breadwinner’s role. This leaves the mother free to pursue her accepted role of home maker if she chooses, of course sometimes under great difficulty and strain. It could be argued that if the community is prepared to take the responsibility of breadwinner for a single mother, then it should also take the responsibility for the provision of a substitute mother. However, if a single father stays at home the community frowns on him.

Whether the father decides to stay at home or continue to work, society is not prepared to support him in his efforts to maintain his family. Deprived of society’s acceptance, his self-respect is vulnerable. The widowed must cope with their grief, the divorced with their self-doubts and the unmarried with any feelings of guilt. Above all, they face the mammoth task of convincing themselves and their children that they can manage alone. Many lone parents’ needs arise simply from the fact that providing for physical, social and emotional needs of all the family members is usually a full time job for 2 adults.

The Finer Report, the report of a community on one-parent families in the United Kingdom in July 1974 found that even at the level of disposing of everyday chores and despite the degree of merger between the traditional roles of male and female which has taken place in the last decade, many household tasks still tend to be allocated sexually. The necessity for the lone parent to take on both roles may arise suddenly, leaves no alternative and often is not satisfactorily achieved. There tends to be either a reduction in the tasks performed or a reduction in the adequacy of performance unless there is external assistance. Many men are not acquainted with the skills which are taken for granted in the running of a family home, for example, cooking, house cleaning, budgeting and buying of children’s clothes. Men tend to find it difficult to economise on the household shopping and their lack of expertise provides a strong incentive for chosing convenient methods such as instant foods.

If the father continues his employment it often means that both the housework he has to do when he gets home from work and his job are not properly done. If the children are given tasks to do it may be too much for them. Lack of time is always a major concern. If a father decides to try and keep a family together he will almost certainly find it a struggle to maintain a full time job and still provide for child minding during the time he is away outside school hours. The Finer report found that about one third of lone fathers had to leave their children to their own devices after school. School holidays are also periods of particular financial and emotional strain. Holidays cover about 3 months of the year and it is impossible for a low income earning father to take time off work or to pay for child minding.

As well as the more tangible needs there is often a need for a lone father to relate to his children in a way which he has not done before. Difficulties such as how to discipline children; how to provide the affection that they previously received from their mother, for example, the mother-daughter relationship, how to support the children when they are embarrassed or hurt by other children who jibe at them about not having a mother. Quite apart from the problems of the lone father in coping with the household and children the lone father needs emotional support purely for himself. Many lone fathers complain of the difficulty in acquiring new friends. Unfortunately, some have reported that they were no longer accepted -

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


-Tonight I should like to draw the attention of the House to the effects of wage rises in rural industry. I shall cite 2 examples. The first is an instance of an 18^-year-old boy to whom I spoke recently. He was working in an abattoir. After an in-service training course of 3 weeks or so he went to the meat boning floor of that abattoir. His base wage was $196 per week. Overtime of $20 or $30 brought his total wage to about $210 to $220 a week. For the last 4 months the average working time in that abattoir was 32 hours a week. Yet that 1 8 Vi -year-old boy complained to me very strongly about how underpaid he was for what he regarded as strenuous work requiring long hours.

Mr Martyr:

– What did you say?


– I cannot repeat it in this venerable chamber. Another example is the effect of unemployment benefit on the availability of casual labour, particularly in intensive agriculture industries such as horticulture. The federal award wage for a station hand with 2 years experience or more who is capable of undertaking the tasks required of him is $1 12.50

Eer week. One man sees fit- I can hardly blame im- to apply for unemployment benefit and obtain $68.50 a week as a married man. The allowance for his 3 children brings his total unemployment benefit to $9 1 a week. I put it to the House that there is little incentive for that man to go out and look for employment when, in fact, by working he is getting an advantage of only $20 a week from which he has to account for his travelling time and travelling costs.

The more serious situation, I think, is the attitude that has been engendered in so many people towards work, towards productivity. There is a very serious mentality problem in this regard. I recently spoke to some school leavers who were convinced that they should be eligible for unemployment benefit immediately they left school if they could not get jobs. In fact, some advocated that they should be eligible for unemployment benefits during the school holidays between school terms. We have one of the highest average wages in the world. We have had one of the highest increases in wage rises and there is very little to show for it in productivity. In fact, in many industries, productivity is declining. We have out-priced ourselves from world markets because of this mentality and attitude engendered and supported so much by the previous Administration. Labour in agriculture is virtually a dying concept not only in terms of its availability but also in terms of its quality. The labour intensive industries, for example, the horticultural industries, are in dire straits from the point of view of getting suitable labour. I believe that we have a vast job ahead of us to try to counter this attitude and this cash hand-out mentality that has developed over the last 3 years.

St George

– I should like to congratulate the Government on its decision to exempt the holders of pensioner medical service cards from the Medibank levy. This will benefit an estimated 12 000 people in St George and vast numbers of people throughout Australia. The electorate of St George has approximately twice the national average number of pensioners. I have inquired today of the Minister for Health (Mr Hunt) as to the position of persons who do not have a card. He has informed me that the Government has decided on a scheme for threshold payments and that the details of this scheme may be announced.

There will be a shading-in arrangement which has been made to soften the impact of the Medibank levy at the lower income levels. The Government has adopted a shading-in arrangement to avoid high marginal rates of tax and levies on persons with low incomes. This arrangement applies to married persons, sole parents and to persons without dependants. A married person with a fully dependent spouse for whom the tax rebate of $500 is allowable, earning $4,300 per annum commences to pay the levy on a shaded-in basis, so that he pays the full 2Vi per cent on a taxable income level of $4,698 per annum; thus the 2 1/2 per cent Medibank levy does not become fully effective on taxable income until it reaches $4,698 for such a person. A sole parent commences to pay the levy on a shaded-in basis on a taxable income of $3,79 1 per annum. The full 2& per cent levy does not become fully effective on taxable income until it reaches $4,142 per annum. On the other hand, a person who does not have any dependants commences to pay the levy at a taxable income of $2,605 phasing into the levy at the full rate of 2lh per cent on a taxable income of $2,846.

This measure combined with the automatic adjustment of pensions with the Consumer Price

Index and the removal of the property element of the means test and the pensioner medical service card decision shows that this Government does care for pensioners and is giving them the best deal in the history of Australia.

Monaro · Eden

– I am following about 5 minutes behind the member for Franklin (Mr Goodluck) who spoke on a matter relating to families. I want to speak on that subject also. Tonight in speaking to the Budget the member for Prospect (Dr Klugman), and I must add in parenthesis after hearing what he said there is no prospect for Prospect, the learned doctor- doctor of neither mathematics nor logics I would presume- made some wild assertions about family allowances.

Mr DEPUTY SPEAKER (Mr Lucock)Order! I point out to the honourable member for Eden-Monaro that during an adjournment debate a member is not allowed, under Standing Orders, to refer to the subject matter of a debate which has occurred in the House earlier that day. If the honourable member for Eden-Monaro is going to cover the subject matter remarks of the honourable member for Prospect in the Budget debate, he will be out of order.


-I will not do that. I will speak about family allowances which were announced in May this year. There has been some misapprehension among members of the Opposition about who will benefit and who will not. I should like to read the actual figures of benefits related to the pre-family allowance and post-family allowance. A family with one child will be 80c per week worse off; a family with 2 children will be 30c better off; a family with 3 children will be $1.40 better off; a family with 4 children will be $2.25 better off; and a family with 5 children will be $3.85 better off. That is my case, Mr Deputy Speaker.

The Australian population has still shown a great propensity to have children. The member for Swan (Mr Martyr) has thirteen, I believe. Frivolity aside, the family allowances are a most important innovation. Women in my electorate have taken it wholeheartedly and welcome it greatly. If one were to be callous, I suppose there is an economic problem that we do not know about yet. We do not know whether the family allowance to be given to womenfolk in general will be saved or consumed. From that point of view there is a question mark about its actual effect on the economy, but certainly as a social measure it is a great innovation and it is another pointer that shows that the Government thinks about people. The mothers will remember this in the next election. I hope that people will not continue to denigrate the family allowance in the way that has been done, and done again tonight, because the figures that I have quoted are accurate.


-Mr Deputy Speaker, even members of Parliament are permitted to have their pet hate or bete noire and if there is one thing that really annoys me it is the person who perpetually whinges and moans and takes the gloomiest approach possible to any problem with which he is confronted. We had a classic example last week with the comparison of the attitudes of 2 State Premiers to the most important economic document brought down in this Parliament for many years. I refer to the Lynch Budget. On the one hand we had The Australian of Thursday 19 August carrying a banner headline which, in my humble opinion, represents a statesmanlike attitude by a Premier of a State, albeit a Labor Premier, the Premier of N.S.W. Under the banner headline ‘ “I’ll give it a go” says Wran’, the newspaper article stated: ‘The Labor Premier of New South Wales, Mr Wran, last night urged people to support the Lynch Budget ‘for the good of Australia. ‘ ‘I’m prepared to give the Budget a go,’ he said after a meeting of his Cabinet. ‘ I hope everyone will join together to get this country back on its feet. ‘

That is an attitude for which I commend Mr Wran. I compare it with the gloomy, miserable, negative and thoroughly destructive attitude of the Premier of Tasmania because on the same day under the headline: ‘Neilson gloomy at Canberra omelette’, we had the Premier of Tasmania saying that the Budget had failed miserably to deal with unemployment. He said that it was obviously a device to throw on the States the responsibility for financing a number of programs which had previously been federal responsibility. The headline was ‘Neilson gloomy at Canberra omelette’. He called the Budget an omelette and was gloomy about it. We have to make up our minds in this country whether we want to see it recover economically.

I am sick and tired of the whingeing and moaning from members of the Opposition who want unemployment to go up, who want inflation to go up, who want the country to be ruined economically simply because they think they can make political capital out of it. What many people on the other side do not realise but the people outside this chamber do realise is that prior to the election of 1972 this country had one of the lowest inflation rates in the Western world. It had a stable employment situation. We left this country in a sound economic situation in

December 1972, but within 3 short years the economic vandals opposite turned this country into one which had the highest inflation and highest unemployment that we have ever seen in Australia in peace time. It was a disgraceful exhibition of economic incompetence and mismanagement. Now when we are endeavouring to put this country back on the right track and we are already seeing the first signs, albeit small, of recovery- when there is a light at the end of the tunnel- we have a situation that the knockers in Australia are trying to impede the progress and development of a Budget which is designed to bring back confidence. I say to my friend, the honourable member for St George (Mr Neil) who once again gives me the word, we are sick and tired of the Jeremiahs, the Jonahs and the moaners. Let us resolve tonight that people who come to this Parliament and stand up and whinge and knock Australia- the people who are trying to instil fear into the hearts of the peopleare behaving unpatriotically. Their actions are un-Australian. Their desire is purely political self-motivation.

I implore honourable members opposite who are yet to speak to the Budget not to follow thenLeader; but follow the example of the honourable member for Hindmarsh (Mr Clyde Cameron). They should ignore everything the Leader of the Opposition (Mr E. G. Whitlam) says. They will be much better off and the country will be much better off, because if ever this country has heard a leader say that he has not learned by his own mistakes it was what we heard on Tuesday night. The message that the Leader of the Opposition gave to Australia was this: If he is given another chance he will do exactly the same thing again. Not only has he not learned the lesson but also he is determined that if he gets another chance he is going to do to Australia what he did between 1972 and 1975, only next time he will probably do it more slowly.


-Order! It being 1 1 o’clock the House stands adjourned until 10.30 a.m. tomorrow.

House adjourned at 11 p.m.

page 595


The following answers to questions upon notice were circulated:

Home Building Blocks (Question No. 824)

Mr E G Whitlam:

am asked the Treasurer, upon notice:

What have been the dates and findings of the Commonwealth Savings Bank’s latest surveys in each capital of the average prices for blocks of home building land at various distances from the city centre.

Mr Lynch:

– The answer to the honourable member’s question is as follows:

The Managing Director of the Commonwealth Banking Corporation has advised that the Corporation’s latest such survey relates to early June 1976. The results of that survey are included in the June 1976 edition of the Corporation’s publication ‘Housing in Australia’. Copies of this publication (and previous such publications) have been provided to the Parliamentary Library by the Corporation.

For convenience, I have forwarded a copy of the June 1 976 publication to the Leader of the Opposition.

Education Allowances (Question No. 907)

Mr Garrick:

asked the Minister representing the Minister for Education, upon notice:

  1. Is there widespread dissatisfaction with the level of student allowances at the tertiary level.
  2. Will the Government look at the possibility of pegging the Tertiary Education Allowances Scheme payments to the level of unemployment benefits.
Mr Viner:

– The Minister for Education has supplied the following answer to the honourable member’s question:

  1. 1 ) The Government is aware that allowances for tertiary students have not been increased for some time and that the value of these allowances has been eroded by the effects of inflation. The Minister for Education has received representations from a number of interested persons and organisations concerning the level of allowances.
  2. As the Treasurer announced in his budget speech an urgent investigation has been initiated into the adequacy of existing rates of benefits under the Government ‘s schemes of student assistance. The level of benefits payable under the Tertiary Education Assistance Scheme in 1977 will be determined in the light of this investigation. The Government’s decisions in this regard will be announced in October.

Cite as: Australia, House of Representatives, Debates, 25 August 1976, viewed 22 October 2017, <>.