House of Representatives
7 September 1976

30th Parliament · 1st Session



The House met at 2. 1 5 p.m.

page 701

ABSENCE OF MR SPEAKER

The Acting Clerk- I have to inform the House of the absence of Mr Speaker who is on parliamentary business overseas. In accordance with standing order 14, the Chairman of Committees will take the chair as Acting Speaker.

Mr ACTING SPEAKER (Mr Lucock) thereupon took the chair, and read prayers.

page 701

PETITIONS

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

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 larger, and the cost of funerals increase ever greater.

Your petitioners call on the Australian government as a matter of urgency to:

Adjust social security payments instantly and automatically when the quarterly Consumer Prices Index is announced;

Restore pharmaceutical benefits deleted from the free list;

Update the State Grants (Dwellings for Pensioners) Act of 1974, eroded by inflation, to increase grants to overcome the backlog; and

Update Funeral Benefit to 60 per cent of reasonable cost of funeral. (This benefit was 200 shillings, 20 dollars, when introduced in 1943. It was seven times the 1943 pension of 27 shillings a week).

And your petitioners as in duty bound will ever pray. by Mr Lionel Bowen, Mr FitzPatrick, Mr Les Johnson, Mr Ian Robinson and Mr Sullivan.

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 respecfully 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 Les McMahon, Mr Martin, Mr Morris, Mr Stewart and Mr Antony Whitlam.

Petitions received.

Chiropractic Services

To the Honourable the 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 everincreasing 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 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 Giles, Mr Lloyd, Mr McVeigh and Mr Sullivan.

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. programmes.
  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 enquiries 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 enquiry.

And your petitioners as in duty bound will ever pray. by Mr FitzPatrick, Mr Garrick, Mr Les Johnson and Mr Morris.

Petitions received.

Discrimination Against Croatians

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. 1 ) That the Ethnic Radio Hour in N.S.W. broadcast in Croatian is controlled and run by members of the Yugoslav community and that the Australian-Croatian ethnic community is given no say.
  2. That Australian passports have been denied to some Australian citizens of Croatian origin without explanation or possibility of appeal.
  3. That discrimination has been exercised in the granting of citizenship privileges to migrants of Croatian origin.
  4. That discrimination is being exercised by the Australian Parliament in the negation and non-recognition of Croatian nationality.
  5. That discrimination is being exercised by the Australian Government in Ethnic Schools and University courses when it permits only the teaching of Serbo-Croat and not of the Croatian language as an alternative.

Your petitioners call on the Australian Government as a matter of urgency to consider these facts in the light of justice towards a people who came as strangers to this land, and to take appropriate action to remedy the present situation.

And your petitioners as in duty bound will ever pray. by Mr Howard, Mr Haslem and Mr Neil.

Petitions received.

Metric System

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

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

That there is no certainty 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 pray:

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

And your petitioners as in duty bound will ever pray. by Mr Staley, Mr Chipp and Mr Lloyd.

Petitions received.

Education

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 urges the following:

  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 1975 reports of the Australian Universities Commission and the Commission on Advanced Education and re-establish the principle of triennial planning.
  4. That the Australian Government review the National Employment and Training Scheme to ensure that students suffering hardship are restored a living income.
  5. That a student loans scheme be not introduced to replace NEAT and TEAS.

Your petitioners therefore humbly pray that the indexed value of education spending be maintained, the recommendations of several reports on Australian education be implemented and certain other actions be taken.

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

Petition received.

Education

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 1975 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 principle of triennial planning.

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

Petition received.

Australian Atomic Energy Commission

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

That whereas uranium found in vast quantities in Australia is the raw material for the nuclear fission reaction; And whereas presently assured reserves of uranium in Australia represent a potential production of over 540 000 kilograms of Plutonium 239 if utilised in Light Water Reactors overseas; And whereas the Maximum Permissible Inhalation of Plutonium 239 is 0.000 000 25 gram; And whereas Plutonium 239 is one of the most dangerous substances human society has ever created, causing mutations and cancer; And whereas there are no methods of safely and absolutely confining Plutonium from the biosphere for the requisite quarter of a million years; And whereas Plutonium coming in contact with the air forms an aerosol cloud of micron-sized particles, its most dangerous form; And whereas the export of uranium may return to us as important Plutonium particles dispersed in the global environment via the circulation of the atmosphere; And whereas there are no sure safeguards against the military use of nuclear fission, and the nuclear proliferation represents a prime environmental threat to all forms of life on the only earth available to us; And that it is therefore an act of self-preservation to demand a halt to all exports of uranium except for biomedical uses. Your petitioners humbly pray that the members, in the House assembled, will take the most urgent steps to ensure:

  1. That further mining and export of uranium from Australia except for bio-medical purposes be banned,
  2. That the Australian Atomic Energy Commission be transformed by the rewriting of its charter into an Australian Energy Commission to further the understanding of energy flows through our society and to promote national economic independence and self-sufficiency.

And your petitioners as in duty bound will ever pray. byMrAldred.

Petition received.

Australian Atomic Energy Commission

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 products of nuclear fission create risks unlike those of any other single technology and, furthermore, it is uncertain whether or not nuclear fission technology, taking all inputs into account, is a net producer of energy.

Your petitioners most humbly pray that the House of Representatives in Parliament assembled will take immediate steps to bring about the wishes expressed in our petition that: by reason of the hazards associated with the use of uranium in nuclear power plants, mining of uranium in Australia be restricted to that needed for physical and biomedical research and medical diagnosis.

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

Petition received.

Nursing Homes Subsidies

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

The purpose of this petition is to bring to your notice the mounting financial burden being thrust upon patients and or relatives of Nursing Home Patients.

Fee levels are controlled by the Government but increases in Government subsidies have not been sufficient to cover the spiralling fees in Nursing Homes.

Your petitioners must humbly pray that the Government will consider its decision and take immediate steps to apply a major increase in patient subsidies.

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

Petition received.

Nursing Home Subsidies

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

  1. That there is a great concern and alarm at the removal of some Government support for St Lukes Hospital, Garden settlement and for other institutions providing care for the aged within Queensland.
  2. That the removal of grants is causing unnecessary hardship to those aged citizens of Australia who are dependent upon continued care and accommodation.
  3. That the removal of grants has caused unnecessary unemployment and hardship for those who were previously employed in duties caring for the aged in those centres where reductions in grants have been made.
  4. That the aged, and others within Australian Society who are least able to defend themselves against the arbitrary acts of Governments, should be spared from these unnecessary cuts.

Your petitioners therefore humbly pray:

That the Government should reconsider its decision to cut the budgets of these institutions and immediately restore the grants to enable these institutions to continue their high standard of dedicated and unselfish care for the aged and infirm in the community.

And your petitioners as in duty bound will ever pray. byMrHayden.

Petition received.

Medibank

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.

Medibank

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 Jenkins and Mr Keith Johnson.

Petitions received.

Mr Ignazio Salemi

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

That whereas an amnesty was announced for all illegal migrants and that whereas Mr Ignazio Salemi an applicant for amnesty has been denied amnesty.

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

That as Mr Salemi fulfils all the publicly announced criteria for amnesty he is permitted to remain in Australia as a resident. by Mr Uren.

Petition received.

Radio Broadcasting

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 servicethe mid western suburbs of Sydney and in particular the Municipalities of Ashfield, Burwood, 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.

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 rates is unrealistic and is a discriminatory income tax penalty.

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

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

Petition received.

Racial Discrimination

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 Dr Edwards.

Petition received.

Pensions

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 mean’s test on pensions causes undue hardship to them.

We call on the Government to immediately abolish the mean ‘s 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. byMrFitzPatrick.

Petition received.

Overseas Development Assistance

To the Honourable the Speaker and the House of Representatives in Parliament assembled. The petition of the undersigned citizens of Australia respectfully showeth that many Australians are concerned at the announced decision by the Commonwealth Government to reduce the 1975-76 Overseas Development Assistance vote by $21m and by the abolition of the Australian Development Assistance Agency.

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

  1. as a matter of urgency, reverse the decision to cut the 1975-76 Overseas Development Assistance vote so as to ensure that the full amount appropriated by Parliament for Overseas Development Assistance is spent this financial year to meet the pressing needs of those in the developing countries;
  2. reaffirm Australia’s commitment of Overseas Development Assistance being a minimum of 0.7 per cent of GNP, and
  3. establish a fully independent statutory authority to administer Australia’s official Overseas Development Assistance.

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

Petition received.

Housing

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

  1. That the proposal to exclude all persons from the benefit of tax deductibility for mortgage interest rates other than first home buyers in their first five years of home purchase is a repudiation of the Government’s election undertaking to maintain the scheme.
  2. That the effect of the proposal will cause hardship to many current beneficiaries of the scheme, in that existing benefits will terminate, thus putting housing loan repayments beyond reach.

Your petitioners therefore humbly pray:

  1. That the Government reconsider its decision to drastically curtail the scheme;
  2. That the principles applying to the scheme as introduced by the Labor Government be maintained; and
  3. That benefits be upgraded by indexation to take account of the effects of inflation.

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

Petition received.

Medical Insurance

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned residents of the electorate of Ryan, Queensland, respectfully showeth:

That we protest against the options offered by the Federal Government on Medibank.

That we believe that we should have the option of not paying a Medibank levy- not paying a subscription to Medibank Private Insurance- not paying a contribution to any private health fund.

That we believe we should have the choice to pay our own doctor or hospital accounts if and when we need either. That we should have freedom of choice.

Your petitioners therefore humbly pray that the House urge the Government to give approval for the freedom of choice to make medical insurance of any kind entirely optional.

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

Petition received.

Southerden Lodge

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned residents of ‘Southerden Lodge’ Grange, Queensland, respectfully showeth:

That the City Congregational Church, Brisbane Homes, require permission to be given by the Department of Social Security for the completion at ‘Southerden Lodge ‘of hostel type units;

That appeals to the Land Court by local residents have already been defeated;

That subsidy for further construction was withdrawn by the former Government in August 1975.

Your petitioners therefore humbly pray that the House urge the Government to give approval for the construction of further accommodation at ‘Southerden Lodge’, as soon as possible.

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

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 that50 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.

Aurukun Community: Mining

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

Whereas the Aurukun Associates Agreement Act was passed in contravention of a 1968 agreement;

Whereas this Act conflicts seriously with Commonwealth Government policy on Aboriginal affairs and on Australian equity in multinational corporations working in Australia;

Your petitioners therefore note with appreciation the statements already made on the matter by Government members but humbly pray that the Commonwealth Government will also:

  1. initiate a commission of enquiry into the whole matter;
  2. insist that no mining take place on the Aurukun Aboriginal Reserve until a full environmental impact study has been made by the Commonwealth Department of the Environment, Housing and Community Development;
  3. refuse to grant an export licence to the Consortium until detailed negotiations are held at Aurukun by Consortium representatives with the Aurukun people, the traditional owners of the land and advisers of their choice, and an agreement satisfactory to all has been reached.

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

Petition received.

page 706

QUESTION

QUESTIONS WITHOUT NOTICE

page 706

QUESTION

EMPLOYMENT STATISTICS FOR AUGUST

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

– I ask the Minister for Employment and Industrial Relations a question concerning the employment statistics for August which he issued on Friday. I am not asking him why he discontinued the publication of seasonally adjusted data for total unemployed and for unemployed school leavers because he did give an explanation in his Press statement for omitting them. I do ask, however, why he discontinued the publication of the other seasonally adjusted data for overtime being worked, for the number of persons receiving unemployment benefit and for unfilled vacancies. I ask this because he did not give an explanation for omitting these other series, and I believe there have hitherto been no criticisms of them on technical grounds.

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

-The figures for overtime were quoted. They are the only figures available and they were given in the Press statement in the normal way. The reason given for the omission of the seasonally adjusted unemployment statistics is basically the same as the reason for the other series which the Leader of the Opposition has just mentioned. At the conference of Labour Ministers in Adelaide last Friday this issue was raised, in view of the Statistician’s comments over a long period. I think the Leader of the Opposition will be aware of those comments. I sought views around the table. It was the unanimous view of the Ministers- I stress the unanimity because 3 Ministers were members of the Labor Party and three were members of the Liberal Party- that seasonally adjusted figures were highly confusing, served no useful purpose and should be discontinued. That is the basic reason for the format of the series which the Leader of the Opposition mentioned.

page 706

QUESTION

DROUGHT IN SOUTHERN AUSTRALIA

Mr GILES:
ANGAS, SOUTH AUSTRALIA

– I address my question to the Prime Minister. Is the Government aware of the continuing deterioration in seasonal conditions due to rainfall failure? Has the Government considered the financial implications facing farmers and growers generally in southern Australia with summer yet to come?

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

-The Government is aware of the very acute position of many farmers as a result of the continuing drought which in much of southern Australia looks like being as bad as any that has occurred. That is especially so in Western Australia, South Australia and parts of Victoria. It also applies in parts of New South Wales. The Commonwealth has been involved for a long time in supporting the drought relief measures of the States. The principal support at the moment, as honourable members would know, is in the transport of fodder and stock to or from drought areas and concessional loans for needy producers which are provided through the mechanism of the States where finance is not otherwise available.

This morning the Government further considered submissions in relation to this matter from my colleague the Minister for Primary Industry. We have decided to extend the Commonwealth’s provision of support for farmers in drought areas to the carriage of water where that is necessary. As I understand it, in the honourable member’s State and in Western Australia that is a pressing need. In addition to that there will be special subsidies for local government authorities to pay for the cost of the disposal of slaughtered livestock and in the unincorporated areas, which again applies to the honourable member’s own State, those funds which would otherwise have gone to local government will go to the State government. In addition there will be a support scheme for slaughter compensation to farmers of $ 10 a head for cattle. This is a support scheme which one or two States have indicated they want to introduce and which at least one State has already introduced, I believe, with some beneficial effect.

It is most unfortunate that slaughter compensation has to be a means of alleviating drought pressures but with very heavy stocking in a number of areas it is believed that this ought to be supported as a means of making it possible for breeding stock and well bred stock to continue. In other words, the fodder that is available would go to the stock most worth preserving and to that extent I think this measure is also worthy of Commonwealth support. I will be writing to the Premiers about this matter later today and my colleague the Minister for Primary Industry will be further amplifying the proposals.

page 706

QUESTION

FAMILY LAW POWERS

Mr LIONEL BOWEN:
KINGSFORD-SMITH, NEW SOUTH WALES

-I direct my question to the Attorney-General. I refer to the High Court decision in Farelly v. Farelly which said there is no jurisdiction for ex-nuptial children, there is a limitation of jurisdiction in respect of applications for maintenance, custody and guardianship by people who are not parties to the marriage, and there is a limitation of jurisdiction in respect of property matters which are not ancillary to principal relief. In view of the public interest in these matters and the fact that the national Parliament ought to be able to legislate in this area will the Attorney-General urgently consider a referendum so that the Australian people can give this Parliament the powers?

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

– At the last meeting of the Standing Committee of Attorneys-General the matter which has been raised by the honourable member was referred to it, particularly the issue of property. That had been the subject of some investigation by, I think, the Queensland Law Reform Commission and the matter was referred back to it for further consideration. The other question of ex-nuptial children is more difficult from the point of view of this Parliament because it is really a question of power, and the honourable member has made that point. One way of dealing with this, as honourable members will be aware, is for State family courts to be established. If State family courts were set up they could deal with all law relevant to the family. I have in recent months again approached the States of New South Wales and Victoria with the view to ascertaining whether they will consider setting up State family courts I have had no recent reply, but if these courts were set up it would enable all relevant law to be dealt with in the one set of courts. If they are not set up the question the honourable member has raised will receive my attention.

page 707

QUESTION

AUSTRALIAN ECONOMY

Mr HODGES:
PETRIE, QUEENSLAND

-Is the Treasurer aware of reports attributed to the former discredited and infamous Treasurer, the honourable member for Oxley - (Opposition members interjecting)

Mr ACTING SPEAKER (Mr Lucock)Order! I suggest to the honourable member for Petrie that he reframe his question.

Mr HODGES:

-Thank you, Mr Acting Speaker. Is the Treasurer aware of reports attributed to the former Treasurer, the honourable member for Oxley -

Mr Scholes:

- Mr Acting Speaker, I rise to order. Is the honourable member for Petrie entitled to refer to a member of this House in the terms in which he did? I respectfully ask you to direct the honourable member to withdraw the remarks which, of course, are quite out of order.

Mr ACTING SPEAKER:

– I would suggest that the reason I did not ask the honourable member for Petrie to withdraw the words in the first place was that it could be that the honourable member was referring to the previous

Treasurer not in a personal way but in his capacity and presentation as a Treasurer. In the circumstances, I suggest that the honourable member for Petrie withdraw the remarks he made.

Mr HODGES:

-Thank you, Mr Acting Speaker. I am indebted to you for the advice you have given and I withdraw the previous remark. Is the Treasurer aware of reports attributed to the former Treasurer, the honourable member for Oxley, that a currency devaluation is imminent? Does the Treasurer agree with the criticism that the Government has been slow in dealing with the problem, that it is bad economic housekeeping causing recovery to slip away and that the Government is trying to borrow its way out of the situation?

Mr LYNCH:
Treasurer · FLINDERS, VICTORIA · LP

– The Government’s position on the matters raised by the honourable gentleman has been made perfectly clear in a number of statements made by me, the Prime Minister and the Deputy Prime Minister over a period going back to January this year. It was by myself as recently as 20 May. As I mentioned in my Budget Speech of 17 August,’ . . . whether they know it or not, those who, in the name of reducing unemployment, call for higher government spending, or bigger deficits, or full wage indexation, or devaluation of the Australian dollar, are calling for higher- not lower- unemployment in this country.’ It is certainly completely untrue for any proposition to be asserted in this House or elsewhere that this Government is seeking to stand in the way of economic recovery or that it is endeavouring to borrow its way out of devaluation at the present time.

I say to the honourable gentleman opposite, the honourable member for Oxley, through you, of course, Mr Deputy Speaker, that I regard his comments of last evening as being as irresponsible as they were mischievous. No former Treasurer on any side of this House ought to be speculating publicly on a matter of that type. I think that the honourable gentleman would be the first to recognise that during a period of about 3 years in Opposition when I was for most of that time the shadow Treasurer- it almost seems like a long time ago because so much has happened in the recent period- I deliberately refrained from any comment or any speculation whatever on this matter, an approach which I believed was consistent with the national interest. I suggest to the honourable member that he ought to do likewise. I believe that what we have seen in recent days represents a deliberate intention to talk down the economy and that, surely, is contrary to the interests of any honourable member and contrary to the interests of the country at the present time.

Of course, the honourable gentleman’s unsubstantiated forecasts are typical and characteristic of a series that we have heard over a period. I give some examples: It was the same honourable gentleman who on 1 August 1976, in the same way as he has been making statements recently in the speculative field, said that the Budget would contain massive increases in indirect taxes. Of course, we now know that to be false. He went on to say that the Government would re-introduce television and radio licence fees at a cost of more than $ 100m and we know that to be false. It was the same honourable gentleman who said on 9 August that the Government would be bringing in an income freeze on middle and working class salary and wage earners. We know that to be false. The same gentleman said on 23 May that I should release an economic forecast from Treasury although he as Treasurer had refused even to put down a guideline for monetary growth. In concluding my remarks, I can only wonder what it is the honourable gentleman is about. Is he in fact the representative for the Opposition in this Parliament in relation to defence or is he seeking, for some purpose peculiar and best known to himself, to trample across the economic representation held on the other side of the House by the honourable member for Adelaide? It is a matter of some interest that on the same subject concerning which this honourable gentleman has been speculating, the honourable member for Adelaide said on 3 August:

The balance of payments is healthy at present with adequate reserves of $2.6 billion, the value of exports accelerating in response to the economic recovery of Australia’s major trading partners, and a small net capital inflow.

The honourable gentleman went on with further words to that effect. The only other thing I say out loud is that I do not know what the honourable gentleman is about, but certainly it is not good for Australia.

page 708

QUESTION

AID TO EAST TIMOR

Mr UREN:
REID, NEW SOUTH WALES

– I direct my question to the Minister for Foreign Affairs. Is it true that the Australian Government has abandoned the provision of aid to East Timor through international channels and instead will channel future humanitarian aid through the Indonesian Red Cross? Further, in view of the Indonesian Red Cross’s partisan role in the Timor conflict, what guarantees have been received from the Indonesian Government and what controls have been imposed by the Australian Government to ensure that aid goes to all areas in East Timor and not just to Indonesian controlled areas? Finally, I ask whether persistent Press reports that the Government change in Timor aid policy means that Australia is about to recognise Indonesian annexation of East Timor are true?

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

-In the absence of the Minister for Foreign Affairs, perhaps I may take the question on his behalf. The Australian Government has been most concerned at the plight of those who are in East Timor. At the moment they are receiving no international aid. The Australian Government has consistently and frequently asserted its belief that it would prefer to give aid through international Red Cross sources if possible. As that does not appear possible, it has been decided that aid should be provided through the Indonesian Red Cross. We have been assured that as a result aid will be provided to those people in East Timor who are in most need. We believe that undertaking will be fulfilled. The Australian Government is concerned about the future of those people who are left behind in that colony. The policy it will pursue is intended to try to ensure the protection of the rights and interests of those people and to preserve to the maximum the harmonious relations with Indonesia that we have traditionally and customarily enjoyed.

page 708

QUESTION

PRIME MINISTER: VISIT TO INDONESIA

Mr HAMER:
ISAACS, VICTORIA

– Can the Prime Minister state whether he will visit Indonesia this year? If so, when? Is it his intention to make a major statement on this subject?

Mr MALCOLM FRASER:
LP

– As honourable members know, earlier this year I visited Kuala Lumpur for the funeral of Tun Razak. At that time I was able to have conversations, either there or in Singapore, with the leaders of the Association of South East Asian Nations countries. It was not possible to see President Suharto on that occasion. There has since been an invitation to visit Indonesia for discussions with the President. I shall be picking up that invitation and going to Indonesia for a few days on 7 October. I repeat that there is a long standing invitation from the President to this effect and I am happy to be able to pick it up for a few days. My wife will be accompanying me.

As honourable gentlemen know, the Foreign Minister has been to Indonesia several times throughout the course of this year. No statement about major matters concerning Australia and Indonesia will be released between now and that time. I wish to make it clear, however, that this

Government attaches great importance to maintaining a close working relationship with Indonesia and that I attach considerable importance to establishing personal contact and an understanding with President Suharto. It think it is important for the leader of Indonesia and the Prime Minister of Australia to know each other on a personal basis. I have no doubt that discussions will take place on a wide range of topics. The situation in Timor will doubtless be discussed but it will certainly be given no special accent. The emphasis in the discussions will be on the broad-ranging matters which Indonesia and Australia have in common in furthering the interests of development in this part of the world.

page 709

QUESTION

HEALTH FUNDS: RESERVES

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

– I ask the Minister for Health a question. On the last sitting day, 12 days ago, I asked him why the permanent head of his Department had not more promptly complied with the statutory requirement that he should, as soon as practicable after 30 June each year, furnish a report on the operations of registered medical and hospital benefits organisations. I ask him: Can he now say when he will receive and table the annual reports for 1974-75 and 1975-76? Is the delay due to the funds or the Department?

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

– In response to the question asked by the Leader of the Opposition I did make inquiries and a copy of the report is now in my hands.

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

-For which year?

Mr HUNT:

-For 1974-75. I am making arrangements for that annual report to be tabled at the earliest opportunity. I have now sought a report for the year 1975-76 but it is not yet to hand. I do not think any fault lies with the private health funds. I understand that it takes some time to collate all the information from the private health funds. The Department has been as prompt in this matter as it has been able to be.

page 709

QUESTION

AUSTRALIA’S TREATY OBLIGATIONS

Mr ARMITAGE:
CHIFLEY, NEW SOUTH WALES

– My question is directed to the Minister for Defence. Did he say, when speaking after reviewing the 25th Battalion Royal Australian Regiment in Toowoomba on 22 August, that in any future conflicts Australia would not be involved alongside any big power and that Australians should understand that in future they are on their own? I therefore ask: Does the Minister regard the ANZUS alliance as vital for the future protection of Australia? If so, can he explain the rationale for his statement which so obviously conflicts with the stated policy of the Government in regard to the ANZUS treaty?

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

– I am sorry that the honourable member for Chifley is at some disadvantage because the premise upon which his question is based is simply not accurate.

Mr Armitage:

– Here is the transcript. Do you want me to table it?

Mr KILLEN:

– The transcript, my dear chap- I am not in the habit of using written speeches, as the honourable gentleman should well know. The honourable member for Hindmarsh is trying to interject. If he contains himself I know the truth will eventually reach him. What I said was that in the past Australia had always fought alongside a large provincial power. No such guarantee could be given about the future. As a consequence, Australia must seek ways of developing a greater measure of self-reliance. For myself, I would have thought it a superbly unexceptionable remark.

page 709

QUESTION

DISRUPTION OF AIR TRAFFIC

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

-I direct my question to the Minister for Transport. I refer to the disruption of air traffic throughout Australia over the past 3 days. Has the extreme and quite ridiculous action taken by air traffic controllers caused this disruption? What steps has the Government taken and what further steps will it take in this important matter?

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

-The House will know that a claim has been made by air traffic controllers for a 75 per cent wage increase, consequent upon a High Court decision that they say increases thenresponsibilities.

Mr Lusher:

– How much was that?

Mr NIXON:

– A 75 per cent increase has been sought. If granted it would put them on a par with pilots. They make the claim that their responsibilities are now equivalent to those of pilots. Yesterday and today I have said that it is a bit hard to compare the 2 responsibilities when one recognises that the job of an air traffic controller is to maintain the separation of aircraft at takeoff, landing and in the air whereas a pilot actually has to get an aeroplane up into the air safely, fly it in all sorts of weather and land it safely. I do not really think that it is fair to say the responsibilities are equal. Nevertheless, it may well be that the air traffic controllers deserve a pay increase. It is not for me to make the judgment. There are proper arbitral procedures that can be taken to have that judgment made.

I have been urging the air traffic controllers to go back to a normal work situation. I have noticed that I have company- some would describe it as good company- in that regard because I understand that Mr Hawke, the President of the Australian Council of Trade Unions, has followed my course of action and urged them to go back to normal work and to allow the proper arbitral procedures to take place. A meeting is presently taking place in Sydney. Hopefully that situation will eventuate.

page 710

QUESTION

CURRENCY DEVALUATION

Mr WENTWORTH:
MACKELLAR, NEW SOUTH WALES

-My question is directed to the Treasurer and is supplementary to a question asked of him by the honourable member for Petrie. I ask: Has the Treasurer’s attention been directed to the views expressed some days ago by Professor Sir Leslie Melville, the most experienced and respected Australian economist, advocating the devaluation of the Australian dollar as an essential element in Australia’s economic recovery? Does he recall that Sir Leslie Melville was for some decades the economist for the Commonwealth Bank and that he served on the Board of that bank when it exercised the functions of the Reserve Bank, and subsequently on the Board of the Reserve Bank? Does he agree that a man as experienced as that would not express such views publicly unless he considered it to be absolutely essential to do so and that he certainly would not express them irresponsibly? Has the Treasurer considered the possibility that overseas authorities who have endeavoured to dissuade him from this devaluation may not have been entirely objective, that is, that when they were offering him this advice they may have been looking to the trading interests of their own countries and not to the interests of Australia? In the circumstances, will he agree to keep an open mind -

Mr ACTING SPEAKER:

-Order! I suggest to the honourable member for Mackellar that he ask his question.

Mr WENTWORTH:

– I ask: In the circumstances, will the Treasurer agree to keep an open mind on this subject?

Mr LYNCH:
LP

-I have seen the views expressed by Sir Leslie Melville when writing in, as I recall, a recent edition of the Australian Financial Review. I can only say 2 things. In the first place I am not attracted to those views. In the second place the Government’s position on this question has been made perfectly clear and I have no need to add to it.

page 710

QUESTION

LEBANESE REFUGEES

Mr INNES:
MELBOURNE, VICTORIA

– Is the Minister for Immigration and Ethnic Affairs aware that many Lebanese refugees who have had their visas approved in Australia have been stranded for months in conditions of extreme economic and emotional hardship in cities all over the world and are unable to have their papers processed by our overseas officials? Will the Minister inform the House how many Lebanese refugees have actually arrived in Australia since December 1975? How many of those people have fallen within the normal entry criteria as either parents or children of Australian residents or persons with special occupational skills? How many persons who have been granted visas on compassionate grounds outside the normal guidelines have actually arrived in Australia?

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

– The honourable member has asked some detailed questions. I will treat them as a question on notice and provide him with an answer this afternoon.

page 710

QUESTION

INCOMES

Mr BAUME:
MACARTHUR, NEW SOUTH WALES

– I direct a question to the Treasurer. How do allegations that the Budget will reduce the real incomes of employees equate with Budget Statement No. 2, which states that real average earnings per employed person will remain approximately unchanged as a result of the Budget and that real disposable household income of Australians will increase because of lower rates of personal taxes and higher benefits? Is it true that Australian employees, on average, will be better off following the Budget?

Mr LYNCH:
LP

– It certainly is true that Australian wage earners will be better off at the end of this financial year than they were at the commencement of it. Page 26 of Budget Statement No. 2, to which the honourable member referred, states:

Real average earnings per employed person would remain approximately unchanged but, due to employment growth, aggregate real earnings would increase moderately. Given projected changes in personal taxes, cash benefits, and other components both average and aggregate real disposable household income would increase at a faster rate than the real earnings component.

Suggestions to the contrary by the Leader of the Opposition are not substantiated.

page 710

QUESTION

MEETING AT MONASH UNIVERSITY

Mr GARRICK:
BATMAN, VICTORIA

-Is the Prime Minister aware that when the Minister for Business and Consumer Affairs addressed a meeting at Monash University last week more than 100 police, with 22 cars as well as buses and brawler vans, were present? In a time of budgetary frugality, does he believe that this sort of deployment of government resources is necessary, in light of the fact that there was no demonstration and only SO people, twenty being policemen, attended? Is he aware that many people regard such shows of strength as intimidatory?

Mr MALCOLM FRASER:
LP

– I think many people are well aware that what was done on that occasion was well done. That kind of activity would not be quite so necessary if the honourable gentleman, amongst others, did not participate in certain endeavours such as he did outside Northcote Town Hall on one occasion during the last election campaign, when he did everything he could to make sure that demonstrators became even more violent.

Mr Garrick:

- Mr Acting Speaker, I rise on a point of explanation.

Mr ACTING SPEAKER:

-Order! There will be no explanation. The honourable gentleman asked his question and received a reply from the Prime Minister.

Mr Garrick:

– I take a point of order. The Prime Minister said I was responsible -

Mr ACTING SPEAKER:

-Does the honourable member for Batman claim to have been misrepresented?

Mr Garrick:

– Yes, I do. Everyone in the House heard the Prime Minister say that I was responsible for violence at a certain place. That is completely untrue. The truth is that I made repeated attempts -

Mr ACTING SPEAKER:

– Order! I suggest that the honourable member resume his seat. He has made his personal explanation and there is no point of order. He will resume his seat. I call the honourable member for La Trobe.

Mr Garrick:

– I ask that those remarks be withdrawn. They are completely untrue.

Mr ACTING SPEAKER:

-Order! I call the honourable member for La Trobe.

Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP

- Mr Acting Speaker, the honourable member for Batman is seeking to attract your attention with a point of order. He is claiming that he was insulted, and he is asking for an apology from the Prime Minister. You are abstaining from hearing him.

Mr ACTING SPEAKER:

– I point out to the honourable member for Hughes that the honourable member for Batman claimed to have been misrepresented. I gave him an opportunity to make a personal explanation. I then suggested that he resume his seat. The Chair is not in a position to say what happened in a particular situation. If the honourable member for Batman feels that an incorrect statement has been made then I would suggest that at the close of question time he seek leave to make a statement to the House about the situation to which he has referred.

Mr Garrick:

– With respect, Mr Acting Speaker, all I am asking is that those remarks be withdrawn because they are completely offensive and untrue. We cannot, in a personal explanation, conduct a 20 minute dialogue about what happened at a particular time. The remarks made about me maligned my character. It was said that I was responsible for creating disorder and violence at a particular time. That statement maligns my character and is completely untrue. I would ask that those words be withdrawn.

Mr Yates:

- Mr Acting Speaker, could you advise the House whether it is normal for an honourable member to be permitted to make a personal explanation while question time is in progress or should that explanation be made after question time? All honourable members need question time.

Mr ACTING SPEAKER:

– I point out to the honourable member that in the normal course of events when an honourable member claims to have been misrepresented the personal explanation should be made as close as possible to the time of the alleged misrepresentation. It is impossible for the Chair to know what happened at a particular event. When a member requests that remarks relating to him personally be withdrawn, it is the practice for the Chair to ask that the remarks be withdrawn. In the circumstances, I ask the Prime Minister to withdraw the remarks relating to the actions of the honourable member for Batman at a particular time.

Mr Malcolm Fraser:

– I withdraw the remarks, Mr Acting Speaker. That does not alter the facts of what happened.

Mr Armitage:

– I raise a point of order, Mr Acting Speaker. I submit that the attitude of the Prime Minister is a reflection on the Chair. You called upon him to withdraw his remarks and he gave a qualified withdrawal, not an unqualified withdrawal. I think you should call upon him to make an unqualified withdrawal.

Mr ACTING SPEAKER:

– In regard to the point of order raised by the honourable member for Chifley, I have said on three occasions that it is impossible for the Chair to make a decision in relation to what happened at a certain event. I was not present. The honourable member for

Batman requested the withdrawal of certain remarks. I asked the Prime Minister to withdraw the remarks which the honourable member for Batman said were offensive to him. The Prime Minister withdrew the remarks and made a comment afterwards which may or may not relate to the incident. In the circumstances, I suggest that the Prime Minister withdraw the remarks referred to without any other comment.

Mr Malcolm Fraser:

- Mr Acting Speaker, I withdraw the remarks.

page 712

QUESTION

AUSTRALIAN ASSISTANCE PLAN

Mr BAILLIEU:
LA TROBE, VICTORIA

– My question is addressed to the Prime Minister. Has he advised the States that the Government considers Australian Assistance Plan type programs, being programs primarily of a local community nature, are best funded and administered by State governments? Do the very large increases to the States in untied revenue assistance grants provide those States wishing to continue AAP-type programs with the necessary funds? Finally, are the untied increases to both State governments and local governments a direct result of this Government’s federalism policy?

Mr MALCOLM FRASER:
LP

-The very large increase of $75m to local government- taking the total grant to $ 140m- is a direct result of the federalism policy of the Commonwealth. Over the last few days local government bodies in Victoria have been notified of the sums coming through the States from the Commonwealth. I believe that most local governing bodies are very pleased at the result. It will help to achieve a dual purpose of enabling local governments to keep rates down but at the same time it will give local governing bodies greater flexibility in supporting local programs which are particularly in the interests of their own areas. Australian Assistance Plan type programs of social development are ideally suited to local funding or to State government funding because the people who are closest to those affected by the programs can in fact influence their direction. That is a view that the Government has expressed.

In addition it ought to be noted that the Commonwealth Government, again as a result of the new federalism proposals, has increased the untied tax reimbursement payments to the States this year by 2 1 per cent, and that is a direct result of revised procedures and formulas. That rate of increase is very much more than the rate of inflation. It will give greater real resources to the States in an area which is completely under thenown control. Therefore it is a matter for the

States to decide whether to fund AAP-type projects or whether they seek to use those funds in some other way which the honourable gentleman might not judge as being so admirable.

page 712

QUESTION

CURRENCY DEVALUATION

Dr J F Cairns:
LALOR, VICTORIA · ALP

-I ask the Treasurer In view of the statements that have been made about devaluation, both by the honourable member for Oxley and by Sir Leslie Melville, and believed by very many other influential people to be relevant, and in view of the fact that in answering 2 questions the Treasurer did not clearly state the Government’s position about devaluation, will he now say whether or not the Government intends to devalue? If it does not, does it intend to seek to borrow $240m overseas? If the purpose of that is not to avoid devaluation, what would be the purpose of the loan?

Mr ACTING SPEAKER:

-Order! I put forward the view that the question relating to whether or not the Government will devalue is seeking an expression of government policy. I would say that the other part of the question in relation to the loan is in order. The Treasurer can answer the question as he sees fit.

Mr LYNCH:
LP

– Of course the Government does not intend to devalue. I simply direct the attention of the honourable gentleman to the many statements that have been made by me and other senior Ministers about that question. In fact, I intend to say no more in this House in response to questions from either side of the Parliament in relation to that matter. However, I take the opportunity to refer briefly to the Government’s decision to initiate negotiations for a public bond issue on the Eurodollar market for an amount of up to $US30Om. As I think I said in the Press statement which I issued last night, that loan followed successful overseas borrowings by the Government this year in Germany, Switzerland, the Netherlands and New York and does no more than reflect the Government’s view that an active overseas borrowing policy on official account is appropriate.

As the honourable gentleman has raised that question and because of its public interest, I might just expand on my answer, with your leave, Mr Acting Speaker, by referring to unfounded comment which has been made about the loan in this morning’s Press. There was a comment that there was some scepticism among certain European observers about the magnitude of the issue, as if the Government in fact was not to receive the amount of money involved. I want to say quite clearly here that the amount agreed upon with the managers of the loan will be firmly underwritten. There will be no question of the amount not being provided to Australia. There was a second comment in one of this morning’s newspapers which referred to the Government’s overnight reaction or to rapid government reaction. That is a nonsense comment, because the discussions with the underwriters and managers have been in train for months and the reference betrays total ignorance of the mechanism of international borrowing. I might also say that there was a further reference, which was even more unsubstantiated, if that is possible, to the fact- I am referring to one newspaper- that the terms for the Australian issue are not regarded as -

Mr Hayden:

– As this obviously is a quite public document from which the Treasurer is quoting, I propose that the document be tabled.

Mr ACTING SPEAKER:

– I ask the Treasurer whether he is reading from a document?

Mr LYNCH:

– The honourable gentleman, in querying the document, ought to understand that there are a number of matters concerned with loan raising that do concern the Loan Council. This is the file about the loan in question. Of course some of the matters mentioned in it are confidential. Unlike that group opposite this Government believes in a traditional and businesslike approach to overseas loans.

page 713

QUESTION

REPATRIATION BENEFICIARIES

Mr KING:
WIMMERA, VICTORIA

– I address my question to the Minister representing the Minister for Repatriation. I refer to a statement by the Minister for Repatriation in which he said that repatriation beneficiaries would continue to receive repatriation treatment at no cost to the individual or at half cost for a family unit. I ask the Minister: If a married ex-serviceman in receipt of full repatriation benefits wishes to have more than Medibank standard coverage for his family, does the exserviceman sacrifice the privilege of full repatriation benefits without cost? I stress the last words, without cost.

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

– I think on a matter of detail such as that it would be better if I referred it to my colleague in another place. I will do that and try to get a quick answer for the honourable member.

page 713

QUESTION

DENTAL AND PROSTHETIC BENEFITS IN MEDIBANK

Dr JENKINS:
SCULLIN, VICTORIA

-I ask the Minister for Health: What suggestion or direction has the Minister given to Medibank for the inclusion of dental and prosthetic benefits such as spectacles in its schedules to allow it to compete on equal terms with private health funds?

Mr HUNT:
NCP/NP

– I have given no instructions whatsoever to the General Manager or to the staff of Medibank Private. They are operating in the private health insurance field in a competitive manner and it would be quite improper for the Minister for Health to be instructing Medibank Private on what its schedules should provide. Naturally, I have had discussions with the General Manager about the benefits that are available. The General Manager and the staff of Medibank Private are constantly meeting to review the benefits that will be provided in the course of time. It will probably not be until 12 months of operation is completed that Medibank Private will be able to determine the most economic package that it can offer to the Australian people.

Medibank Private is highly competitive with all the health insurance funds for the basic health and hospital cover. Some of the other funds have, of course, offered more at a lower price for the higher tables but 80 per cent of the Australian people who privately insure will insure for shared room accommodation. Medibank Private is highly competitive in that area. There was some criticism that Medibank Private was competing unfairly with the private funds. This is not true. We are competing, yes, and if our competition means that some of the private funds will have to use some of their reserves to compete with Medibank Private over a period of time, that will be in the public interest. Medibank Private is offering a very competitive package indeed.

page 713

PUBLIC SERVICE BOARD

Mr MALCOLM FRASER:
Prime Minister · Wannon · LP

– Pursuant to section 22 of the Public Service Act 1922-1975 I present the Annual Report of the Public Service Board for the year ended 30 June 1976.

page 713

ROYAL COMMISSION ON HUMAN RELATIONSHIPS

Mr STREET:
Minister for Employment and Industrial Relations · Corangamite · LP

– For the information of honourable members I present an Interim Report of the Royal Commission on Human Relationships dated 30 January 1976.

page 713

TRADE PRACTICES COMMISSION

Mr HOWARD:
Minister for Business and Consumer Affairs · Bennelong · LP

– Pursuant to section 171 of the Trade Practices Act 1974-1976 I present the Annual Report of the Trade Practices Commission for the year ended 30 June 1976.

page 714

TRADE PRACTICES ACT REVIEW COMMITTEE

Mr HOWARD:
Minister for Business and Consumer Affairs · Bennelong · LP

– For the information of honourable members I present the report of the Trade Practices Act Review Committee dated August 1 976.

page 714

AUSTRALIAN EDUCATION COUNCIL

Mr VINER:
Minister for Aboriginal Affairs · Stirling · LP

– For the information of honourable members I present a report on the meeting of the Australian Education Council held in Cairns during 8 and 9 July 1976.

page 714

PERSONAL EXPLANATIONS

Mr LLOYD:
Murray

– I seek leave to make a personal explanation to correct a quotation I used in the Grievance Debate on 26 August.

Mr ACTING SPEAKER:

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

Mr LLOYD:

– In that debate in support of the replacement of the present paid maternity leave provisions for Commonwealth employees and certain other people with a paid maternity benefit for all pregnant women in Australia I referred to an article in the Melbourne Age of the same day headed ‘Academics ride the learning boom in the new cloisters of paradise’. I quoted from that article a statement to the effect that the Prahran College of Advanced Education provided at least 24 weeks maternity leave on full pay. This was not correct. I have been assured by Mr McMahon, Secretary of the Federation of Staff Associations of Australian Colleges of Advanced Education, and Mr Armstrong of the Prahran College that the period is 12 weeks on full pay, the same as for Commonwealth employees. I hope this corrects any misunderstanding.

Mr ARMITAGE:
Chifley

-Mr Acting Speaker, I seek leave to table a document which is a transcript of a tape recording prepared by the Parliamentary Library of an item taken from the 7.4S a.m. Australian Broadcasting Commission news program on 23 August 1976 which indicates that the Minister for Defence (Mr Killen) -

Mr ACTING SPEAKER:

– Order! The honourable member has sought leave to table a document. Is leave granted?

Mr Sinclair:

– No.

Mr ACTING SPEAKER:

-Leave is not granted.

Mr CALDER:
Northern Territory

-I wish to make a personal explanation.

Mr ACTING SPEAKER:

-Does the honourable member claim to have been misrepresented?

Mr CALDER:

-Yes. In the Bulletin of 4 September there is an article headed ‘Neglecting the national estate’. The writer quoted something that I said on this matter. It reads:

If the previous Government had paid more attention to keeping down inflation and unemployment, to supporting the primary industries and the exports which earn the money, which would have given it the means to pay for these high ideals, -

I was talking about financing the national estate- instead of supporting the Coombes report, company bashing, business bashing, private enterprise bashing and so many of the long-hairs, bludgers, no-hopers and nonworkers around the country, it might have had the money and it might still be in government.

What the writer did not say is that if the previous Government had behaved differently when it was in office we would have had the money to do these things. The writer went on to say:

At least we might be thankful that Mr Calder left the poofters out of - 1 apologise for leaving him out- his litany of villains. But, laughable as his phobias are, they do at least provide some explanation for the present Government’s attitudes toward the Australian heritage.

The misrepresentation is that during my speech I quoted what the Minister for Environment, Housing and Community Development (Mr Newman) had said. He said:

All commitments arising from programs in previous years will be met.

In the same speech I quoted the Chairman of the Australian Heritage Commission as saying:

Amendments to the Act introduced by the Prime Minister 2 weeks ago had not removed or affected any of the important roles . . . of the Commission.

So I refute the imputation in the article where the writer concluded with the words;

Calder’s attitude makes it explicit in sneers about ideals and long-hairs. It all chimes in well with the Government’s basic philosophy.

My quotations from Hansard make nonsense of what the writer has said.

page 714

QUESTION

WAGES POLICY

Ministerial Statement

Mr STREET:
Minister for Employment and Industrial Relations · Corangamite · LP

– by leave- It is of major concern not only to the Government, but also to individual rank and file workers and the community generally, that orderly methods of wage fixation are under attack by certain elements within the trade union movement. In its decision in the June quarter wage indexation case, the Australian Conciliation and Arbitration Commission expressed apprehension that industrial action to obtain wage increases and other benefits outside the Commission’s wage indexation guidelines was placing the Commission’s orderly system of wage fixation in jeopardy. In its decision in the hearing in relation to the June quarter, the Commission said:

For the economy to recover, two inter-related matters, namely, inflation and unemployment must improve. The whole economic situation gives cause for grave disquiet but in particular we are concerned with the present level of unemployment which touches not only the economy but also industrial relations.

We have reached the same conclusion as was reached on 28 May that*. . . we should proceed cautiously in order to avoid, if possible, prolonging unduly by our decision the hardship to which a large section of the community including wage and salary earners have been exposed ‘.

Economic recovery and a return to full employment is dependent on a policy of wage restraint. The Government’s wages policy has been devised with these objectives very much in mind and the purpose of this statement is to explain the Government’s policy in this vital area and the reasons underlying it.

Wages Policy Considerations

I want to make it very clear that the Government’s objective is to create an economic climate that is conducive to the raising of living standards of all Australians. Its objective is very different from that of militant trade unionists. They are prepared to use their industrial muscle to win gains for their own members at the expense of everyone else. Most regrettably, they show no concern for the unemployed nor, indeed, for their fellow trade union members who continue to be priced out of their jobs.

In order to improve living standards for all Australians economic stability has to be restored and the unacceptably high level of unemployed reduced. As the Government has stressed in wage indexation hearings for the December, March and June quarters, and as embodied in the coherent thrust of our policies since coming to office, the single most important step in creating more jobs and restoring stable conditions in which a sustainable improvement in living standards will occur is a reduction in the present rate of inflation.

The nexus between inflation and unemployment although becoming increasingly understood is not sufficiently appreciated by the trade union movement or, for that matter, the Opposition. Yet, the evidence of the existence of this nexus is all about us. In the 2 years to the December quarter 1974, real male award wage rates rose by the staggering figure of 16 per cent. Bearing in mind that the long-term annual average is approximately 3 per cent, it is evidence that the equivalent of a little over 5 years normal growth in real award wage rates was crammed into two.

Since there was no commensurate increase in the capacity of the economy to sustain such an accelerated growth, and since Government activity was not cut back- in fact the reverse was the case- business incomes and private investment bore the brunt of the phenomenal increase in real award wages. As a result, the last several years have been characterised by high levels of inflation, reduced profitability, uncertain business and consumer confidence and an unacceptably high level of unemployment.

As to measures needed for economic recovery, there is no disagreement between the Government on the one hand and the unions on the other that increased consumption will play a fundamental role. Clearly, however, there is disagreement as to how increased consumption is to be brought about. The unions’ and the Opposition’s recipe for economic recovery is to maintainperhaps even to increase- the level of real wages at the present time. In the Government’s view this is dangerously shortsighted and simply will not work. The Government wants to bring about a situation in which growth in real wages can be sustained.

In present circumstances, a 1 per cent increase in wages can be expected to add something like $100m each quarter to the total wage and salary bill of the country. The employment effect of the higher unit labour costs resulting from such an increase will vary from employer to employer, but broadly speaking employers may respond in one or more of the following ways: By raising their prices; by accepting lower profit margins; and by restructuring production methods so that unit production costs do not rise.

There is every possibility that those employers who stand to gain most from a price rise are our overseas competitors- in which event any shift in sales certainly does have adverse employment effects as far as Australia’s labour force is concerned, which is what primarily concerns this Government. Evidence strongly suggests that kind of thing is already happening and Australian companies are being forced to export jobs overseas. This trend could accelerate if inflation is not brought down quickly and substantially. Local investment decisions tend to be adversely affected too. While these decisions necessarily have to include allowances for risks, high inflation introduces a new and additional type of hazard. As a result, in periods of high inflation all but the most favourable capital projects are apt to be deferred or abandoned altogether.

I have indicated a second way in which employers may respond to an increase in unit labour costs: They may accept lower profit margins. But this, it should be noted, will also have the effect of discouraging investment, both because the incentive to invest will diminish and also because, with depleted internal funds, there will be less ability to invest. And any lowering of investment will mean a decline in job opportunities as well as in the longer run a diminished capacity of our economy to provide increases in real incomes, which brings us back again to the close cause or connection between wage increases and unemployment.

Employers, admittedly, have one further way in which they may respond to an increase in unit labour costs. In an effort to keep unit production costs down, they may take steps to rationalise their labour requirements by restructuring production operations along less labour-intensive lines. In other words, they may do what they can to substitute capital for labour. But this too leads to unemployment- and, moreover, unemployment of a kind that it is not going to be easy to remove when the economy recovers. In summary, irrespective of the reaction of employers to increased labour costs, in the current Australian environment increased labour costs will impede the availability of new employment opportunities.

Since the previous excessive increase in real wages contributed significantly to our present economic and unemployment problems, an unwinding of that excessive increase is a necessary condition for a return to full employment. I stress that there is no choice in this matter. If real wages are not temporarily reduced by the application of orderly wage fixing principles, the market place will do it more harshly and take longer, with continued unemployment at unacceptable levels. As the Commonwealth submitted to the Commission in the June quarter wage indexation hearing, once the unwinding of excessive real wage gains has occurred, there is no reason why real wages should not, once again, begin to increase in line with productivity increases as has always been the case for long periods, in a more or less fully employed economy. The short-term costs of a temporary reduction in real wages will be far outweighed by the benefits of a more rapid return to full employment and sustainable economic growth.

Overseas Developments

Wage and salary earners in many overseas countries are coming to realise the adverse effects which excessive wage increases are having on the economy in general and on unemployment in particular, and are taking positive steps to moderate the growth in wages. Let me cite a few examples: In Germany annual wage settlements struck in early 1976 average slightly less than 5Yi per cent. In the United States of America the Administration, on the basis of information available on forthcoming negotiations, has confidence that wages in the economy as a whole will rise by less than 10 per cent this year. In Japan, the 1976 spring wage offensive produced wage settlement averaging less than 9 per cent compared with 13 per cent in 1975 and 33 per cent in 1974.

In New Zealand in June 1976 there was a wage increase of 7 per cent or $7.00- whichever was the less- with no further increases to be made for 12 months. On 17 August the New Zealand Prime Minister announced a price freeze to operate until the end of 1976 to complement the freeze on wages.

In the United Kingdom the Trade Unions Congress has agreed to a second year of voluntary pay restrictions. The TUC has accepted for the year beginning 1 June 1976 a pay limit equivalent to a wage and salary increase of about 4Vi per cent on average. This is against the prospect that within that period double figure inflation will continue, although at a much reduced rate. Taking account of tax reliefs, the overall effect of the agreement for someone on about average earnings and receiving a 414 per cent pay increase would be equivalent to a money wage increase of approximately 8 per cent. Nevertheless, there will be a slight fall in real disposable incomes, the magnitude of which will depend on the rate at which prices do increase during the year. It is of interest that the United Kingdom White Paper The Attack on Inflation: The Second Year states:

Some further reduction in the real value of take-home pay (affecting single people more than families with children) is a necessary condition for reducing unemployment and setting the balance of payments right; but the reduction in the real value of the average pay packet should be a good deal less than that experienced in the first half of 197S before the £6 pay policy was introduced . . .

People in the countries I have mentioned, including the great majority of wage and salary earners, have come to realise that it is contrary to their interests to seek unsustainable rates of money wage increases. As a result of community acceptance of measures needed for economic recovery, including the creation of increased employment opportunities, rates of earnings and price increases in most of the countries are approaching a level which is consistent with economic and financial stability.

The Australian Situation

It is because of the desirability of a temporary reduction in real wages to hasten economic recovery and the return to full employment that the Commonwealth has argued in the 3 wage indexation hearings held so far this year that wages be adjusted only partially for increases in the consumer price index. In the hearing following the publication of the December quarter CPI the Government submitted that wages should be adjusted by about half the 6.4 per cent CPI increase in the combined September and December quarters. As the House will be aware, the Commission granted full wage indexation of 6.4 per cent covering the 2 quarters. In the hearing related to the March quarter CPI increase the Commonwealth put a number of options before the Commission, stating a preference for full indexation of the minimum wage and the addition of the resulting money amount to all wage rates. It is of interest that this was, in essence, the method of adjusting wages for prices before automatic wage indexation was discontinued in 1 953. This method of indexation would have increased the national wages bill by a little more than a half of full wage indexation. The Commonwealth estimated that this level of wage indexation would have reduced inflation by mid- 1977 to a level comparable with that of our major trading partners.

In its decision, the Commission recognised the implications of indexing wages fully for increases in the CPI. The Commission said:

The evidence before us on this occasion that the distinct possiblity that full indexation would keep the inflation rate close to 13 per cent for some time to come, with the prospect of economic stagnation at a high level of unemployment, makes it necessary for us to consider the urgency of making a more positive contribution to moderating cost increases . . .

After referring to the difficulty of making accurate projections of price movements, and of predicting the future course of the economy, the Commission went on to say: . . . but these expectations do suggest that we should proceed cautiously in order to avoid, if possible, prolonging unduly by our decision the hardship to which a large section of the community, including wage and salary earners, have been exposed.

In the event the Commission awarded a 3 per cent increase in wage rates up to $125 a week, which at the time was about the average male award wage rate and a S3.80 a week increase above that level. The effect of this decision was to increase the national wages bill by about 70 per cent of the increase that would have resulted had wages been indexed fully for the CPI movement.

In the hearing in relation to the June quarter the Commonwealth again put before the Commission various options for indexing wage rates for the June quarter CPI increase and expressed a preference for overall indexation of about 30 per cent which could be achieved in one of several ways:

Tapering percentage increases, cutting out at the level of $170 a week (approximately the current level of average wage earnings) with no adjustment for higher rates of pay.

A flat amount of $1.20 a week up to $170 a week.

A flat increase of $1.00 to all wage and salary earners above the minimum wage.

In the event, the Commission applied the June quarter CPI increase of 2.5 per cent to the lowest wage in the Metal Industry Award for Melbourne, and the resulting $2.50 was payable to persons receiving up to $166 a week. For those earning more, the increase was 1.5 per cent. The effect of this decision was to increase the national wages bill, in percentage terms, by only a little less than the increase that resulted from its March quarter increase.

The Commission’s decisions in the March quarter and the June quarter wage indexation hearings were a step in the right direction. If continued long enough, indexing wages at this level would eventually wind down inflation to an acceptable level, but as the Treasurer (Mr Lynch) stressed in his Budget Speech, we need to move further and faster. The sooner wages and profits return to the more normal relationship the sooner will job prospects improve. The Treasurer pointed out that the community was faced with a choice: On the one hand, the required downward adjustment in the wages share could occur slowly via a high level of unemployment persisting for a long period; or, on the other hand, the same adjustment could take place more quickly, less painfully and with much less cost in terms of idle resources and production forgone, if the wage determining authorities continued to reject full indexation of wages for past price increases and if the Commission’s principles for determining other wage increases continued to be observed.

The Opposition’s Approach

When the Opposition was in Government it recognised the need for a reduction in real wages but, except for a brief period, it regrettably did not act with the courage of its convictions. In 1974, it submitted to the Conciliation and Arbitration Commission in national wage case proceedings that year, that a system of wage indexation be introduced which would provide indexation as a flat amount across the board derived by application of the movement in the consumer price index to the minimum wage. This would be equivalent to indexing wages by approximately a half. In the proceedings which led to the indexation package of 1975 the Labor Government proposed a form of plateau indexation based on seasonally adjusted average weekly earnings. The effect of this would be approximately equivalent to indexing wages by 85 per cent In making its submission the then Federal Government told the Commission that the restoration and maintenance of full employment would be jeopardised if there were not a responsible moderation in the rate of wage increase.

In the subsequent case in respect of the June 1975 quarter the Labor Government pressed for full percentage indexation but also stated that savings in the wages and salaries bill deriving from forms of partial indexation would have the benefits of stimulating investment and increasing employment opportunities. The Labor Government noted that its previous scheme of plateau indexation at average weekly earnings would involve only marginal savings but went on to say: ‘Of course, had the Government selected a plateau lower than average weekly earnings the potential economic advantages would have been greater still’. That is a direct quote from the previous Labor Government’s submission. Despite a clear acknowledgement of the economic benefits, including an increase in employment opportunities, the former Government proceeded to argue for full percentage adjustment of wages and salaries in accordance with the consumer price index increase.

This then is the fundamental difference between the approach of the previous Government and the present Government’s attitude. The previous Government, even in the face of business recession and an alarmingly high rate of unemployment still opted for full percentage indexation. Regrettably the same is still true of some State governments who seem blind to the consequences of their policies. The present Government has been prepared to take the action which it recognises and the previous Government recognised is in the interests of the economy.

The Trade Unions’ Approach

The trade unions’ approach to wage indexation has also undergone changes. For many years they fought for a return to automatic adjustments to the basic wage for price movements. To use modern terminology they sought plateau indexation. When the re-introduction of some form of indexation seemed a possibility, the Australian Council of Trade Unions in 1974 sought indexation as a full percentage up to the statistician’s male average award rate and a flat money increase to award rates above that level. Since then the ACTU has sought full percentage indexation. Moreover, despite its recent acknowledgement that wage restraint is necessary in these times of economic difficulties, it has condemned the Conciliation and Arbitration Commission for not awarding full percentage indexation across the board, irrespective of income; yet it says that this does not mean that the ACTU has abandoned the principles of egalitarianism.

Furthermore, in criticising the Commission’s decision in respect of the June 1 976 quarter consumer price index increase the ACTU does not acknowledge this statement of the Commission:

For the present quarter there is no doubt that consumers generally will have a higher disposable income and this will apply whatever we do with indexation as a result of this decision. The reason for this situation is the twin benefits applying from 1 July 1976 of full tax indexation and family allowances.

The family allowances will benefit low income families and, as the Commonwealth advised the Commission in the last wage indexation hearing, the implementation of full personal tax indexation will mean that disposable incomes in the community this financial year will be some $ 1,050m higher than would have been the case had last year’s rate scale and rebate allowances continued to apply.

Industrial Disputes

Nor does the ACTU acknowledge the Commission’s very strong and very direct comments on the level of industrial disputation and how the incidence of stoppages acted as a factor to reinforce the economic arguments for less than full indexation. The Commission’s concern over the current high level of industrial disputes is shared by the Government and, I have no doubt, by the community generally. I would hope that it is shared also by the Opposition. The latest statistics available indicate that in the first 5 months of this year 800 000 working days were lost in 925 industrial disputes. Although these figures are an improvement on the 1 200 000 working days lost in 1106 disputes for the comparable period last year, they are alarmingly high. Even more disturbing from the point of view of the Commission’s wage fixing principles is the high proportion of working days lost attributable to stoppages over wage demands. For the March quarter 1976, 47 per cent of working days were lost because of disputes over wages compared with 33 per cent in the March quarter 1975. The ACTU Executive cannot attribute the rise in wage disputes in the March quarter 1976 to decisions of the Commission, since in wage indexation cases up to that time the Commission had indexed wages fully for movements in the consumer price index.

The small movement in wage rates outside wage indexation is often relied on in support of arguments that there has been substantial compliance with the Commission’s wage indexation guidelines. However, trade unions that make extravagant claims and attempt to coerce employers to concede to them, cannot take credit for compliance with the guidelines if their efforts are not successful. A would-be bank robber is not blameless just because he is not successful.

Pay is not the only area subject to a high level of industrial disputation. There has also been a serious increase in the incidence of claims in the non-wage area. The most disturbing of these are those directed at achieving a reduction in working hours. Less than 2. weeks ago we witnessed people in the State of Victoria severely inconveniencedwith a huge wage loss and considerable personal discomfort- while electricity workers struck for 48 hours over claims for a 3 5 -hour week. This was the culmination of overtime bans and other work limitations which had been in force since the beginning of June. I find it incredible how anyone can seriously support claims for a reduction in working hours at a time when we are faced with such serious economic difficulties. Such claims must be seen for what they are: They represent aggressive and selfish attempts by the militant few to gain advantages for themselves at the expense of the community and of workers not as strategically placed as themselves.

A no less alarming development in the present precarious economic situation is the incidence of disruptions to normal working, which appear deliberately designed, with callous disregard for the convenience and interests of the community, to cause damage to the economy. I refer here to the politically motivated stoppages such as those on Medibank and the stoppages we have experienced in the wool industry, on the waterfront and in the power industry.

Concluding Remarks

The Government, in seeking partial wage indexation in current economic circumstances, has acted entirely within the Commission’s wage fixing principles. The fact that the Commission awarded partial indexation in the last 2 cases clearly demonstrates the Commission accepts that partial wage indexation is in accordance with its guidelines. Charges of non-conformity with the Commission’s wage fixing principles can rightfully be laid at the door of those union leaders who threaten to abandon the principles if the Commission does not bow to their bidding. These leaders have, moreover, demonstrated a total lack of concern for their fellow workers and the community. It is they who must take responsibility if high unemployment persists. The Government, for its part, has never pretended that the task ahead would be easy. It will continue to act responsibly in the interests of all Australians, as it was elected to do. I present the following paper:

Wages Policy- Ministerial Statement, 7 September 1976

Motion ( by Mr Eric Robinson) proposed:

That the House take note of the paper.

Mr WILLIS:
Gellibrand

-One thing that the Minister for Employment and Industrial Relations (Mr Street) did not tell us is why he delivered the statement he has just made. I suggest that the real reason for making this statement is not so much to explain the wages policy of his Government to the people of this country or to the Parliament; rather it denotes a move by the Government to undertake an attack on the trade union movement. This has already been made evident in this Parliament to this stage. This is the second sitting week in a row in which we have started proceedings after question time by an honourable member from the Government side getting up to attack the unions for being irresponsible and being responsible for the state of the economy.

This is an exercise to draw attention away from the fact that this Government is fumbling the economic ball. This Government is not bringing about the economic recovery which it said it would produce. The Liberal and National Country Parties achieved government, or seized government, largely on the rationalisation that it would be able to manage the economy far better than the Labor Government was doing. The results to this stage do not show that that has happened in any way. In fact, they show that the economy is getting far worse. All the indicators show that the economy is heading downwards rather than that any great recovery is under way.

The reason for these attacks on the trade union movement is to put the responsibility for the present economic position back on to the trade union movement and away from the Government.

The Opposition utterly rejects this kind of shabby exercise. We say at the outset, after looking at the details of this statement, that the Minister firstly reiterates the point which has been made by various Government spokesmen that the Government places the question of the reduction of inflation first. We do not disagree that the rate of inflation must be reduced. We agree that it is important that we should have a lower rate of inflation. The argument is not about that. The argument is about how that is to be achieved. Here the Opposition differs markedly from the Government in relation to its antiinflationary policy. Although the Government continually says that reducing the rate of inflation is its No. 1 priority, it nevertheless does things for ideological reasons which increase the rate of inflation and therefore presumably conflict with its basic policy. I refer specifically to the re-arranged health insurance proposals which will come into operation from 1 October. By forcing 50 per cent or more of the people out of Medibank the Government will increase the consumer price index by 2 per cent. This, added to the underlying rate of inflation of about 3 per cent in the December quarter, will result in an inflation rate of more than 5 per cent in the December quarter of this year. That action will exacerbate inflationary expectations in this country. It runs totally counter to what the Government says is its basic economic philosophy. So why the hell is the Government doing this?

The Government’s wages policy is totally inappropriate and misconceived. The system of wage indexation was working extremely well before this Government came to office. There had been full acceptance of it by the trade union movement. The results of the introduction of wage indexation had been to reduce substantially the rate of increase in wages in this country. In the 12 months to March 1975 wages increased by 27 per cent. In the next 12 months during which wage indexation applied the increase was 13 per cent. That was a dramatic reduction in the rate of increase in wages. That occurred with full percentage indexation applying. At the same time, of course, there was a substantial reduction in the rate of inflation- from 1 8 per cent in the 1 2 months to March 1975 to 12 per cent in the 12 months to March 1976. So the application of full percentage wage indexation was working extremely well and was bringing down the rate of inflation in this country. It was part of a social contract that we of the Australian Labor Party were able to achieve with the unions and to persuade the Arbitration Commission to adopt. It was a great success for this country.

This Government achieved office saying that it would support wage indexation, but it then breached faith with the people of this country and the unions. Before the election this Government gave the full impression to everyone that it would support wage indexation. Let me give honourable members some examples. The Prime Minister (Mr Malcolm Fraser) said in his election speech:

Our reforms will maintain the purchasing power of wages and ease the pressure for excessive wage demands.

I draw attention to the use of the words ‘maintain the purchasing power of wages’. That is exactly contrary to what the Government is now saying is its wages policy. Its wages policy now is to reduce the purchasing power of wages- that is what it is about. That is totally contrary to what the Prime Minister told this country before the election was the wages policy of the Liberal and Country Parties. The Prime Minister also said that the Liberal and Country Parties supported the principles of wage indexation. He said that they supported the wage indexation agreement. Finally he went to the full extent of saying in his election speech that the Government will support wage indexation.

That was an absolutely explicit statement. That clearly gave the impression to the whole of this country that the Liberal and Country Parties, if elected to office, would support full percentage wage indexation. But that is not what it has done. When the crunch came at the end of January and the Government had to make up its mind what its approach would be at the wage indexation hearing that was coming on in February concerning the December quarter consumer price index figures the Government first of all made a decision at the Economic Committee of Cabinet level that it would support full wage indexation. Then somebody got to the Prime Minister and he called a full meeting of the Cabinet and changed the decision to one of support for only half of that amount. Since then the Government has been persisting with the argument that there has to be something less than full wage indexation. So we say that there has been a total breach of faith with the people and the trade unions on the matter of wage indexation.

The wages policy of this Government is economically inappropriate and industrially naive. In regard to the economic side of it, it is inappropriate for a number of reasons. Firstly, the Government says that it is necessary to reduce real wages so that there can be a transfer of income from wage earners to profits and it says that that has to happen because the profit share is too low and that unless it is increased businesses will not invest and we will not have an economic recovery.

Mr Baillieu:

– Do you agree?

Mr WILLIS:

-I will explain my attitude exactly. Firstly, let me say that we are in the midst of the worst recession for some time- for many decades- and the profit share is already 83 per cent of its normal level. The gross operating surplus of companies was 14.4 per cent of the gross domestic product in the June quarter of this year. Its average over the 4 years to that point was 17.2 per cent. Those figures are contained in the Budget Papers. It is at 83 per cent of its normal level in the midst of the worst recession that we have had for many decades. Furthermore, company profits are increasing substantially. The share has been going up quarter by quarter. In case honourable members opposite do not believe those figures, let me quote from an article in the Melbourne Age of 3 September 1976 headed ‘Results are way out in front’. The article reads:

Company profits are soaring.

Two-thirds of the companies which so far have reported their results for the financial year ending on June 30 have declared profit rises comfortably higher than the inflation rate.

A Business Age survey has shown that 100 of the first 160 companies to report in the current profit season have revealed profit rises greater than 12.S per cent- the 1973-76 inflation rate.

A further 28 companies reported smaller rises while a similar number actually slipped. Only 5 went onto losses.

While 60 of the 1 60 companies paid a steady dividend and 11 trimmed payout, 71 saw fit to raise payments to shareholders.

Total profits earned by these early reporters jumped 2 1 per cent, from $284m to $344m.

This increase is almost double the inflation rate. It should be remembered that the best results are usually reported early.

Nevertheless, the early rise is one of the strongest for years.

I suggest to honourable members that those figures show that, in the midst of a recession, when consumer demand is sluggish, company profits are increasing substantially and the company share is increasing rapidly. Furthermore, in considering whether we should have a rapid transfer of income from wage earners to profits, we must also bear in mind that the tax concessions that this Government is giving to business will result in a fantastic transfer of income to after tax profits. In the next 12 months the tax that companies pay on income being earned this financial year will be reduced by over $ 1,000m- $600m less for the investment allowance and $350m less for the stock valuation adjustment factor, plus the allowances for the mining companies, the increase in the retention allowance for private business and so on. The amount will be well over $ 1,000m. The total amount of company tax raised last year was $2, 500m. That gives one some idea of the enormous reduction in company tax that this Government is introducing and is allowing to companies on income being earned this financial year. How many ways does the Government want it? In the midst of the worst recession for many years this Government apparently wants to give companies the best ride that they have ever had. Quite clearly the Budget is all about making the recession comfortable for business and not about introducing economic recovery.

I also make the point that it is not necessary to reduce real wages in order to reduce the rate of inflation. That was already happening under full wage indexation. It would have continued to occur with full wage indexation. It could have been accelerated, without cutting real wages, by cutting indirect taxes. That would have reduced the size of the consumer price index and therefore reduced the amount of flow on to wages. So it was possible within the wage indexation context to bring about a more rapid reduction in the rate of increase in wages whilst maintaining the full real value of wages. But this Government has rejected that concept. I suggest that it has done so more for ideological reasons than for sound economic ones.

Furthermore, the cutting of real wages runs counter to the need of the economy right at this time to increase consumer demand. The Government has cut government expenditure in real terms by at least 4 per cent. It is crucial in those circumstances that the consumer demand be increased, otherwise we will have many more people out of work. Reducing real wages will not help us to have an increase in the consumer demand. If the Government reduces the real amount of money that people have to spend, how does it expect them then to increase the consumer demand to the point where more jobs are being created? They would have to increase their spending ratio just to maintain the number of jobs. They would have to increase their spending ratio substantially to bring about a real increase in the number of jobs available and a substantial increase in the consumer demand. But why should the people do that when their real wages are down and the rate of unemployment is substantial and increasing? People are worried about losing their jobs and are scared about spending their savings.

There has been no increase in the real disposable income of people across the board. The fact of the matter is that the combined effect of the tax indexation proposals and the increase in family allowances plus the abolition of deductions for children and the Medibank levy or the payments required to be made to private health insurance companies will be that many people will be no better off as a result of the fiscal measures of this Government. Indeed, at the time that all of this was announced- 20 Maythe leak from the Treasury was that 57 per cent of the people would be worse off. In fact, most single people will be much worse off as a result of these measures. So there has been no overall increase in the real disposal incomes of people through the fiscal measures of this Government. The Government is reducing their real wages and it is giving them nothing in the way of tax cuts; yet it is expecting them greatly to increase their consumer demand. I think that that approach is totally and utterly naive and will not work. It will add to recession in this country and plunge this country much further into recession than it is at this stage.

It will not help to make reference to the position in other countries. The position in the United States of America has been used by the Treasurer (Mr Lynch) before its use today by the Minister for Employment and Industrial Relations. They say that cuts in real wages in the United States have brought about economic recovery. In fact, as the Australian Economic Review shows, cuts in indirect taxes increased real disposable incomes, that then led to increases in consumer demand and that brought about the recovery in the United States. The edition of the Australian Economic Review for the second quarter of 1976, referring to the United States, says:

The leading element of demand has been consumer spending, which in turn was primarily a response to the large personal income tax cuts operative from the second quarter of 1975.

So there is no solace in looking at the United States. Its recovery is not due to cuts in real wages but to increases in take home pay through tax cuts. Finally, no trade union official worth his salt can possibly keep telling his members to support a system which inexorably reduces their real wages. How can he possibly sell that to his members?

Mr DEPUTY SPEAKER (Dr Jenkins:
SCULLIN, VICTORIA

Order! The honourable member’s time has expired.

Dr EDWARDS:
Berowra

-The speech of the honourable member for Gellibrand (Mr Willis) was such a collection of incorrect and misleading statements that one hardly knows where to begin to answer it. It was a speech perhaps well designed to appeal to the unthinking, but it will not be bought by the majority of responsible Australians. Its centrepiece was a complaint that there has not been full indexation of wages and bigger and better wage increases. Perhaps that has a superficial appeal to wage and salary earners in a secure job, but there is another group to which the honourable member for Gellibrand scarcely referred, and that is the million and more Australians who are unemployed. I ask this Parliament and the Australian people listening to this debate to think hard on that group of people. They have no union to represent them. They are not represented before the Australian Conciliation and Arbitration Commission, nor do they have a great deal at stake in the business of preserving industrial peace and harmonious industrial relations to which the honourable member referred.

I stress 2 points. First, the Labor Party when in government created the unemployment which we have inherited, and that is the main reason why the substantial reduction in the increase in wages was achieved last year. The honourable member for Gellibrand attributed this reduction wholly to the introduction of wage indexation. The level of unemployment was less than 100 000 in 1973 and early 1974. By the middle to end of 1975 it was up to around 300 000. That was the end point of the policies of the former Government, and it achieved perhaps in one sense some result, but it is the present Government’s policies which will reduce that unemployment. I say to the honourable member that if the Government’s strategy does not on the face of it promise an early pick-up in employment what needs to be said is that any alternative approach would promise less by way of establishing a lasting increase in employment.

Let me approach my reply to the honourable member by stating positively the Government’s approach. It is first and foremost to put to the Australian people- I have in mind in particular the rank and file of Australian unions, if not their leaders- this fundamental truth: It is the big wage rise of the employed man that costs the unemployed man his job. This is absolutely central. It is the wage rise of the employed man that costs the unemployed man his job. This is not worker bashing in an attempt to contain the increases in wages and salaries. This is not a reversion to a crude wage fund theory. It is a truth which stems from the reality of the distortions of the Australian economy brought about by the previous Government, the essence of which was inflation. In particular, costs are way out of line with those of our overseas trading partners. They are too high and rising. So we have a situation in which the most expensive thing an employer can do is employ an Australian. The employer would be doing everything he can to minimise his labour requirements. That is the first of these distortions which underline the fundamental truth that the wage rise of the employed man is what costs the unemployed man his job.

Another is the level of profits. The honourable member for Gellibrand made a great deal of the fact that the profit share has shown some signs of recovery. Indeed it must. It was reduced as a result of the policies of the previous Government to a level which could not sustain continuing economic activity and continuing investment. Let me stress this: It is from today’s profits that stem tomorrow’s investments and new jobs of the day after tomorrow. That is what the importance of restoring reasonable profitability is all about. It is all about the incentive and the capacity, as the Minister for Employment and Industrial Relations (Mr Street) stated in his ministerial statement earlier today, to undertake new investment. It is today’s new investment which provides tomorrow’s new jobs. Under the previous administration the share of profits was squeezed to a point where there could not be new development.

I underline again the truth, one which was propounded in this chamber by the honourable member for Melbourne Ports (Mr Crean) when Treasurer, that the undue wage rise of the employed man is what in these circumstances costs the unemployed man his job. We put this to the Australian people. We put it to the Arbitration Commission. The thrust, the major component, of our wages policy is to put this view to the Commission with the object of slowing the increase in award wages. We have sought to do this in a way which minimises its impact on the low income groups. Our objective is to attempt to slow the increase in award wages in a way which minimises its impact on low income groups. So we have proposed and argued for, and the Commission has acceded to it in its last 2 national wage judgments, a system of so-called tapered or plateau wage indexation. I ask the House to recall that the Minister for Employment and Industrial Relations in his statement quoted chapter and verse to show that this is precisely the position that the now Opposition when in government itself embraced and argued for. In 1974 it submitted that a system of wage indexation should be introduced which would provide indexation as a flat amount across the board derived by application of the movement in the consumer price index to the minimum wage. A similar proposal was put in 1 975.

What we seek to achieve in the face of say, a 3 per cent increase in the consumer price index, is the full 3 per cent increase, about $3 a week, for the low income earner, but we ask the man on, say, $30,000 a year to forgo for a period, to give us a breathing space to beat inflation, part of the nearly $20 a week increase that a 3 per cent rise would give him. That is what is involved in plateau indexation which we have proposed. In proposing that we are acting fully in accordance with the wage indexation principles laid down by the Conciliation and Arbitration Commission. During the election campaign this Government committed itself to the support of wage indexation and the wage indexation principles of the Commission. In putting forward that sort of submission, the Government is acting in accordance with those principles, particularly principle 1 and principle 4, which latter states that the Commission will determine from time to time what the form of indexation will be. The Government has sought to slow the increase in award wage rates by this form of adjustment to price increases.

Let me say in passing that the slowing of award wage increases is an integral part of the Government’s program, but the Government does not expect that real earnings overall will do other than hold steady. While award rates will be slowed in this way, with the recovery of the economy there will be increased overtime and other receipts. Overtime hours worked have increased already. In addition, there will be the effect of the system of family allowances, to which 1 will refer in a moment. As a result of those factors, we will have a position which is as set out on page 26 of the Budget Speech:

Real average earnings per employed person would remain approximately unchanged . . .

The statement adds: . . . due to employment growth, aggregate real earnings would increase moderately.

Together with the unlocking of accumulated savings, that is the basis for an increase in real consumption which the Government and the Opposition, as well as the unions, recognise as an essential component in economic recovery.

The Government has taken 2 major initiatives to back its stand in the wages context- to confer authority on it, so to speak, for restraining increases in wages and salaries. I refer to the system of family allowances which has been introduced and to the introduction of personal tax indexation as from 1 July. So far as the system of family allowances is concerned, what is important is that in low income groups- income groups where insufficient tax is paid to take advantage of rebates for children- the substantially increased family allowances are a net addition to incomes. Those increases are very substantial. For 5 children, the new system of family allowances represents something like $27.50 a week or a cheque for $330 for a 12-week period.

Mr Baillieu:

– That is a major reform.

Dr EDWARDS:

-That is right, and Australians will be receiving those cheques this week. Through the payment of that allowance the Government has introduced a measure which substantially advantages low income groups. Again, as I said before, that confers authority on the Government to pursue its policy of wage restraint in the interests of restoring economic health and providing rewarding effective jobs for all Australians. In addition, tax indexation has been implemented from 1 July. The Mathews Committee, which the Opposition set up when it was in government, recommended this step. Its recommendation was supported by the Australian Council of Trade Unions, but the previous Government did not see fit to implement the measure. The Government stated in its policy speech that it would seek to implement tax indexation over 3 years; it has been implemented in its entirety as from 1 July. Indexation involves an effective reduction in taxation compared with what it would otherwise be and, as the Minister said, will amount to over $ 1 ,000m in a year and of the order of 2.6 per cent to 3.9 per cent of income in the relevant tax range. So in that way also the Government has sought to moderate pressure for wage claims. It has acted in that way in the interests of all Australians and in such a way that the impact of its policy on low income groups is substantially moderated.

Mr YOUNG:
Port Adelaide

-Like my colleague the honourable member for Gellibrand (Mr Willis), I was a little amazed at the way in which the Government brought about this debate. Firstly, I understand it was intended that this matter would be debated later, after the Opposition had been given the opportunity to look at the statement. Then we had to try to understand why the Government wanted to start this week of sittings with another attack on the trade union movement. It should be of interest to all Australians to know that the state of the House at the moment is 91 members of the Liberal and National Country Parties and 36 members of the Labor Party and that not one of the 91 members sitting opposite are or have been members of a trade union. We can therefore expect from them a savage case of union bashing whenever these debates come before the House. The second astounding feature of this debate is that the Opposition thought it was going to be a serious debate and expected that, as well as the Minister for Employment and Industrial Relations (Mr Street), other senior members of the Government would put forward their views and let Australians know about the Government’s attitude to future wage cases. But the next 2 speakers for the Government, who held quite senior positions when they were in Opposition, are people who have been rejected by the Government. Their expertise must have been rejected by the Prime Minister (Mr Malcolm Fraser) because when he won office those 2 speakers were sent to the back benches. How seriously should the Opposition regard this union bashing exercise that is taking place today?

Let us have another look at the way in which the Government intends to try to reach agreement with the wage and salary earners of this country. On the Friday after the House rose following the last week of sitting- that is 10 days ago- an incredible offer was made following a decision reached in a car going from Parliament House to the local Canberra airport. A decision was made by the Prime Minister and the Minister for Transport (Mr Nixon), and an incredible offer was made to the shipyard workers of Australia. It was not a decision to maintain the shipbuilding industry, not a decision even to give them the orders which are now being placed overseas, but a decision which stated: ‘You can continue to work for a short period if you all refuse to take what we expect to be the normal wage increase of every Australian worker for the next year, a 12 per cent wage increase which might be handed down through wage indexation. ‘ Not only have there been a series of decisions since 13 December of last year which have confused the wage and salary earners of this country, but also new statements have been made continually by the Government in relation to its own stand.

No one knows, certainly no one in this House- if they do know they have not expressed it- certainly not the Commission and certainly not the Australian Council of Trade Unions, what the Government is going to say at the next wage hearing. On every occasion on which there has been a wage hearing since the Fraser Government came to office it has made a different submission. At least there is a little honesty in this statement. On reading through it one finds the Government drawing the line between its policies and what it expects the people of Australia to accept. What the Government is asking them to accept is a real reduction in the living standards of every wage and salary earner in this country. That is what the Government is asking for, and that is what makes this statement a little more significant than some of the statements which have been made since last December. I suspect that the most significant feature of this Government’s policy is the way in which it hoodwinked the electorate prior to 13 December. In the policy statement made prior to the time when the people had to vote on 13 December there was no equivocation in what the Prime Minister said:

The Government will support the wage indexation agreement.

There was absolutely no equivocation at all. On behalf of the 91 members who now sit opposite, the Prime Minister told the people of Australia that his Government would abide by indexation. As the Opposition has pointed out on a number of occasions in this House, prior to 13 December last year indexation meant full indexation. It was not indexation restricted to the minimum wage or subject to a wage plateau. It was not confined to the average male rate in the metal trades or to average weekly earnings generally. It was not held to a ceiling of $200 a week. The promise that the Prime Minister made on behalf of all honourable members opposite was for full indexation as it had operated previously. I want to cite the ways in which this Government is now perhaps trying to manipulate the Conciliation and Arbitration Commission. Honourable members opposite ought to look at placitum (xxxv) of section 5 1 of the Constitution, which reads:

The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good Government of the Commonwealth with respect to:

Conciliation and Arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State:

If the Government says that it is its right to go before the Commission and convince the Commission that it must bring about certain results in order to suit the economic aims- which are questionableof the Government, then we say that the Government is putting forward a policy which is totally unacceptable to the majority of Australians. Let us look further at this statement which was delivered by the Minister just a short time ago and which we are told we are to debate forthwith. What do we find is happening? As I have said, the Government has put forward a series of statements since 13 December in relation to where it stands on indexation. In the opening paragraph of the statement the Minister makes some suggestion on behalf of the Government, as to who has destroyed indexation. You can work with the people only when there is complete trust. When the present Government challenged us in November and December of last year to prove that we had better industrial relations with the trade unions as a result of our working with them, we pointed out the great difficulties that existed in that area. But the then Opposition said that if elected to government it would overcome those difficulties. Who is destroying indexation? The Government is doing it because it has destroyed any trust that may have been built up with the trade union movement. An overwhelming majority of people voted for the Government on 13 December. It had an enormous amount of trust placed in it, but it is using its policies as breeding grounds for the division of the Australian people. It is hoping, as it did during the 1950s and the 1960s, to split the Australian community and to bring about some political gain for the Liberal and National Country Parties. Government supporters talk about what is done outside the guidelines. It should be of interest to honourable members opposite to know that wage relativities between the various sections of working people in this country were always maintained by means of over-award payments; they were not maintained by award payments. Award payments were set as the minimum, not as the maximum. In a series of submissions to the various tribunals around Australia the Amalgamated Metal Workers Union has been able to maintain wage relativities with other sections of the community because inherent in its wage claims was a $30 overaward payment. That was the average payment to every fitter throughout Australia. If those people had been paid award rates they would have been getting paid less than that received by a tradesman’s assistant. So this talk about guidelines and the policies of the Government of course is ridiculous.

In the third paragraph of his statement the Minister talks about economic recovery and full employment. This comes a fortnight after the Treasurer (Mr Lynch) brought in a Budget which does absolutely nothing to put people back to work. The Government itself expects that the number of people unemployed in August of next year will be slightly higher than the number of people unemployed in August of this year. The Government is breaking the trust that has been built up and is breaking an agreement on wage relations by bringing down a Budget which deliberately sets out to see that 140 000 kids who leave school this year will find it almost impossible to find employment in the early months of 1977. The Government knows as well as we do that the number of people unemployed is going to be far higher in a year’s time than it is today. This is a great policy, a great submission to put forward to the people, to build trust and to get some sort of agreement on wages. Then in paragraph 4 of the statement delivered by the Minister, the Government says that it is the unions which are keeping people out of work. It may also interest honourable members opposite to know that the submission made to the Government one month ago by the Metal Industries Association gave figures which demonstrated quite clearly that as a result of the Government’s chopping back its spending in all areas without any sort of scrutiny at all 4000 people who had been working on government contracts in private enterprise in the metal trades industry had lost their jobs. Trade unions do not employ people; they do not hire and fire. Instead of making accusations against the trade unions, the Government ought to look at the impact of its own policies, because the Metal Industries Association can give one clear illustration of how 4000 people have been lost from that sector of employment.

As I said earlier, the people are confused and they reject this Government’s policy on wages because there have been so many Government policies. On every occasion that the Commission has met the Government has put forward a new proposal. Let us look at the proposition that an increase in wages at the present time would do a great deal of harm. In paragraph 10 of his statement the Minister says that in the present circumstances a one per cent increase in wages can be expected to add $10Om each quarter to the total wage and salary bill. But what would the wage and salary earners get if they were to accept all the proposals put forward by this Government? We find that in the Budget the Government has attacked the agencies which were set up by the Labor Administration to protect the consumer.

The Prices Justification Tribunal and the Trade Practices Commission are 2 authorities that had their budgets slashed, and they will not be nearly as effective in their respective fields of controlling prices and protecting the consumer as they have been previously. So I say to the wage and salary earners of Australia that if they accept what the Government says on wages it will mean not just taking a reduction in real wages, in the real standard of living over the next 12 months; the consumer will receive less protection against those people from whom he must buy consumer goods. So again it is useless for this Government to expect the people of Australia to accept all the things it wants them to accept.

I do not think we should be restricted to making comments on the document which has been just put forward by the Minister as an attempt to discredit the trade union movement in the eyes of the Australian electorate. There is a battle going on in relation to wages. There can be no doubt in the minds of most people who are analysing the situation that the people of Australia will not accept a lowering of their living standards. The Government is very fond of saying: ‘This is what we would have done.’ It refuses to recognise the fact of life that it is in government; it is supposedly in charge of the country; it is supposedly in government to carry out the promises it made in November and December of last year about how to cure all the economic ills which it says were thrust upon Australia by the Labor Administration. Far from the Government effecting any of the cures which we were promised, we find that the economy is in a far worse state than it was on 1 1 November when this Government was installed by the Governor-General. So we have got to look at some of the promises that were made by the Government. I have before me one of the most interesting documents that Australia has ever been given. It is the policy speech made by the present Prime Minister before the last election. 1 shall quote a few things from it which prove that the Prime Minister was misleading the Australian people. He said on page 7 of the document.

We will work positively in co-operation with trade unionists.

Never a day passes in this Parliament without someone from the Opposition side, usually one of the Ministers, trying to condemn in general terms the trade union movement. When honourable members opposite do that they are condemning the vast majority of wage and salary earners in this country. There is no attempt from honourable members on this side of the House to condemn employer organisations in general terms and in an off-hand manner; there is no attempt to say that everything they do is wrong, that we should not listen to them, that we should not try to co-operate with them, that we should not try to look at the influences that operate in order to bring about a healthy economy. But every day we have to put up with this routine in the national Parliament of Liberal and National Country Party spokesmen condemning the trade unions. On page 8 of this now famous document the Prime Minister said:

The Government will support wage indexation.

The document goes on and on and on. Yesterday the Prime Minister made a great speech about tariffs and said that industries could not be protected forever with high tariff barriers. This is what he said in December;

We will give Australian industry the protection it needs. We would sooner have jobs than dogma.

The Prime Minister is chasing industry out of Australia, not the trade unions. It is the confusion that exists in the minds of business people, rendering them incapable of making decisions about future investment in their own areas that they are being chased out of this country, and they are taking with them the jobs of 300 000 or 400 000 people who are now unemployed. It is not the trade unions that should be condemned. It is this Government because it has taken an enormous gamble and it has not worked.

Mr DEPUTY SPEAKER:

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

Mr KATTER:
Kennedy

-I wish to make a personal explanation.

Mr DEPUTY SPEAKER:

-Does the honourable member claim to have been misrepresented?

Mr KATTER:

– Yes, in a most serious manner. The honourable member for Port Adelaide (Mr Young) said that members on this side of the House had never been actively associated with unions at all. This is entirely incorrect. In my case I was actively associated with the Federated Clerks Union when I was working on the wharves. I was a delegate for the State Service Union when I was at the university and at the Public Curator’s Office in Queensland. I was actively working for the Australian Workers Union for many years in far Western Queensland. Senator Collard was Secretary of the Combined Railways Union and Secretary of the Australian Federated Union of Locomotive Enginemen. I could go on.

Mr DEPUTY SPEAKER:

-Order! The honourable member is making a personal explanation. He should confine himself to the way in which he has been personally misrepresented.

Mr KATTER:

-Thank you, Mr Deputy Speaker.

Mr Young:

– Could I apologise? Apparently one member out of ninety-one was associated with a union.

Mr NEIL:
St George

-The honourable member stated-

Mr DEPUTY SPEAKER:

-Is the honourable member addressing himself to the motion or does he claim to have been misrepresented?

Mr NEIL:

– I claim to have been misrepresented. In some of the years between 1961 and 1968 I was an active member of the New South Wales Public Service Association and in the middle of the 1960s, as secretary of a student association, I co-operated with the Federated Clerks Union of New South Wales in actively arranging for the conditions of articled clerks to be changed, much to their benefit in that State.

Mr McLEAN:
Perth

-I also claim to have been misrepresented by the honourable member for Port Adelaide (Mr Young). I was actively involved in the union at the University of Western Australia, which was called the Salaried Officers Association, of the University of Western Australia Union of Workers. I was a member in 1974 and 1975. During 1975 I was VicePresident of that Union and played a very active role in its affairs. I have a proper regard for the role of unions in our economic society.

Mr Howard:

– I take a point of order. The Government would be quite prepared to give the honourable member for Port Adelaide progressive leave to successively retract the dishonest statements he made about honourable members on this side of the House.

Mr Hurford:

– You are making a mockery of the forms of the House.

Mr DEPUTY SPEAKER:
Mr LLOYD:
Murray

-I belong to several primary producer organisations, which represent the most underpaid workers in this country. The ministerial statement on wages policy is a most important document. It is important because a realistic and successful wages policy is central to the reduction to an acceptable level of our inflation rate, and that in turn is a prerequisite to a worthwhile increase in consumption, expenditure, investment and employment. It is also important that all Australians know the Government’s policy on wages and the perils to their future if this policy is not successful or cannot be implemented because of outside interference.

It is also important for honourable members to know and to be able to debate this policy. I congratulate the Minister for Employment and Industrial Relations (Mr Street) for this welcome return to the use of Parliament for important policy statements and for allowing their immediate debate rather than allowing them to wither on the notice paper for months at a time. I also want to compliment the Minister on the tone of his statement. It was moderate in language and it is moderate in policy also. If one considers this policy, one sees it is a policy of moderation and gradualism. Compared with those imposed by other Western nations, some of which the Minister referred to in his speech, it is a very moderate wages policy. It can in no way be said that the policy is a union or wage earner bashing exercise. However, the legitimate question which can be asked is: Who are the unions really supporting if they do not support this policy? It is certainly not the unemployed of Australia and certainly not the average wage earner.

In the United Kingdom to which the Minister referred there was an average increase for the 12 months of 4 1/2 per cent with a maximum of £4 per week. The inflation rate in the United Kingdom is still above ours, regrettable though that is for both countries. Even with the social wage allowances inherent within those upper limits that were imposed, which in itself is patchy in relation to the society in the United Kingdom, it will still mean a considerable reduction in actual real wages in the United Kingdom this year. The point I want to make is this: Who introduced that wages policy in the United Kingdom? It was not a Conservative Government, not Mrs Thatcher, but a Labour Government. It has been accepted by the Trade Union Congress which is the equivalent in the UK of the Australian Council of Trade Unions. So we have an interesting situation in the United Kingdom where something that will reduce the real living standards and wages of people more than is proposed in this document is put forward by a Labour Government and accepted by the trade union movement; yet we have these people here saying that this is a harsh policy, that it is union bashing. How absurd can it be after looking at that analogy? This policy provides an average of about 70 per cent of full indexation. This in itself is very moderate compared with the policy in the United Kingdom. The Minister has also pointed out that the social wage component in our policy of family allowances and with tax indexation the increase here is above that of the United Kingdom.

I refer also to New Zealand. After a 7 per cent or $7 per week increase, whichever was the lesser in June of this year, there is now a total wage and price freeze for the next 12 months. Canada, which was not referred to, some months ago instituted a far more severe policy than will be the policy in Australia if this proposal is carried out. Many Australians believe that this moderate approach to wages policy as stated by the Minister will not reduce inflation quickly enough and that it should be more rapid if we are to regain international competitiveness, because our wage rate escalation and our inflation rate are still well above those of most of our international competitors. It is no use blaming this Government for that situation. It was brought about by the previous Labor Government which performed the remarkable miracle in 3 years of government of making Australia the highest cost country in the Western world. There are millions of Australians now suffering for this.

I want to refer to the people who are suffering. They are the unemployed who will not regain jobs, as my friend the honourable member for Berowra (Dr Edwards) said, while this inflation rate continues. Their poverty will increase relative to those who are fortunate enough to be receiving any form of wage indexation, let alone full wage indexation, while that situation persists. One can link with them the pensioners of this country. In spite of the increase for pensioners following increases in the consumer price index, there are other factors arising from high inflation that reduce their actual standard of living. I want to refer particularly to the dramatic reduction of real wages and living standards for millions of Australians who cannot automatically pass on increased costs through some form of indexation, through wage increases or price increases because they are in the export industries or industries threatened by import competition. Their poverty relative to those fortunate enough to be receiving any form of indexation will increase and continue while this situation continues. It is not just a matter of a return to the share of profits versus wages, to which my friend the modest member refers from time to time most accurately; this particular group- that is those who are in export industries or in import replacement industries- have to get back to a fair return. They along with the pensioners and the unemployed, are suffering the most in our present situation.

I want to give a few examples of this. The United States Department of Agriculture publication Foreign Agriculture recently published a food basket survey for the major capitals of the world. It does this survey quite regularly. This survey showed that Australia had a lower food basket survey than most other countries in the Western world which have lower inflation rates than ours. I want to make that point because it is certainly not the return to the producers that is causing the dramatically high cost of processing and moving export products such as food in this country because our figures are still lower than most of these other countries that have been mentioned.

I want to refer first of all to wool. In May 1975 the Australian Wool Corporation revealed that taking wool from a Melbourne wool store to a ship’s hold cost 7.22c a kilo. For the ship to take the wool to Europe and have it delivered to a mill door cost 8.49c a kilo. The poor apple grower gets approximately $2 a carton for all of his labour. The cost of a carton of apples becomes $4.50 by the time the apples are picked, packed and delivered alongside a ship. It then costs $1.17 a carton just to load the apples into the ship. It now costs about $24 to shift a tonne of bagged rice from the rail truck beside the ship in Sydney into the hold of the ship. By comparison the rice mill has to receive, store, transport, mill, quality control- in fact, do everything- for $23 a tonne compared with $24 a tonne to move the stuff from the rail truck into the ship.

That is the sort of thing I have referred to in the dramatic reduction in real standards of living that is taking place for so many Australians while our inflation rate- caused by our excessive wage escalation- continues in this country. Our fruit cannery costs are now the highest in the world and we can no longer compete with Californians. 1 am told that the minimum slaughter charge for an animal is about $28. One sees thousands and thousands of animals being bought after perhaps 2 years of raising for $10 a head because of excessive costs. Our abattoir costs are the highest in the world. The standard of living of those people who cannot pass things on through some automatic process is being reduced all the time.

Mr Kelly:

– They are being bled white.

Mr LLOYD:

– I will accept that as a very good interjection. If this is allowed to continue the ultimate must be the loss of more jobs- jobs of unionists and wage earners- because these industries become less and less competitive whether they are export or import replacement.

In the tourist industry we are told that in the recent school holidays on one day in Melbourne over 1000 people left for Fiji because the wages in our tourist industry are the highest in the world and it is far cheaper for people to go to Fiji than it is to go to Queensland. We have the double problem here of those people who are protected from the reality of the economic situation in Australia- those who are enjoying that sort of benefit- but at the same time are costing thousands of other Australians their jobs. This raises the question of who has the real interests of the wage earner at heart. Certainly it cannot be the Australian Labor Party or the trade union movement with their present policies because their policies must mean more unemployment, more inflation and a further lowering in the long term of the standards of living of people in Australia relative to other countries. One has only to look at the United Kingdom to see this taking place now due to the policies that have been pursued in that country.

The policy enunciated today by the Minister for Employment and Industrial Relations (Mr Street) offers to all Australians a smaller, temporary reduction in real wages for those fortunate enough to be on any form of indexation. It is the only hope of a reduction in inflation to acceptable levels in this country. It is the prerequisite for a growth in jobs, for consumption, for investment and so on. It also offers long term growth in real living standards in this country for all Australians not only relative to one another but also relative in our country to other countries.

Mr HURFORD:
Adelaide

-I think it needs repeating that the Australian Labor Party Opposition supports the contention that we are going through very difficult economic times. They are described as times of stagflation which means that we are suffering from a very high rate of unemployment at the same time as a very high rate of inflation. Listening to some of the speeches by Government supporters one would think this was not conceded. What the debate is about is how we are going to get out of this difficult economic situation because we assert, with great confidence, that the economic difficulties which we suffer in Australia are difficulties of the system whether we describe it as a capitalist system or a mixed economy, which are shared by every other comparable country which has our form of system.

The reasons our particular system arrives at a situation such as this difficult one of stagflation can be explained by describing the trade cycle and demonstrating how freedom is given to many different institutions, whether they are different companies, whether they are called Gove, Hamersley, Mount Newman or whatever in the various countries, to make these decisions separately and independently of each other without any economic planning and arriving at an overstocking situation in so many areas and then, of course, stocks- this happens in country that operates under a similar sort of system- are bound to run down. Then there is less investment. So we have this world trade cycle situation. It came at the time the ALP was in power. It affected not just our country but every similar country and we are all grappling with how to come out of this situation. It is completely misleading for Government supporters cynically to bring in a paper on wages policy such as this ministerial statement which we are debating today suggesting that the main cause of these problems of unemployment is the wage indexation system or the wages policies which have hitherto operated in this country. I repeat, it is a cynical exercise.

The opening sentence of the statement by the Minister for Employment and Industrial Relations (Mr Street) completely misrepresents the current industrial relations in Australia. Orderly methods of wage fixation are under attack, not from the trade union movement as is suggested in this document, but from the Government itself. It is the Government which has opposed continuation of the indexation system. It is the Prime Minister (Mr Malcolm Fraser) who in his election policy speech- and I quote it again even though speakers from this side of the House used the quotation earlier in the debate- said:

Our reforms will maintain the purchasing power of wages and ease the pressure for excessive wage demands.

It is the Government which broke this election promise straight after taking office by arguing for a reduction in real wages before the Australian Conciliation and Arbitration Commission. It is the Government which has continued to attempt to break the indexation system.

The previous speaker, the honourable member for Murray (Mr Lloyd), can, of course, point to many different areas, as he has done, where the increase in wages has increased costs and has caused difficulties but no solutions are offered by him other than the alternative one of cutting real wages which is being done by a government which promised not to do that. It made the promise at that time for very good reason- not only to win votes but because it was being properly advised at that time not to create confrontation in this country. The Government has since apparently been advised differently and it has fallen for bad advice as I hope to illustrate in my speech.

The Minister’s misrepresentation in this statement is astounding. A just system, an effective workable system, is being deliberately undermined by this Government- a government that promises one thing and does the opposite. Then the Minister has the gall to make a statement suggesting that ‘certain elements in the trade union movement’ are attacking the system. It is difficult to believe that the Minister has made his statement other than to invite criticism. This will clearly be the effect. The ministerial statement is quite inadequate because it inadequately describes the facts, leave alone the economic strategy of the options which are available. For example, the Minister for Employment and Industrial Relations in this statement attempts to support his case by arguing that industrial conflict is increasing. The figures which he cites show this statement to be false. The latest statistics for industrial disputes are for the month of May. They show that 804 000 working days were lost in the first 5 months of this year. From January to May 1975, 1244 000 working days were lost. The amount of working time lost as a result of industrial stoppages was more than one-third lower this year than it was last year. The reason the figure is lower this year is that we had a wages policy- namely, a wage indexation policy- which was working. It had dampened down industrial conflict and industrial turmoil. Man days lost as a result of strikes fell by 35 per cent this year. This shows a decline in industrial militancy, the reverse of the situation the Minister is attempting to portray in this cynical and, indeed, provocative statement which has been brought down in the House today.

The portrayal of the Medibank strike as another example of irresponsible militancy is equally absurd. The Medibank strike was certainly both politically and industrially motivated. We do not deny that for a moment. This was because the Government, which had promised to retain Medibank, broke its promise. It introduced charges which themselves reduced the real disposable income in the pockets of wage and salary earners and others in this countrya deliberately provocative act. Turning to economic strategy, the Minister speaks as if the Government were pursuing the only economic strategy available to it and that an attack on real wages is an essential part of that strategy. This is an inadequate statement. Firstly, inflation is not the principle cause of unemployment. Lack of demand is the principle cause of unemployment. Lack of demand comes partly from the import leakage, as the Minister says, but a more important factor is the reduction in the level of government spending. If real government outlays were increased in Australia, as they are in all other major Organisation for Economic Co-operation and Development countries, unemployment would not be as high as it is.

Furthermore, of course, there is a lack of confidence amongst consumers. They are, to use the current jargon, squirrelling away their savings into deposit accounts. They are not spending because they fear unemployment and because they are suffering a Government which does not focus on unemployment. Yet, the honourable member for Murray brings into the House the proposition that we should turn to what is being done in this area in the United Kingdom. In the United Kingdom, the demand is very much related to the country’s exports, as the honourable member for Murray ought to know. The situation in that country is quite different to that existing in this country where future employment is related to consumer confidence. It is related to the consumersthe residents- of this country getting out and spending. Of course, they will not spend if their real incomes are being attacked in the way they are being attacked as we see outlined in the statement which we are debating now.

It is repetitive to have to draw attention yet again to the distortions in economic policy being forced on Australia by this Government. But it is important to stress that the ruthless destruction of cost effective public programs by this illinformed and economically incompetent Government is forcing rising unemployment and slower economic growth on the Australian community. As I have said before, a selective stimulatory Budget strategy could have been adopted which would have reinforced the economic recovery which began in the last half of 1975 rather than running the danger of aborting that recovery, as this Government has done. It is doing more than running that danger, it has now, as every indicator shows, aborted the recovery. Such carefully used instruments as the selective stimulatory spending by government, which we in the Opposition have advocated, would have contributed to reducing unemployment by now without in any way stimulating inflation. This Government is quite inconsistent in the policies it is adopting if it is suggesting that in the Budget it has recently brought down it is focusing attention on economic recovery. It is not. It is creating further timidity on the part of those people in the community who are squirrelling away their savings rather than bringing about that economic confidence which is so necessary. This statement by the Minister- this attack on the real wages of the people in the community- is but one further example of the attack on the consumers of this country and on their confidence.

As I have suggested already and reassert now, the Government’s wages policy is naive. There was widespread community criticism of and the unions were naturally antagonised by, the Government’s failure to honour the election promise of support for wage indexation. The Government’s aim of reducing real wages is both unwise and unnecessary. It is unwise because the indexation system was working well. As long as wage earners knew that they would be compensated automatically for the effects of price increases they could limit their increasing wage expectations to sharing in the effects of productivity improvements, after a gap agreed to in the social compact, during which time all productivity gains could go to stimulating investment or, in a few cases, to limiting wage increases to the correction of anomalies. These were the old principles on which wages policies in this country were based. They were good principles and they were seen to be working. The Opposition believes that the more regularity and certainty we can retain in wage setting, the more effective co-operation between all parties there is likely to be. The decision of the Conciliation and Arbitration Commission should have been to retain full wage indexation. But if partial indexation were introduced, the Opposition believes that the cut off point should have been at a higher level- for example, at the level of average weekly earnings of about $175 for males- rather than at the level of average award wages as has been the case. This would have reduced the impact of introducing plateau indexation and it would have prevented hardship to lower income earners while slightly reducing differentials among those who can afford a small real decrease in their incomes without causing a rash of margin claims which inevitably will follow if margins are disrupted as they are being disrupted by national wage case decisions right now.

The Government’s wages policy has been unnecessary because it seems to have been based on some confusion. Government leaders have implied that for profits to increase and recovery to occur, real wages must fall. This was reasserted in the statement that we are debating today. This just is not so. This confuses wage levels with the share of wages in national income and profit rates with the share of profits in national income. The way to increase the profit share is to encourage economic recovery. It is well known that the share of profits rises in a boom and falls in a recession. The profit share is low at present because the economy is still in a cyclical trough. But in spite of it being low overall, we notice that the latest publications of profit figures for the year ended 30 June 1976- when wage indexation applied almost throughout the total year- show that these profit rates have been increasing. The fact is that they should be adjusted for current value accounting reasons before we draw any comparisons. But even with such adjustments, the profit rates have improved under wage indexation. If sustained recovery occurs, the share profits in income will rise again encouraging business to invest, so enhancing the recovery further.

Mr Deputy Speaker, I suggest that such a policy of focusing on recovery should be followed instead of adopting this policy of ensuring that the timid spenders of this country save rather than get out and spend. I suggest that we are ensuring this latter course by following the policies outlined in the statement that we are debating today. Such policies are ill-informed and we should reject them.

Mr DEPUTY SPEAKER:

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

Question resolved in the affirmative.

page 732

ASSENT TO BILLS

Assent to the following Bills reported:

Organisation for Economic Co-operation and Development (Financial Support Fund) Bill 1976.

Psychotropic Substances Bill 1976.

Broadcasting and Television Amendment Bill 1976.

Trade Practices Amendment Bill 1976.

page 732

EMPLOYMENT PROSPECTS FOR YOUNG PEOPLE

Discussion of Matter of Public Importance

Mr ACTING SPEAKER:

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

The worsening employment prospects for young people.

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

Mr WILLIS:
Gellibrand

-Mr Acting Speaker, the Opposition raises this matter in the Parliament today because it is gravely concerned at the employment situation in general and the employment situation of young people in particular. It is also greatly concerned at the economic policies being pursued by this Government substantially to increase the number of unemployed and to face school leavers at the end of this year with the worst job market for decades. For the fact is that the self-proclaimed great economic managers have not delivered the goods. Indeed they are fast creating a situation in which the level of unemployment that occurred under the Labor Government will appear mild by comparison.

Already this Government has completely reversed a declining unemployment trend when it seized office to a substantially increasing trend. No amount of fiddling with the figures by abolishing the seasonally adjusted series of unemployment figures can alter that fact. One need only note that in August of this year the number of unemployed was almost 20 000 above the level for August of last year and that the divergence from the figures for the same month of last year has increased markedly over the last few months. Also the seasonally adjusted unemployment figure for August which was not published by the Government but which was printed in various newspapers as 327 876 was the highest figure for some time.

Nor is there any prospect that this trend is likely to be reversed in the next few months. On the contrary, the combination of a real cut back in government expenditure and a slack, even deteriorating private sector of the economy will create much higher unemployment levels, particularly as at the end of this year 200 000 school leavers plus 50 000 graduates from tertiary institutions will come onto the labour market. Thus 250 000 young people will be looking for jobs in a few months time in a labour market that gives every indication of being in a worse state than it is in now. That state is already bad for young people- far worse than for the work force as a whole. According to the May labour force survey conducted by the Bureau of Statistics, unemployed 15 to 19-year olds had an unemployment rate of 12 per cent compared with 3 per cent for those aged 20 years and over. For teenage girls the unemployment rate was 13.6 per cent. According to that survey teenagers comprise 35 per cent of the total unemployed in the country.

Since that survey a senior official of the Department of Employment and Industrial Relations, Mr Peter Kirby, who is in charge of manpower matters, has stated publicly that teenagers comprise nearly 40 per cent of the total unemployed. He also observed that there are 35 young people registered as unemployed for each vacancy registered with the Commonwealth Employment Service and that in non-metropolitan New South Wales, the ratio of unskilled junior males to vacancies was 600 to 1. 1 ask the House to note that figure particularly: metropolitan areas of New South Wales; there are 600 junior males registered as unemployed for every job vacancy for those people. Furthermore, the duration of unemployment for many young people is extremely lengthy. The May labour force survey showed that over 24 000 teenagers were still looking for their first job and that the average duration of unemployment had increased from 14.6 weeks in the February survey to 17.1 weeks in May. About one-quarter of the young unemployed have been unemployed for between 13 and 26 weeks while nearly 20 per cent of them have been unemployed for 6 months or more.

The effect of such prolonged unemployment on youngsters, particularly those seeking their first job and being met with continual rejection in their search for a job, must surely be deleterious. Their confidence must be sapped and it would scarcely be surprising if they became rather bitter and anti-social, particularly when the Government that is doing nothing to alleviate their position also adopts a suspicious, if not hostile attitude to them and treats them as bludgers on the welfare rolls rather than as people in need of help.

It is indeed a sad commentary on this Government that it came into office with an employment policy that promised ‘a systematic attack on unemployment’ and laid out a 5 point program to this end. In practice none of these S points has been taken up and the systematic attack has been on those who are unemployed rather than on the level of unemployment. The viciousness of this campaign is amply demonstrated by the fact that the allocation of funds for unemployment benefit this year is $3 3m less than last year. This is despite the fact that unemployment benefits have increased and the Budget is based on an assumption that unemployment will remain at about current levels.

The Government has acted specifically against young people by refusing to pay unemployment benefit to them after they leave school until the school holidays are over, by removing their elibility for benefit if they do not accept a job that involves their having to leave home, by refusing benefit for an indeterminate time after they have been deemed to have left their previous job voluntarily and by refusing any increase in unemployment benefit to those under 18 years of age before next year’s Budget. If only the Government’s determination to prevent the young unemployed from ripping off the public purse were matched by an equal determination to get them jobs, the situation would be at least tolerable. Instead, its paranoia about teenage dole bludgers is matched by an apparently cynical unconcern at the current high levels of teenage jobless and the much higher rates in prospect. How else can one interpret the actions of this Government which has planned its whole Budget on the basis that unemployment will not be reduced this financial year? It has reduced real government demand, thereby eliminating many jobs in both the government and the private fields. At the same time it has given no stimulus to consumer demand, yet without a growth in this key area of demand for goods and services produced by the private sector, there can be no increase in jobs.

It is terribly important to realise that it requires a growth in consumer demand simply to offset the decline in the government sector, thereby keeping the overall level of jobs constant. Then there needs to be a further substantial increase to take up the estimated 2 per cent increase in the work force which will occur this year. If that substantial increase in consumer demand does eventuate then unemployment will still remain at current levels and the appalling job prospects facing teenagers at present will still remain. If, however, that considerable increase in consumer demand does not eventuate- all the indicators are that it will not- then unemployment will be higher than current levels and the situation facing school leavers and other youngsters seeking jobs will be even more grim.

Not only is the Government’s macroeconomic policy both callous and highly suspect as regards employment levels, but at the microeconomic level it is also quite repugnant. It does nothing to alleviate the situation of the young unemployed by tailoring manpower policies to create employment prospects for them. This area of government activity is virtually as important as attaining an increase in the level of economic activity. For the employment difficulties of the young have not just developed during the current recession; they have been developing for the past decade or so. Many reasons have been postulated for this. A major reason is that the rate of increase in the younger age groups in the population has been much higher than that for the work force as a whole. For instance, from the mid-1950s to the mid-1970s, the rate of increase in the 15 to 24-year-old age group was almost twice that of the total population. Various other reasons have been suggested for this factor but their validity is far from certain. What is clear is that the young unemployed are largely unskilled and possess below average education levels. I shall quote from a paper given by Mr Kirby of the Department of Employment and Industrial Relations. In it he refers to a survey conducted by the Department last September which looked at the characteristics of the junior unemployed. The paper states:

Over two-thirds of the young males unemployed were registered for semi-skilled and unskilled employment and the same proportion of unemployed young females were registered for clerical and administrative occupations.

More than one-quarter of the males and one-third of the females had had no previous work experience. Almost onehalf of those unemployed young people had not attempted any education beyond 3rd Form secondary standard, and 2 out of every 3 had not attempted beyond 4th Form.

In country areas the situation was worse. Very nearly three-quarters of the young unemployed males there had not attempted any education beyond 4th Form.

Thus the lower educated youths have grim employment prospects. It is clear that if they are to have reasonable employment prospects it will require not just an increase in economic activity but also the provision of training and work skills. Even better educated youths are by no means assured of a job, and the current trend of youths staying at school longer is probably making it even more difficult for the lower educated youths to get a job as employers, faced with a buyer’s market, demand higher and higher educational standards. Clearly the solution to the problem of the unemployed young requires greatly increased government initiative in the training area. But this Government is reducing, rather than expanding, its activity in this field. In the area of retraining, for instance, the Government has slashed the level of allowances for most trainees under the National Employment and Training scheme and reduced the number of trainees from more than 14 000 last year to just over 7S00 at present. This is a deplorable situation and contrasts vividly with the Government’s announced policy before the last election to ‘strengthen retraining’.

The opportunity exists within the NEAT scheme to expand greatly the training of youths, particularly those with little or no skills. But nothing has been done. The allocation for the NEAT scheme in this year’s Budget is $12m less than that allocated in last year’s Budget. It shows how important this Government regards retraining, despite the obvious and crying need for training, particularly among young people. Similarly, the Government’s response to the needs of the apprenticeships situation is pathetic. The intake of apprentices has fallen by 25 per cent in the last 2 years. Were it not for the National Apprenticeship Assistance Scheme which was introduced by the Labor Government in 1973 to subsidise employers for engaging apprentices, the situation would be even worse. What has been the Government’s response to the situation regarding apprentices? It has not increased the subsidy for apprentice training by one cent in this year’s Budget. There has been no increase in subsidies for apprentices, despite the increased cost of training apprentices and the disincentive effects that that has had on employers considering training more apprentices. Instead, the Government has tried to palm off the responsibility for apprentices to the States, but the States have insisted that the Australian Government accept responsibility for this ultra-important policy area.

Thus the Government has no answers at present. Unless it comes up with something soon the prospects of many young people who wish to be apprenticed being allowed to do so will be very poor. The Government must come up with a policy which will enable young people to obtain apprenticeships, regardless of the state of the economy. As things stand, the chance of a young person obtaining an apprenticeship depends on the state of the trade cycle when he leaves school. This is clearly a most unfair and unfortunate matter. The desperate state of would-be apprentices at the moment is demonstrated by the fact that- again according to Mr Kirby- current applicants for apprenticeship in the main trades, and I emphasise in the main trades, exceed opportunities in many areas by a ratio greater than 100 to 1. 1 ask honourable members to note the tremendous excess of applicants for apprenticeships over the number of apprenticeship positions available. In some of the main trades the ratio is more than 100 to 1. In this situation it seems difficult to explain how the Government can justify keeping the apprentice subsidy at $24 a week, on average, when the level of unemployment benefit is $36 a week for under- 18-year- olds. If it is worth paying $36 a week to a person who is out of work surely it is worth having that person in a job, particularly one which gives him training in essential skills. One would have thought this point was almost axiomatic in the current circumstances.

The Opposition recognises that if the structural problems of youth are to be overcome, greatly increased funds will need to be channelled into technical education. The Labor Government set up the Technical and Further Education Commission and introduced a program of funding for technical education that was decades overdue as a result of shameful neglect of this area by the Liberal and Country Party governments throughout the 1950s and 1960s. The Opposition acknowledges that technical education has received substantially increased funding in this year’s Budget, but the backlog is so enormous that a much increased effort is needed. This is demonstrated by the fact that despite the considerably reduced apprentice intakes and high rates of terminations and suspensions of apprenticeships in the current circumstances, more than 1000 apprentices in Victoria still could not be accommodated in technical colleges last year. Quite clearly, a much greater effort- much more than is being done at present- is needed in the area of technical education. In relation to job creation programs, the Government has wiped out the Regional Employment Development scheme. Also, it has not made any unemployment grants to the States. This is another area where employment opportunities for youth could be provided.

Mr DEPUTY SPEAKER (Mr Giles:
ANGAS, SOUTH AUSTRALIA

-Order The honourable member’s time has expired.

Mr STREET:
Minister for Employment and Industrial Relations · Corangamite · LP

– I welcome the new-found interest of the Opposition in this very important issue. If the honourable member for Gellibrand (Mr Willis) had paid more attention to speeches I have made during the last few months he would have been better informed about this matter and would not have made so many mistakes in the speech he has just given. What the Opposition is now doing is attacking the disastrous results of its own disastrous policies.

Mr Willis:

– Come on, you do not believe that.

Mr STREET:

– It is a fact. The honourable member also made many errors of fact. He referred to the number of unemployed now being higher than the number of unemployed at the same time last year. But the honourable member did not bother to tell the House that in addition to the number of registered unemployed at this time last year 26 000 people were employed under the RED scheme. If that fact is taken into account the number of unemployed now is about 7000 less than the number of unemployed at this time last year. I am not saying that the position is satisfactory, but I repeat that the number of unemployed now is 7000 less than the number of unemployed at this time last year. The Budget, despite the honourable member’s allegations, is not predicated on an increase in unemployment. I do not intend to go over the figures that have been presented to the House by the Treasurer (Mr Lynch) on many occasions, but they give the lie to the honourable member. Then he referred to the reduction in people employed under the NEAT scheme, saying that the numbers had gone down from 14 000 to about 7500. But he did not say that the numbers went down from 14 000 to 7700 before the Labor Government lost office. Now the figures are climbing again.

Mr Willis:

-They were 14 000 at this time last year.

Mr STREET:

-They were not. The plain fact is that the honourable member said that the numbers employed under the NEAT scheme had declined from a peak of 14 000. 1 am saying that the numbers declined from a peak of 14 000 to 7700 during the time the Labor Government was in office. The numbers employed under the NEAT scheme are now climbing, and I am glad to say that the increased emphasis on in-plant training, as distinct from the much longer tertiary courses to which the Labor Government gave priority, will be not only of more immediate benefit to the people undergoing training but also far more advantageous to the community as a whole because these people enter the productive work force so much more quickly.

The honourable member referred to the reduction in the intake of apprentices. It is perfectly true that the number of apprentices has declined. The reasons for this decline are contained in the statement I made this afternoon on the Government’s wages policy. The cost of training apprentices has risen by between 30 per cent and 40 per cent as a result of the disastrous economic policies of the Labor Government over the last 2 years.

Mr Young:

– That is claptrap.

Mr STREET:

– It is not claptrap. I will repeat it. The cost of training apprentices has increased by between 30 per cent and 40 per cent over the last couple of years. It is no wonder that in these circumstances young people are finding it difficult to obtain suitable apprenticeships. It may interest the honourable member to know that at the recent conference of Labor Ministers in Adelaide we agreed to have a special meeting in November after a special working party which we set up has reported back to us on suggestions for improving the apprenticeship system in Australia.

Mr Young:

– How will increasing the payroll tax overcome it?

Mr STREET:

– That is an interesting point. The proposal to increase the payroll tax on wages paid to tradesmen together with a complete exemption from payroll tax of wages paid to apprentices was never pointed up. In fact -

Mr Innes:

– What have the States said?

Mr STREET:

-A couple of the States would have bought it, but there is no point in having something that is not acceptable Australia-wide. I accept that. So we have to try to find something better. But I did put forward a constructive suggestion that would encourage those who have a responsibility for training apprentices- that is, the employers of tradesmen- to make some contribution to it.

As I have already said in this House, when the Labor Government assumed office it inherited an unemployment rate of about 135 000 and when it left office the rate was 328 000. When the Labor Government came to power there were 80 000 young people unemployed and when it left office there were 152 000 unemployed. So not only did the previous Administration create the highest level of unemployment in Australia since the Depression by its hopeless ineptitude, its economic illiteracy and its blind ideology but also the youth unemployment rate almost doubled. That is a tragic record and a tragic performance for a Party that says it has some concern for people. Having inherited Australia’s worst unemployment situation for over 40 years, the Government immediately set about instituting the measures essential for economic recovery. We said that it would not be easy. We said that it would not be quick. But if Australia had been allowed to go on in the way in which it was going under the Labor Party we were headed for economic collapse.

The Government and the community at large are well aware that, by the end of last year, the unemployment level had risen to the figures that I have just mentioned. Besides the economic impact of that there is, as the Treasurer stressed in his Budget Speech, the personal difficulties of school leavers and other young people who have been denied jobs by the policies of our predecessors. As the honourable member for Gellibrand correctly pointed out, the problem is more than a problem of school leavers. The Government’s objective is to overcome the major distortions to the economy that have become real barriers to a return to full employment. That, of course, means full employment for young people as well as adults. The present youth employment problems reflect the severe effects of the present recession of young people.

At the same time, there is evidence of a disturbing longer term trend that is common to almost all advanced countries. It is no excuse for complacency but at least we in Australia are not experiencing the horrendous levels of youth unemployment, which have reached 40 per cent or more, in some urban centres overseas.

I draw attention to the fact, and mentioned earlier, that I am on public record as having sounded essentially the same warnings with respect to the youth unemployment situation as were contained in the address by the senior official of my Department that was extensively reported in the Press and that has been referred to in this debate. The latest available unemployment figures for the younger age group relate to May 1976. They have been derived from the Australian Bureau of Statistics quarterly labour force surveys, as our own statistics do not go into detail as to the unemployment rate for different age groups. As at May 1976, the unemployment rate for persons under 20 years of age was 12.5 per cent or more than 4 times the rate of 3 per cent of those aged 20 and over.

But several points should be noted about this high level of youth unemployment. Firstly, unemployment among those under 20 years of age has been in excess of 10 per cent since November 1974. 1 did not hear much fuss being made about it then by the Australian Labor Party. Indeed, it reached a peak of 15.6 per cent in November 1 975. 1 did not hear much about it then from the Labor Party. That was its last month in office. It is to be observed, therefore, that during the last 12 months in office of the Labor Government these inordinately high youth unemployment rates prevailed.

While it is true that nearly 40 per cent of the total unemployed at present are under 20 years of age, it is to be borne in mind that this level of representation of youth among the unemployed is by no means unique. In fact, this level of representation broadly holds irrespective of the state of the economy. The fact that the unemployment rate among young people is 4 times the rate among adult workers, while a completely accurate statement, it also needs to be viewed in perspective. In particular, there should be no assumption that the unemployment rates for those under 20 years of age should be the same as those for adult workers. Youth unemployment rates throughout the 1960s and 1970s have always been higher than those for adult workers. That, of course, is largely to be expected given the ‘new entrant’ status of young people in the labour market. The concentrated inflow of school leavers always takes some time to be accommodated and is reflected in seasonal increases in the recorded unemployment rates. Again, the rate of job turnover is considerably higher among younger workers and is also reflected in the unemployment rate. On the other hand, there is no denying that there is now a greater relative disparity between the unemployment rates among the young and those for the remainder of the work force.

The Government has already taken a number of steps in relation to youth employment. In terms of existing programs, for example, we have continued our support through the special assistance program under the National Employment and Training scheme for apprentices whose jobs are in jeopardy. This program is financed under the NEAT scheme and provides financial assistance to employers who, because of financial difficulties or shortages of work, are forced to seek the cancellation of the indentures of apprentices in their employment. It also permits assistance to be offered to employers who would otherwise be unable to accept apprentices whose indentures already have had to be cancelled through the difficulties of their former employers. It also enables apprentices who have uncompleted commitments for block release training to be assisted while attending schooling and this in turn enables them to be placed more readily with new employers.

Since this program ‘s inception more than 5000 apprentices have been assisted. Currently there are 1630 apprentices who are known to be temporarily out of trade for whom assistance will be or is being sought. During July 224 apprentices were found work through this program but without the need for financial assistance and 852 were assisted through the special NEAT program. The estimated expenditure in this program this financial year is $ 1 .6m.

Secondly, I invite honourable members to examine our expenditure on education for this financial year and to discover the importance that we place on the vocational preparation of young people for employment in a modern economy. It will be observed, as indeed it was conceded by the honourable member for Gellibrand, that the expenditure on technical and further education has been at a higher growth rate than the expenditure in respect of other forms of education. Thirdly, mention also should be made of the consideration presently being given in the context of a standing committee of the National Training Council, with the full support of my Department, to the development of special programs under the NEAT scheme for unemployed youth. Fourthly, youth unemployment was one of the matters of particular concern to the Government that was discussed at the conferences held recently between the Government and trade unions on the one hand and the Government and employers on the other. Continuing discussions with both of those groups on the subject of youth unemployment, among other things, are to be held.

Finally, through the offices of the Commonwealth Employment Service, the Government provides not only job placement assistance but also job information and counselling. In relation to job information, career reference centres have been established in all capital cities and some major provincial cities throughout Australia. Over 200 000 inquiries were made at career references centres in the last financial year. The offices of the CES also have several hundred counsellors who visit schools through the year with advice and information on careers. In the last financial year over 140 000 school leavers received such information and advice. Both the employment offices and the regional offices are equipped with trained psychologists, who provided vocational guidance to over 24 000 people in the last financial year. Both my Department and I encourage and support publications such as Opportunities for School-Leavers in Australia 1976-77, which assist generally in the counselling of school leavers. All of those measures have, taken together, had a considerable impact on the problem. For example, the number of school leavers registered for unemployment, which is a substantial component of the total youth unemployment, fell from a peak of 60 000 in December 1975 to a little over 12 000 last month.

I turn now to a brief comment on the longer term trend. Two features should be noted. The first is that the origins of the long upward trend in youth unemployment lie back in the last decade. I can find little evidence to indicate that the previous Labor Government was prepared to come to grips with this disturbing development. Indeed, by its actions the previous Government actually exacerbated the trend. I have referred to the disastrous effects upon young people of the wages explosion of 1974 and 1975.

Mr Willis:

-Did we do that?

Mr STREET:

– Yes, of course you did. You thought you could spend your way out of unemployment, and in your efforts to spend your way out of unemployment you trebled it. The only action of the previous Government to which I can point as containing any acknowledgement of the youth unemployment problem is the appointment of a working party to examine the transition between secondary education and employment. The report of this working party is expected to be received shortly by the Australian Education Council, and I await its findings with considerable interest.

Mr DEPUTY SPEAKER:

-Order! The Minister’s time has expired.

Mr SCHOLES:
Corio

– It is a sad occurrence to come into a debate following the Minister for Employment and Industrial Relations (Mr Street) when young people who will be seeking jobs at the end of this year face such a hopeless future. Apart from some political cliches, there was very little in what the Minister said which will give any encouragement to these people. The Minister should be aware that the May survey of the employment market showed that 180 000 teenagers were unemployed. At the end of this year another 200 000 teenagers will go on to the employment market. There is a very serious problem. Hysterical or historic commentary does not alter the fact that the present Government came into power on a policy of restoring employment opportunities. It has gone through a period of regression and repression of employment opportunities in those areas directly under its control without making any serious impact on unemployment or creating new employment opportunities. Promises given to the Australian community and believed by the Australian community last year have been broken.

Let me give some indication of the nature of the problem of finding employment for young people, although the problem is not restricted to young people. The August unemployment figures show that in the Colac employment district in the Minister’s electorate 227 junior males were registered for employment at the end of August and there was one vacancy. There were 212 junior females registered for employment and there were 3 vacancies. A similar set of figures relative to junior employment can be found for almost every other employment district in Australia. The Government is restricting Public Service intake and is cutting back on employment-creating programs. It is all very well to criticise the fact that 30 000 people were employed under the Regional Employment Development scheme last year. At least they were working, and even if the productive output of the scheme was only 50 per cent of the normally expected productive output it was at least some productive output in return for the expenditure of public money. Many of the projects which were funded under the scheme were worthwhile projects which brought about worthwhile results.

Mr Bourchier:

– At what cost per head?

Mr SCHOLES:

-No more cost than the present cost of paying people unemployment benefit with no return to the community, only a serious loss of morale and confidence to the people concerned. If the honourable member for Bendigo is interested, I suggest that he go along at some time to the Department of Employment and Industrial Relations and sit in on one of the discussions which young people have with officers of that Department and become acquainted with the broken morale which exists among people genuinely seeking employment, who daily are called dole bludgers by people like the honourable member.

Mr Bourchier:

– I have never called them that in my life.

Mr SCHOLES:

-I am glad the honourable member does not. Too many people do. The Minister’s own Department has withdrawn support for apprentice training schemes in the technical section of Telecom Australia. It has said that it does not consider this a reasonable area of expenditure. There is a serious shortage of tradesmen in the country. There is an oversupply of persons seeking apprenticeships, and the minister’s Department has withdrawn financial support in that area. The suggestion of Commonwealth withdrawal of support for apprenticeship schemes and the transfer of responsibility for these schemes to the States was an abdication of responsibility of the worst type.

Mr Street:

– It was never proposed.

Mr SCHOLES:

– I would hope it was never proposed. The suggestions are and all of the evidence is that the Commonwealth is withdrawing from every area in which it can avoid its responsibilities and is seeking to use the cover of the word ‘federalism’, which is the latest cliche, for its non-involvement.

Mr Street:

– It was never proposed that we withdraw from apprenticeships. The honourable member should check his facts first.

Mr SCHOLES:

-I can only rely on the Minister’s statement.

Mr Street:

– You do not. You rely on inaccurate leaks.

Mr Kelly:

– I am sorry, Tony.

Mr SCHOLES:

-I would not expect the honourable member for Wakefield to be concerned. His main object is to create as much unemployment as possible by transferring employment from Australia to other countries. He wants aU protection removed. The Minister said that at the time the Government came to office the economy was sound and that it was the actions of the Labor Government which created the conditions which pose a threat to employment. I challenge that. The most significant factor of the economic problems which led to high inflation was the inability of the Liberal-Country Party, which lost office in 1972, to face up to the problem of the value of the currency. Because of the mineral boom, pressure of a type which had not been experienced previously was placed on the Australian dollar. The currency supply increased in the latter part of 1972 by an exorbitant amount, placing pressure on Australian manufacturing industry from which it has not recovered and most likely will never recover. The present Government is relying on a recovery by manufacturing industry to absorb those currently unemployed and to re-establish the level of employment which we suggest is desirable. That recovery will not occur. Even if demand and confidence are restored to the levels which existed in mid- 1974, not sufficient job opportunities will be created to absorb the people who are currently out of work and those who will be coming on to the work market in the near future.

Changed procedures and methods of employment and marketing have reduced job opportunities in the areas where most young girls are seeking employment and have reduced job opportunities for trained young people. The Government, as an act of policy, has withdrawn itself from those areas of employment-creation which would absorb the trained young people who are currently in universities and colleges of advanced education whose educational period is about to come to an end and who are about to move off the end of the education production line at a time when the jobs for which they started training no longer exist. The National Employment and Training scheme was one of a number of training schemes devised to allow people in the work force to train so that their skills were applicable to the jobs which were available. The Government forced a large number of people out of this scheme during training by the changes it undertook in the financing of the scheme, making it financially impossible for large numbers of people to carry on.

Mr Street:

– The honourable member does not look at the figures. They do not support his argument.

Mr SCHOLES:

-The facts are that I have on my books the names of people who have been forced out of this scheme before completing thencourses. The problem with the honourable gentleman is that his area has a similar set of employment figures to mine, but obviously he is not terribly worried about that. I am worried. For his information, the Minister’s electorate has an unemployment rate at the moment of 1 1.5 per cent, which I should think would worry any of us.

Mr DEPUTY SPEAKER:

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

Mr KELLY:
Wakefield

-Mr Deputy Speaker, I have been attacked bitterly and I should like to make a personal explanation.

Mr DEPUTY SPEAKER:

– Does the honourable member claim to have been misrepresented?

Mr KELLY:

– Yes. The honourable member for Corio (Mr Scholes), in a most uncharacteristic personal attack on me, said that I, the honourable member for Wakefield, was interested only in exporting employment from this country. He should know that my main endeavour since I have been in this place has been to have a healthy export industry so that employment opportunities could occur in that area. I think it is most unfair and unkind that the honourable member for Corio should make a personal attack in that way.

Mr CHIPP:
Hotham

-I am pleased to be participating in this debate because I agree with the terms of the matter of public importance, namely, the worsening employment prospects for young people. I agree with that because it is a fact- a very sad fact about today. Like too many debates in this place, we have heard two speakers from the Opposition- I listened very carefully to each word they said- but we have not heard any constructive suggestions. Unfortunately, this is not only an economic problem, it is also a social problem and human problem. I should have thought that if any subject could be debated in a bipartisan or objective way it would be the problem of unemployment of young people of this country.

I should like to refer to a survey conducted by the Commonwealth Employment Service, which found that about 50 per cent of young people unemployed had attempted education only up to Form 3 level. Their work experience tended to be at less than skilled level. They are the people who for one reason or another coped less successfully with the education system, and the pattern is repeating itself in their experience in the labour market. Interviews with the young conducted by the CES suggest that they are not as content with their lot on the dole as some might believe. Those with the better emotional and family resources have the least difficulty. Some even have hobby-type interests. Not surprisingly, the majority have trouble filling in their time. They are not only idle but also bored. Not surprisingly also, they stay in bed, hang around coffee shops and drift into petty crime. None of those activities strengthens their capacity or desire to complete for employment. Were the unemployment to be prolonged, it could become a life style.

Looking at the problem in human terms, that is a fairly devastating prognosis of what we can expect for a considerable number of Australian young people. To get it into context, and not necessarily to make a political point, let me quote some figures. When Labor came into office the number of unemployed was 136 000. When it went out of office the number of unemployed was 328 000. As far as young people are concerned, when Labor came to office 80 000 young people were unemployed. When it went out of office, 1S2 000 young people were unemployed. That is about the situation today, except that in November this year another 80 000 young people will join the work force, and most of them will not be able to find employment. To give an example- this is why I agree with the terms of the matter of public importance and believe that unemployment is going to get worse- in speaking to the Retail Traders Association, I have been told that on a national basis, by the end of May last year it had absorbed 3 1 per cent of all school leavers, which is a significant proportion. From my discussions with friends in the retail trade, I understand that next year they will be able to absorb nothing like that number. By the end of May this year 15 per cent of school leavers still did not have a job. I am quite persuaded that next year the situation will be worse.

This is not to attach blame to this Government. If all we are to do here in debates on human problems is try to attach blame we might score a point here and there, but are we going to help the basic problem? The point I make is that this is a very big problem in human and emotional terms. Youth unemployment is part of total unemployment, except that as unemployment generally gets higher youth unemployment, comparatively speaking, gets higher still and out of proportion. Recent projections of the

Australian population by the National Population Inquiry headed by Professor Borne indicate that the proportion of the population represented by the younger age groups will reach a peak in 1 976- that is this year- of 1 7.6 per cent and that the population will increase at a faster rate in the 15 to 24 age group for the remainder of the century. So this year and next year, simply because of the demographic structure of our population, the problem is going to get worse. In August 1975 the unemployment rate for the 15 to 19 age group was 12 per cent, compared with a rate of 4 per cent for the total work force. So we have a structure where the youth are the ones who are suffering and who will continue to suffer. There is the problem.

One of the devastating things that happened in the last 3 years was the pace-setting techniquethe pace-setting philosophy of Clyde Cameron, the honourable member for Hindmarsh, and his Government. When the Minister for Employment and Industrial Relations (Mr Street) was speaking a moment ago I heard the most mindboggling interjection from the honourable member for Gellibrand (Mr Willis). The Minister said something about wage explosions, and with an air of consummate naivete the honourable member for Gellibrand interjected and said: ‘Did we do that?’ The Labor Government deliberately and wilfully set off on a course of pace-setting in the Public Service. If there is one sure way of creating inflation it is to engineer a situation where wages increase ahead of productivity, and that is precisely what the Labor Government did. It was very honest about it. The Labor Government said that it was doing this despite the warnings that came from our side of the House at the time. I believe that there is more cause for worry than the present figures indicate because I suspect that there is now a permanent component of unemployed in the work force.

No matter what government is in office in this country, I think we can forget any thought of going back to the halcyon days of 1 per cent of the work force being unemployed. Like all members of Parliament, I go into the factories, and everywhere I go the managing director or the works manager says with great pride: ‘See that machine? It cost us $lm.’ Then he smiles and says: ‘But it is doing the work of 50 men. ‘ That situation exists right through the nation because labour has priced itself out of the market. It is a sad thing, a tragic thing, that has been done to the work force. I am pessimistic that even when we do return to conditions of economic buoyancy we will not be able to return to an unemployment rate of 1 per cent or 2 per cent. Certainly that situation is not of this Government’s making; it is now part of the system and built into it. The ridiculous mania for increasing wages at any cost has been devastating. Recently I was holidaying for 2 brief days on Lindeman Island, where I met many friends from the Great Barrier Reef islands. They told me of conditions there where young people of 16, 17 or 18 years of age were obtaining, because of the penalty rates inflicted on the industry, take-home pay of $140 a week. With double time for Saturdays and treble time for Sundays, they were obtaining a take-home pay of $140 a week, plus full board and accommodation. That industry cannot afford that sort of situation. That is why people are now leaving Australia in droves to go to Singapore and other places where costs are lower. There must be greater co-operation between academics and employers in the training and placement of school leavers. Education is too important a thing to be left to academics. I would like to see investigated a scheme of subsidising employers who might employ the unemployed, and I would like the co-operation of the unions in that regard. I would like the proposal for a selective Regional Employment and Development scheme, run by the good managers that we have in the ministry, looked at again. I support and I am happy with what the Government is doing about these things.

Mr DEPUTY SPEAKER:

-Order! The honourable member’s time has expired. I call the honourable member for Mackellar.

Motion (by Mr Bourchier) agreed to:

That the business of the day be called on.

APPROPRIATION BILL (No. 1) 1976-77 Second Reading (Budget Debate)

Debate resumed from 26 August, on motion by Mr Lynch:

That the Bill be now read a second time.

Upon which Mr Whitiam 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”.

Mr STEWART:
Lang

-This is the fourth economic statement made by the Treasurer (Mr Lynch) this year. The others were made on 4 March 1976, 25 March 1976, and the one that will always be remembered, that made on 20 May 1976. 1 leave aside the callous, uncoordinated, across the board, drastic cuts in government expenditure announced on 22 January before Parliament had even assembled. That first operation by the Treasurer, when he took his scalpel and slashed indiscriminately, reminded me of an operating scene in the television series M.A.S.H.-& great deal of noise and activity with little prospect of a successful operation. I ask: How many of those initial decisions made in haste and hatred stand unaltered today? Not very many at all. But that is a quite expected result. Decisions guided by hatred and vindictiveness can never achieve a desirable and sustained effect. Many of the economic decisions of this Government have been deliberately designed to decimate the much overdue social reforms introduced by the Labor Government. The welfare of the country and its people have been placed second to the personal spleen of the Prime Minister (Mr Malcolm Fraser) and many of his Ministers and advisers. In the short space of 9 months the social reform programs in Australia have been returned to the unsympathetic, neglectful days between 1949 and 1972.

The Budget Speech is supposed to be a major economic statement of any government. This one will go down as a rehash of the narrowminded, outmoded economic strategy first announced by the Treasurer in this House on 4 March, repeated on 25 March and again on 20 May 1976. In the general comments made by the Treasurer in all those speeches the only change in structure is his new phrase: ‘Double digit or single digit inflation’. I take that to mean above or below 10 per cent.

I want to take the House back to the economic climate operating in December 1972 when Labor was elected. Inflation was already on the move. Unemployment was rising. Prices and wages had commenced to gallop. Foreign capital was, and had been, entering Australia unchecked and uncontrolled. Exploitation in land, home, industrial and office development was rampant. Private enterprise had only just started to accept the fact that the golden years of laissezfaire capitalism had come to a halt but it had not then and still has not now any solutions. When Labor was elected in 1972 it inherited a time bomb. We were faced with the alternative of inflicting a drastic credit squeeze in our first Budget or going ahead and introducing some of the social reforms and innovative, imaginative programs which had been endorsed by the people in December 1972. So we went ahead to honour our promises. We anticipated the full support and co-operation of the public, business and the media, but that, unfortunately, was very short lived. Some say that our policies were introduced too quickly, too extravagantly. But now that our programs have been curtailed, cancelled or handed over to the States for funding by the States, the people are complaining about this Government’s shortsightedness in not recognising the merits of many of our reforms. Some of those people now complaining are the same people who complained of our haste and extravagance. I merely state that those programs would never have been introduced by any antiLabor, capitalistic government. We stand by most of the programs we introduced. They were long overdue. Their reintroduction and/or continuation will only be assured by the return of a Labor government at the next election.

Over the past few days I have taken the trouble to study again the 4 statements made by the Treasurer to thus House since March. Predictions on improvements in the economy are as far astray in most instances as any made by a Labor Treasurer between 1973 and 1975. The Treasurer’s assessments of economic indicators have been proven wrong time and time again. On page 4 of his Budget Speech the Treasurer mentioned 2 key questions for a fully assured foundation for recovery. The first of those questions is related to the need for the main components of private demand- consumption and business investment to co-operate in building a continuing recovery. The second question is related to the extent to which the growth in demand will be met from imports rather than from local production and local jobs. In other words, the public is asked to spend more freely from their record savings, and private enterprise is asked to invest in new plant and equipment, to increase production and job opportunities, and to concentrate on exporting rather than importing.

In all his speeches the Treasurer has stressed those 2 factors, but his pleas have fallen on barren ground. Savings are not declining to any great extent, as the Treasurer claims they are, and business is not expanding rapidly enough. The figures shown on page 1 1 of Statement No. 1 of the Budget Papers indicate that the proportion of savings to household disposable income in the June quarter 1976 was 13.1 per cent, that in the June quarter 1975 it was 14.9 per cent, and that in the June quarter 1974 it was 14.8 per cent, a decrease when compared with the same quarter last year of only 1.8 per cent and of 1.7 per cent when compared with the figures of 2 years ago. If we look at some of the other monetary indicators I take these figures from the Treasury publication Round-up of Economic Statistics No. 43, August 1976- we find that major trading bank deposits rose by $950m in June. A good deal of that must be business and private savings. New and increased lending decreased in May- June compared with April by $2 lm. I suggest that that means less new money for consumer spending and development. Subscriptions to the July loan totalled a record of $725m, and $407m of that figure came from the non-bank sector, which again indicates greater householder savings.

The position on consumer spending, therefore, appears to me not to be as encouraging as the Treasurer tries to make out. In any case, a decrease in savings of 1.8 per cent compared with 12 months ago is rather grasping at a straw. Motor car sales and industrial production figures also give the lie to the Treasurer’s assessment that consumer spending is on the increase. I agree that greater consumption spending is an essential in combating inflation but I am yet to hear any suggestions from any source which will encourage the populace to spend more freely unless this Government is prepared to make greater use of the public sector to re-engender the necessary confidence. We cannot allow our employment situation to continue to worsen, our building industry to continue to lag, our productivity to operate below capacity and imports to flood into the country, and expect either the community or industry to make the first move to rebuild confidence in the future of our nation. This Government is placing too much reliance on private enterprise to do a job which, from the middle of the 1 960s, it was unable to handle.

My 3 years experience as Minister assisting the Treasurer has convinced me that private enterprise reacts much too quickly and much too fearfully to changes in economic circumstances. It has confidence in itself and the country only when things are going smoothly. It retreats to its funkholes and calls on the government to grant incentives, taxation concessions, depreciation allowances and various other types of assistance when competition, either domestically or from overseas, becomes a little intense. The Treasurer admits as much in his Budget Speech when he says:

Businessmen will emerge further from their shell-holes and start buying plant, equipment and new buildings, restocking 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.

I just cannot swallow the repeated assertions that all the troubles in our economy are a direct result of the election of a Labor government in December 1972. Manufacturing industry had began to run into trouble in the middle 1960s when our domestic market was not large enough to accommodate our production. Industry was too fragmented and restructuring of some industries had become essential but nothing was done by the previous Liberal Country Party government. It was in the middle 1960s when businessmen started to go into their funkholes not their shell-holes, as the Treasurer said.

Secondary industry lost confidence about that time and still has not regained it. Businessmen want profits. To get them, they must take risks. If businessmen require a guarantee of no inflation and higher profits before they take initiatives this country will continue to face its present situation for a far greater number of years. I do not mean that private enterprise has to run all the risks; government must play its part. I do not think this Budget contains sufficient evidence of goodwill or confidence by this Government. The 2 questions posed by the Treasurer are no doubt the crux of the solution of our inflationary problems. Our people must be encouraged to spend more and to produce more. Our industries will need to lower costs by using more efficient plant and machinery and to seek export markets. In the meantime, this Government must regenerate the public sector, particulary in the building industry. One suggestion of assistance to the private sector I make is that there should be introduced an improved form of export incentives, particularly for manufactured items which previously had not been in the export arena.

Mr DEPUTY SPEAKER:

-Order! Before I leave the chair I should say that the honourable member said that the Prime Minister exercised his personal spleen. That is getting very close to imputing wrong motives. I did not pull him up because I did not think it was other than a borderline breach.

Sitting suspended from 6.1 to 8 p.m.

Mr STEWART:

-Before the suspension of the sitting I was making a suggestion that I felt might stimulate the private sector of the community and that was the introduction of a form of export incentives with emphasis on the export of manufactured items which previously have not been in the export arena. I am unable to list the manufactured goods which have some prospect for export. Businessmen and others to whom I have spoken on this matter have been unable to make many constructive suggestions. Therefore, I suggest that a task force be appointed to assess the export potential of our industries to recommend an improved export incentive scheme as a matter of urgency.

I summerise my approach to this the first and last Lynch budget in this way: Public sector spending has been too drastically and haphazardously reduced. Incentives to industry are incorrectly directed. Pleas to the consumer and industry to increase spending and production will not have any real effect unless the Government itself demonstrates that it has confidence in Australia’s future by definite and sustained action to reduce unemployment, to increase production, to maintain industrial peace and to provide firm guidelines on future policy towards primary, secondary and the mining industries. Prayers and pious exhortations do not make for good government, and that is all this Budget has going for it. It will fail.

There are many specific areas in this Budget which require detailed criticism, but I will keep my comments until the debate on the Estimates. The amendment moved by the Leader of the Opposition (Mr E. G. Whitiam) reads:

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’.

That amendment summarises the Labor Party approach to this Budget. I support the amendment.

Mr ANTHONY:
Minister for National Resources · Richmond · NCP/NP

– I am not particularly interested in whether the speech by the Leader of the Opposition (Mr E. G. Whitlam) marks a political comeback. If a comeback is his purpose all I can say is that he has a fair way to go down the track. What does interest me is whether he is able to make any worthwhile and constructive contribution to the task of restoring the economy. What is clear from the speech by the Leader of the Opposition is that he still does not understand why the people of Australia rejected him last year. What is clear is the failure of the Leader of the Opposition, and the Opposition generally, to understand what caused our present economic problems and what must be done to correct them. When the Leader of the Opposition says that the Budget puts big business first and people last all he is doing is displaying for all to see his utter ignorance of the nature of our economic problems and his ignorance of their cause. The irony is that no one in Australia should be better qualified to discuss Australia’s economic difficulties because no one has contributed to them more than the Leader of the Opposition himself.

The Labor Party still seems to believe that all the Government needs to do is to spend its way out of trouble and all will be well. That is the way the Whitlam Government tried to do things and the mess it created is still with us. The basis of the Government’s approach to cleaning up the mess bequeathed to it by the Whitlam Government is restraint on government spending leading to control of inflation and encouragement of the private sector. It was excessive government spending that was largely the cause of our troubles. It will be strict control of spending that will largely be the cure. In countries that I have recently visited there is a very strong view, backed by performance, that success in bringing inflation under control lies to a very real degree in strict control of government spending. Control of government spending is widely acknowledged as a vital part of the attack on inflation. About the only people who do not accept this approach and who do not seem to understand it are the Leader of the Opposition and his colleagues. What they are doing now is continuing their irresponsible approach to government spending. They did not understand what they were doing when they were in office and they do not seem to care whether they continue that approach which caused so much damage.

A moment’s thought should show anyone that no one likes bringing down a budget which reduces expenditure, but there are times when responsibility must take priority over the pursuit of popularity. This Government, unlike the

Whitlam Government, is willing to take that approach and to accept the criticism such an approach must carry with it. The reaction overseas to the Budget has been favourable. I thought it might be interesting to quote what the finance writer of the Manchester Guardian had to say. He said:

The Budget proposals put forward by the ruling coalition in Australia will be welcomed by those immediately concerned . . . the people and industry in Australia.

The Budget proposals should also encourage those who nourish the hope that one day a British Government will be persuaded to think along similar lines.

The heart of the Government’s economic strategythis must be said over and over until everyone understands it- is control of inflation. When we set that objective for ourselves we are setting the right objective for the nation. Claims by the Leader of the Opposition that we are callously ignoring the needs of people when we adopt this strategy are just so much rubbish. Inflation is the cause of most of the problems which beset our people. Inflation is certainly the fundamental factor in the problems of the agricultural sector, compounded, of course, by marketing difficulties, drought and so on. Inflation is a major factor in the viability or otherwise of our mining industry. It will determine whether some of our major new projects get under way. Inflation is a most destructive influence on the competitiveness of our manufacturing industries. Inflation is driving far too many of them away from Australia and forcing them to set up operations in other countries which have not suffered from the kind of administration we saw in this country from 1972 to 1975. Inflation is one of the most damaging factors in destroying the capacity of governments to carry out worthwhile community programs.

As inflation waters down the worth of money, it means that fewer houses can be built with the same amount of money, that there will be fewer roads, fewer hospitals, fewer teachers and that fewer services of all kinds can be provided. That is why the control of inflation must be the central plank in our economic strategy. I invite the Leader of the Opposition, every member of his party and every member of this House- in fact, every Australian- to consider very carefully the following proposition: Inflation is a fundamental cause of unemployment. Let me repeat that because it is something that is not widely understood but which should be understood. The fundamental cause of unemployment is inflation. What a tragedy it was that the Australian Labor Party did not understand this when it was in office. What a scandal it is that it still does not understand it.

Inflation, by reducing profitability, by inhibiting new investment, by cutting competitiveness, by making labour too expensive, by destroying business confidence, by driving manufacturers away from Australia and by preventing the development of new projects destroys the capacity to provide jobs, to keep people in jobs and to create new jobs. There can be no permanent solution to the unemployment problem until inflation is brought under control. The Leader of the Opposition can resort to all the rhetoric and phony concern that he likes, but the fact will remain that until he comes to grips with inflation there is not the slightest hope that a real, lasting answer can be found to the tragic unemployment that grips this country. That is why the Government must be resolute in rejecting appeals to plunge into big spending programs to create temporary jobs. That would be an easy thing to do. None of us likes seeing people out of work with all the personal hardship, the tragedy and the humiliation that experience can bring with it. But the Government is determined that this great human problem must be solved on a lasting basis, not just on a temporary basis that lays the foundation for even worse trouble in the future.

The other thing that the Opposition does not seem to understand is that we cannot have an economic revival unless we revive the private, productive sector of the economy. We cannot help the community generally unless the private sector produces the resources to enable us to do it. That is a simple fact which the members of the Labor Party never seem to understand. When the Whitiam Government set about its business bashing operations in 1973, it laid the foundations for much of the mess the present Government has to try to correct and which it will correct with the support of the Australian people. The Whitiam Government must take the credit- if that is the word- for much of the inflation and the consequent unemployment that is now being suffered. Our approach, in contrast to the attacks which Labor has made and still makes on the private sector, is to stimulate and to encourage the private sector so that it can provide jobs for the people. That is why we are giving incentives to the private sector- investment incentives and taxation incentives. If anyone wants to call these things handouts, let it be understood that they are handouts with a tremendous significance for the whole Australian community, and for the work force in particular, because they are the key to a strong, productive and expanding economy in the private sector of the community.

I have spoken of the damaging effects of inflation. But there is another factor which is causing a great deal of damage to this nation. I refer to industrial trouble. Not only are strikes, stoppages and bans- often for political purposes- jeopardising our chances of economic recovery, but also they are damaging Australia’s reputation as a reliable and stable trader. These actions are undermining confidence in Australia as a sound and worthwhile place for investment. One has only to talk to people in other countries, as I have recently, to discover their real concern about Australia’s dependability and reliability. People who want to trade with us, buy things from us or invest in Australia all ask the same question: What are we doing about inflation and what are we doing about strikes? No doubt, what I am saying will be described as union bashing. It seems that any statement on this matter always is described that way no matter how factual or true the statement may be. Let us not forget that some union leaders and some of their followers- I emphasise the word ‘some’- seem to have little hesitation in going in for Australian bashing when they feel Uke it. They suggest, apparently, that the political strike- the strike which aims to determine or influence national policy in defiance of the responsibilities of an elected government- is a legitimate weapon. They care nothing for the disruption, the hardship and the destruction which their action causes. They care nothing for the financial losses, the dishonoured contracts, the deliveries and the increased costs which they cause. They care nothing for the lowering of Australia ‘s reputation in the eyes of the world. They do not understand- or do theythe effects of their actions in jeopardising industrial expansion and in forcing Australian firms to look elsewhere for a more dependable and more economic environment in which to carry on their operations. They do not want to know about the jobs they destroy as a consequence of the damage they cause to industry and to trade.

If this country is to recover from the economic illness it caught under the Labor Administration, the goodwil and the co-operation of all sections of the community will be needed. The job will be hard enough without the burden and complication of unnecessary and unwarranted stoppages and strikes, especially those motivated politically. If the Leader of the Opposition and his colleagues have any concern for the good of this country and its people, they will make it thenbusiness to use whatever influence they can to persuade these militant people to change thenways. They have done enough damage already.

They must understand that the nation as a whole cannot put up with it for too much longer.

Before I turn to the area that is my particular responsibility- that of rnining and energy- I want to make some reference to the situation in the rural industries. Some of our rural industries are in a situation of extreme difficulty. Many people thought that the election of a LiberalNational Country Party Government would, in some miraculous way, almost overnight bring these difficulties to an end. But, of course, the fact is that these difficulties are very deeply entrenched and they are not easily amenable to solution. There is inflation- the most serious part of the problem facing agricultural industries. There are real marketing problems. A great deal of my recent visit overseas was devoted to explaining these marketing problems in Britain and Germany and to the director-general of GATT- the General Agreement on Tariffs and Trade organisation- in Geneva, so that the impact on Australian producers of the actions in these countries and the actions of people in other countries might be better understood.

I think that it would be unrealistic to expect solutions to these deep problems of the farm sector to be found in a Budget. Despite this, the Government has shown very clear evidence of its understandings of the rural situation and has responded to a very important degree. In fact, it is fair to say that throughout this year the Government and the Minister for Primary Industry (Mr Sinclair) have responded as generously as they possibly could in the light of the very urgent needs to apply the most stringent controls on Government expenditure in the interests of bringing inflation under control. It should not be necessary for me to remind any farmer that the most valuable thing the Government can do for him is to control costs. The leaders of the farming organisations do realise this and that is why they have so strongly supported the Government’s economic strategy.

The Government this year has taken many steps to assist the agricultural industries- steps on the superphosphate bounty, the meat export levy, the investment allowance, rural reconstruction, dried vine fruits stabilisation, loans to canneries, protection against orange juice imports, the underwriting for skim milk powder, casein, butter and cheese, dairy adjustment, tuberculosis and brucellosis eradication, forestry, an increase in the wool floor price, drought relief assistance and unemployment benefits for farmers. In the Budget, we have gone further with help for beef producers and several other areas.

The most significant Budget item for farmers is the income equalisation deposit scheme which I believe will prove very beneficial in the future. The Government is very much aware of the problems of the primary sector of the economy and will continue to do all it can responsibily do to help find answers to these problems.

In the mining and energy areas there were a number of things that could be done in the Budget and which needed to be done to stimulate a revival and to repair the damage done by the Labor Party. During the last election campaign the coalition parties undertook to revive the petroleum and mining industries in this country. The Budget gave us our first real opportunity to begin that task. We believe the Budget measures will provide a significant boost to the mining sector and will provide a good basis on which the industry can attract the much needed finance required to develop it to its full potential. The new policies will encourage resources to move from the public sector, from overseas, and from within the Australian economy into our mining industry- one of the most efficient, low-cost users of resources.

The mining industry is of vital importance to Australia and no government or community can afford to ignore its problems as the Whitlam Government did. The mining sector of the economy faces a particular problem- a combination of difficulties and risks of which the present Government is well aware and which the changes to the mining taxation law in 1974 completely failed to recognise. Mine products, like farm products, are primary products which are traded in world markets and which are often subject to widely fluctuating prices. Also the mining industries typically require extremely large investment. Furthermore, mines are often located in remote areas, making the capital requirement- that is, infrastructure- even larger than it would be otherwise and eliminating the advantage to the industry of the infrastructure which is commonly available in more settled areas. These 3 characteristics all add up to exceptionally high risk for mining enterprises. The Government’s approach to these enterprises must recognise that risk.

Most of our international competitors treat their rnining industries in a much more generous manner than Australia has done in recent years. (Extension of time granted). Overseas mining companies live under tax regimes which grant generous depletion allowances, tax-free holidays and in many cases, immediate write-off of capital expenditure. If Australian companies are to be competitive in international raw materials markets and capable of attracting sufficient amounts of international risk capital, they must not be subject to respressive tax legislation which places them under an impossible handicap.

The new measures in this Budget relating to the deductibility of expenditure on petroleum exploration and development will end the previously existing situation in which the petroleum industry was actually in a worse position from a taxation point of view than general mining. These measures will in fact place the petroleum industry in a more favourable position- a position which it ought to occupy in view of Australia’s urgent need to revitalise the search for petroleum. These provisions should be of considerable assistance in getting the North West Shelf project and new petroleum exploration under way.

Further evidence of the Government’s determination to revitalise the petroleum exploration industry can be found in the decision to remove the $2 a barrel excise on new oil. The Government considers it essential that every encouragement be given to the exploration companies. It therefore believes that the immediate removal of the $2 a barrel excise duty on new oil is completely justified. By 1985, if no additional discoveries of indigenous crude oil are made, the volume of petroleum that will have to be imported is estimated to be 200 million barrels at a cost of at least $2,000m, representing about 62 per cent of our petroleum requirements compared with 3 1 per cent in 1975. Thus, without additional oil discoveries, we will become increasingly dependent upon overseas suppliers and will cease to enjoy the degree of selfsufficiency that we now have.

As also mentioned in the Budget Speech, the Government intends to remove the coal export levy, in this case over a period of 3 years. The Government has always regarded the coal export levy as an inappropriate form of taxation. Marginal fields pay the same rate of duty as economically more profitable fields and, in some cases pay even higher duty. The imposition of the coal export levy has had undesirable effects not only on existing producers, but more unfortunately it has acted as a deterrent to potential developments. Planned new coal projects which would be affected by the levy could involve the employment of up to 4 500 men, peaking to 10 000 during the 5 year construction period, as well as the new capital expenditure of up to $2,000m over the 5 year period and an increase in our export earnings of up to $ 1,000m per annum.

For the mining industry as a whole, the most significant of the new measures are those relating to the rapid write-off of capital expenditure. As the law stood before the Budget, a mining company was permitted to write off only 4 per cent of its capital expenditure each year on a reducing basis- a situation which resulted in only half of the initial capital outlay of a project being deductible in the first 15 years of the project’s life. Under the new provisions announced in the Budget, companies are permitted to write off 20 per cent of their capital expenditure each year on a reducing basis. This means they will be able to write off an aggregate of about 80 per cent of the capital outlay in the first 7 years of a project’s life.

In addition, the investment allowance for plant and equipment continues to operate so that a mining company investing in 1976-77, for example, would be able to claim as a tax deduction, in a typical case, an additional 20 per cent to 25 per cent of the total mine investment in that year. The investment allowance is, of course, designed to assist all industries, not just the mining industry.

All of this adds up to a substantial measure of assistance in meeting the cash-flow problems of new mining ventures. In addition to the rapid write-off there will be cash-flow benefits from the decision to permit, at the taxpayers’ option, capital expenditure on transport facilities to be written off over 10 years on a straight line basis as an alternative to the existing period of 20 years. A 10-year period of write-off operated prior to 1974. In addition, the definition of allowable capital expenditure for which deductions may be claimed has been broadened to include port development expenditure. This had never applied previously. In order to develop and to prosper as it should the mining industry needs a reasonably secure tax regime on which it can rely in the medium to long term, as it has been able to do for the last 50 years. The purpose of tax incentives is to assist in the marshalling of capital so that companies can undertake effective discovery and development of Australia’s mineral and petroleum resources. The Government considers that the tax regime which operates in the mining industry must provide an appropriate set of ground rules for the long term. The income tax provisions set out in the Budget will go a long way towards meeting that need.

In short, the Government, through the various taxation measures introduced in this Budget, has taken a major step towards getting mining and exploration industries moving once more. No doubt many people in various sections of industry and in the community would like to see more being done for them in this Budget. But I repeat what I said at the beginning of my speech: The most important task of the Government is to get inflation under control. The most valuable thing this Government can do for the rnining industry, farmers, manufacturers, wage earners, pensioners, small businessmen or anyone else is to bring inflation under control. That is what the whole economic question is about This Budget points the nation towards the answer to that question.

Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP

-The Deputy Prime Minister (Mr Anthony) has been at pains to justify the strategy of this Budget, which is based on the premise that only through a reduction in inflation can the economy recover. Such a strategy is not uncommon for LiberalNational Country Party governments which rely for success on an increase in unemployment and a subsequent increase in hardship for hundreds of thousands of Australian families. To say, as the Prime Minister (Mr Malcolm Fraser) said on 26 August, that the Budget combined economic responsibility and social reform is to distort the meaning of responsibility and reform. To continue to say, as the Prime Minister did, that no aspect of the Budget demonstrates the Government’s concern for people more than the attack on inflation is to delude the supporters of the Government and the Australian people. If the Government was concerned for people it would not have introduced a Budget that weighs so heavily against employment and against the disadvantaged and affects so adversely the wellbeing of thousands of Australians.

This Budget not only intends to use unemployment to head off inflation but also seeks to use unemployment to reduce living standards through a tax on wage indexation and calls for a reduction in real wages. In the same vein, the Budget seeks to reduce the amount of disposable income available to workers in this country through increased Medibank charges and through its restructuring of the tax scales in order to pander further to the wealthier spectrum of our corporate sector- the mining industry, which the Deputy Prime Minister mentioned, and those Pitt Street farmers, Collins Street farmers and Treasury bench farmers who have gained so much from this Government’s concern for the people.

The economic madness of concentrating solely on inflation has been recognised by economic commentators overseas and by others throughout this country. Yet honourable members opposite support this strategy while the country suffers from an inability to express concern. The Prime Minister and the Treasurer (Mr Lynch) exhort the nation to spend, yet in May and again last month the Government ignored two of the three components of aggregate demand so necessary to stimulate the economy. In the Budget introduced 12 months ago by the honourable member for Oxley (Mr Hayden) the Labor Government recognised the need to stimulate the private sector as well as to encourage consumer confidence through maintenance of the public sector involvement. The FraserLynch strategy ignores these 2 parallel components of demand and lavishes aid and affection on the one sector of aggregate demand outside their immediate control.

The 1975 Budget recognised the need to maintain government spending to provide the Australian community with the basic amenities of a civilised and industrialised society- adequate health and educational facilities, sewerage and housing opportunities. It also recognised the national government’s responsibilities on behalf of the Australian people to support the disadvantaged within our society, the aged, infirm, the women, Aborigines, the poor and the dispossessed. This Budget ignores these responsibilities and hides behind the Prime Minister’s rhetoric of ‘hard times and no soft options’ while presiding over and orchestrating the hardest times for those least able to fight back.

Despite the Government’s attempt to hide the fact through the abolition of seasonally adjusted figures, unemployment now stands at 5.2 per cent of the work force, or 327 000. As a direct result of the Budget this figure will almost certainly rise to over 400 000 when this year’s school leavers, many of whom have stayed at school only because of lack of job opportunities, join the work force in the December-February period. More daunting, however, than the general extent of unemployment is the concentration of unemployment amongst, and lack of training available to, young Australians. While the under-20-year-old age group comprises only 12 per cent of the labour force, more than 40 per cent of the total number of unemployed are in this age group. This figure is more than 4 times the rate among those aged 20 years or over.

In the non-metropolitan area of New South Wales, for example, the ratio of registered unemployed to job vacancies is over 600 to one. Further, 25 per cent of these under-20-year-old unemployed youths have been unemployed for between 13 weeks and 26 weeks, while another 20 per cent have been unemployed for more than 6 months. The limited opportunities for learning and employment available to the job-seeking youth has a two-fold effect. It has an effect, firstly on their outlook and aspirations for the future and, secondly, on the future development and productivity of the economy. The fall-off in apprenticeship indentures is another alarming aspect of the unemployment of Australia’s youth. From the peak of 42 000 in 1973-74 the intake this year is some 10 000 less; fully 9 per cent less than last year and 25 per cent less than the peak 3 years ago.

In many trades there are up to 100 young people seeking apprenticeships for every vacancy registered with the Commonwealth Employment Service. In this regard the Commonwealth Public Service staff ceilings have had a deleterious effect, with the number of apprentices dropping by 18 per cent on last year’s figure which represents a decrease of the same order from the previous peak in 1973-74. In the face of this the Government had decided to slash unemployment benefits by $33m, which obviously will involve harder work tests. The younger unemployed, the under- 1 8-years-of-age group, to whom I was referring, are not being provided with any increased benefits at all. If Australia is to have a viable economic future we must not allow the youth of today who represent tomorrow’s craftsmen and managers to be thrown on to the industrial scrapheap. If Australia is to maintain its secondary and tertiary industries we must begin now to provide the training and experience so vital to these industries. The structural imperfections of Australian industry can be ovecome with planning and foresight. But without a trained and self-reliant work force Australia will fall quickly behind in industrial productivity.

The parlous state of apprenticeships and job training is perhaps no better illustrated than in the building and construction industry. This industry employs directly some 385 000 people or 8 to 10 per cent of the total Australian work force and in support or related industries perhaps half as many again. With regard to apprenticeships, the most recent figures available indicate that in New South Wales alone- I accept that the extent of the crisis in this industry varies from State to State with New South Wales being accepted by all, including the Minister for Environment, Housing and Community Development (Mr Newman), as the worst affected- over 1650 apprentices from this industry are now on the dole. That comes on top of a 42 per cent decrease in the number of indentures granted last financial year. In a joint submission to the Government earlier this year industry spokesmen said:

The shortage of skilled tradesmen will hamper a recovery of the industry even after an economic recovery and/or change of policy recognises the need to inject investment into the building industry on a national basis.

The Government has so far failed to identify that elusive injection of investment.

Moving on to the building and construction industry as a whole, it should be recognised that it represents one of the most diversified employment areas within the economy. Apart from those directly employed on site- carpenters, joiners, labourers and so on- many consultants are utilised, including architects, civil, structural, mechanical, electrical and hydraulic engineers, quantity surveyors, town planners, management advisers and the like, acoustic and landscape specialists and surveyors. Also involved are those who service the industry, suppliers, manufacturers, valuation experts and legal advisers. In January of this year it was estimated that in the professional areas alone over 40 per cent of the architects, 30 per cent of the quantity surveyors and 15 per cent of the consultant engineers would be retrenched. Those figures are indicative of other professional and semi-professional areas. I again refer to the joint submission that was made to the Government earlier this year. It reads:

The problems of the industry must receive the immediate attention of government, which must have measures which will at least maintain a level of activity to enable the survival of the industry in a viable form. This cannot be achieved by dependence on the revival of the private sector, but must rely on public sector work to fill the gap at a greater level of activity than is at present taking place to prevent disastrous unemployment, the failure of companies and the dispersal of skilled workers.

I am not talking on behalf of just the Building Workers Industrial Union or the Builders Labourers Federation. I am also talking on behalf of the consortium of building industries representing the Master Builders Association, the Housing Industry Association, the surveyors institute, the architects and the like. Yet no heed has been shown to that advocacy. Again I remind honourable members that this plea was directed to the Government in January of this year after the cancellation or deferment of a large number of contracts and projects previously entered into. Well the building industry may ask how the mining sector, which is largely foreign owned and which continues to accumulate and repatriate large profits, receives such generous government assistance while the Australian owned and faltering building industry does not receive any consideration. Perhaps the

Government plans to abandon the building industry. It has already abandoned the shipbuilding industry. Why not abandon the building industry as well?

Turning to the most recent figures on building approvals which were released only last week, we find that while the industry was almost holding its own with the previous quarter the Government ‘s contribution was almost negligible. That is hardly an indicator of confidence in the future. The Department of Environment, Housing and Community Development has itself recognised that it is unlikely that the rise in private commencements in the June quarter will be maintained on a national level. Let me emphasise the deleterious state of the building industry for the benefit of those honourable members opposite who seem to have some doubts. I have just received some figures from the Metropolitan Water Sewerage and Drainage Board in Sydney. I am talking especially about the situation in New South Wales. The Board has advised that the value of buildings completed within its area up to June 1976 was only $598.7m. I invite honourable members to compare that figure with the all time high that was reached in 1974-75 of $876m. There has been a massive fall off of over $277m.

Faced with a similar situation in 1974 the Labor Government, rather than let the industry and the workers employed in it go to the wall, introduced the Banks (Housing Loans) Bill, which sought to advance $150m in additional housing funds. That led to a considerable revitalisation of the building industry throughout the country. Of course, in addition to that, the Australian Labor Government also successfully encouraged the Reserve Bank to bring about a reduction from 60/40 to 50/50 in the proportion of assets that savings banks are required to hold in prescribed forms of investment. By that process several hundred million dollars were released for housing loans which otherwise would not have been available. In addition, of course, there were great increases in the allocations to the States for public housing programs, aged persons homes, defence service homes and the Australian Housing Corporation. But this Government, in the face of all the overtures that have been made and in the face of all the devastating statistics showing the decline of the building industry and the deteriorating employment opportunities for established tradesmen and up-and-coming young tradesmen, has been completely ineffective and insensitive.

A further matter to be taken into consideration is the report of the Indicative Planning Council for the housing industry, which was initiated by the Labor Government. That report, which was tabled 2 weeks ago, indicates that the present capacity and expectation of the industry are well below what it was some years ago and is well short of the desirable and- I think that this word was in fact used- essential level. The figures are in the report of the Indicative Planning Council for the Housing Industry for 1976-77 to 1978-79 for all to see.

Mr Stewart:

– You established it, did you not?

Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP

-I established it and I am proud that I did. As the then Opposition cooperated with me in its establishment, I sincerely hope that some attention will be given to its report and to its projections. That report gives the desirable dwelling completion level for 1976-77 as 148 700. It also points out that a recommended goal is 136 000. The forecast actual level is 131 000. The report contains a mass of figures. The New South Wales figures, of course, are quite startling. The desirable level in New South Wales in terms of dwelling completions for the year 1976-77 is 46 800. The forecast actual level in terms of this Government’s ineptitude, ineffectiveness and lack of concern about the building industry is 32 000-not 46 800. One can obtain from the report the total housing scene and the total construction scene.

I suppose that the major casualty in the Budget that is now being debated is the housing and urban affairs area. One can summarise the situation in a few lines. Growth centre expenditure has been reduced from $60m to $19m. Does this Government have any concern about where the young people of this country are going to live in the future? Does it have any concern about where the young people of this country are going to work in the future? The expenditure on area improvement programs has been cut from $17.5m to $0.5m. The expenditure on land commissions is down from $48m to $15m. The expenditure on the national sewerage program has been cut from $ 1 13m to $50m. Local government assistance has dropped from $2 74m to $195m, and capital works expenditure has been slashed by $127m. We have heard the Deputy Prime Minister with his obsession about inflation. It is the contention of the Opposition that there should be an obsession about the wellbeing, the progress and the advancement of Australia. The doctrinaire policies espoused by the Deputy Prime Minister are causing calamity and crisis that can only increase and which are already reaching proportions which will cause very great suffering among the Australian people.

Mr ACTING SPEAKER:

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

Mr SAINSBURY:
Monaro · Eden

-In common with so many other speakers on the Government side of the House, I am very pleased to speak in support of the 1976-77 Budget. At the same time I would add, for obvious reasons when one sees the amendment, that I am bound to speak against the amendment. It must surely be one of the most frivolous and tongueincheek amendments to be put to this House for some time. It is curious that the Opposition should speak so virulently against the Budget when of course it realises what a good Budget it really is. In fact, it seems to me from the quality of Opposition speeches and the content of them that the Opposition is eating its heart out at the moment. For a party which is supposed to represent the working people of Australia- an anachronistic description of the Australian Labor Party, as most Australians would now agree- the degree of humane social reform instigated by this Budget by the supposed capitalists and followers of big business pre-empts so much of the sort of reform that many Australians were hoping for from the previous Government. The Budget also shows that we now have a government in this country that knows how to manage.

The options open to the Treasurer (Mr Lynch) in the framing of this Budget were in a sense very frightening. Should he do what some eminent economists had advocated, namely, budget for a zero deficit? Should he spend money on various programs to such an extent that the deficit would be of a similar order to the deficit eventually provided for in the Hayden Budget. Should he be reasonably tough on spending programs and through efficiency keep the deficit somewhat lower than last year but nevertheless at a very high level in traditional terms, thus creating other problems in respect of the financing of that deficit? The options were all tough. All the sweet options that had normally been available had been excluded because the Whitiam Government had already spent so much of our money, had already placed our nation in great debt.

Since the election of December 1975 many people in my electorate of Eden-Monaro have told me, and told me earnestly, that it is so important that the Government not lose its nerve at this juncture. Men and women who work in the retail industry, the rural industry, the construction industry, the tourist industry and the Public Service have said to me that it is very important for Australia to get back on its feet, for us to wrestle with inflation and bring it back to a level that is acceptable to the men and women of Australia. That awareness is probably a relatively new thing in our country. There has been over the years a great deal of apathy towards political events. Not so to such a great extent any longer. There is a very good awareness of politica events through a widespread cross-section of our community. My constituents in EdenMonaro have indicated strongly to me since the Budget that, the fine print and the minor reallocations of emphasis as between categories of expenditure apart, the 1976-77 Budget demonstrates clearly that the Government has not lost its nerve in its endeavour to put Australia back on its feet. Indeed, the Budget has been extremely well accepted right across our nation.

The Canberra Press Gallery, of course, looks for controversy, but it is very interesting to see that it has found very little to criticise in the Budget except, I must admit, the question of funding for Aborigines. The Leader of the Opposition (Mr E. G. Whitiam) castigated the Government for the apparent reduction in expenditure on Aboriginal affairs. Without expanding that question any further, I merely reiterate that such criticism is shallow if not dishonest. It was very clearly stated by the Minister for Aboriginal Affairs (Mr Viner) at the time of the Budget that further funds would be available but would be subject to the review of spending to be reported on shortly. The Prime Minister (Mr Malcolm Fraser) publicly reiterated this only last weekend at Wilcannia.

The overall absence of controversy in the Budget, however, demonstrates clearly to me that the Budget has followed closely the will of the people. This is a pleasant change from the Labor years. As I stated a few moments ago when I pointed out the difficulties of the options open to the Treasurer, the Budget is not without its departures from the ideal. It is impossible to fund all requests. But as I also said, Australians recognise good management. Australians realise that they can get from the Government only what they are prepared to pay for in tax. This is one of the very big reasons that the electorate voted so confidently for the Liberal and National Country Parties last election.

I referred earlier to the frivolous nature of the Opposition amendment. The 5 points of the amendment all bear a cursory glance but they all demonstrate how insincere the Opposition must be at this time. I shall mention only briefly one of the 5 points. The amendment states that the Budget pursues a policy of unemployment as a weapon to reduce real wages and salaries. How arrogant! How untruthful! It has been a piece of

Labor Party jargon for some years now that the Liberal Party plays with people ‘s jobs as if those people were pawns. That jargon has never been supportable, and it is absolutely untrue. The honourable member for Hindmarsh (Mr Clyde Cameron), when he was Minister for Labor early in the Labor administration- some time before he was sacked- kept harping about a statement made by the present Speaker when he was Treasurer that ‘we have achieved what we set out to achieve’. That brief quotation taken out of context has been used to beat the drum at Labor rallies for a long time. It has been demoted to the level of the jargon of the Labor Party, and it has been quoted constantly out of context.

The real test of the attitude of those on the Government side of the House towards unemployment is our record. The people of Australia know our record. They know that unemployment reached 3 per cent of the work force during only one month during the 23 years of government by the Liberal and Country Parties when previously in power and that was almost 15 years ago. Unemployment in those 23 years was as low as 0.77 per cent of the Australian work force, and for year after year it was at the level of 1 to 2 per cent. In fact, 2 per cent unemployment was always considered to be high by most Australians in that period. The Labor Government took very little time through its mismanagement and unsound policies to promote the level of unemployment to 5 per cent. The honourable member for Lalor (Dr J. F. Cairns) when Treasurer stated on 9 September 1974:

Action by the Government to slow inflation will produce unemployment and that is a fact however unpalatable that must be faced by the Government and by the people.

Unemployment at its present level is a terrible and frightening fact. As distinct from the honourable member for Hindmarsh, who on several occasions is recorded as saying that his Government could do nothing about unemployment, the Government now is grappling with the problem, and through sound management policies shown in this Budget we are solving it. I do not propose to comment further on the Opposition amendment. The other 4 points are just as frivolous as the allegation regarding the Government’s attitude to unemployment.

One of the cruel inheritances of the present Government from the previous Government was record inflation. It is a difficult but inescapable paradox at present that at a time when unemployment is high and therefore confidence is required in the business sector so that jobs can again be created, inflation will dash any artifically stimulated recovery. The Deputy

Prime Minister (Mr Anthony) has referred to this already tonight. The Opposition, especially through its spokesman on the economy, has repeatedly alleged that the Government should have run a very much higher deficit. I imagine that that spokesman would be contemplating his higher deficit being funded by the printing of money. I remind the brains of the Opposition that printing money at this stage of our recovery would be patently stupid economics. Of course, it would be a very simple solution for the Treasurer to provide a stimulus to the economy by that medium, but the recovery created and the jobs provided would be very short lived indeed. The printing of money waters down the hard earned incomes of Australians, and in the present context would have no other lasting effect than an increase in the rate of inflation. The detrimental flow-on effects of inflation would also be increased.

I speak of interest rates, which must find their level at a high point in a time of high inflation. I speak of the capricious and damaging effects of inflation on people on fixed incomes, on people with savings in liquid form, on all people involved in industries where the selling price is controlled by overseas markets. I speak of confidence in the investing and productive sectors. We must remember that without confidence in those sectors the cycle of job creation cannot produce meaningful results. It sounds almost trite these days to repeat that inflation is the number one public enemy. Any person with one jot of experience as a practical or theoretical economist must allow that fact. We know it is an unfortunate fact, but it is a fact. How easy it would have been for the Treasurer to lose his nerve and bow to the thoughtless opinions of some members of the Opposition. They want to see policies that create greater inflation, and without spending time in this speech to prove the correlation, that would cause a needless increase in unemployment.

At the same time that the Treasurer was acting against inflation as a responsible Treasurer- the first responsible Treasurer of the last four Treasurers- he was still able to introduce revolutionary social measures. They prove the humanity of this Government and its strong relationship with the working people of Australia. Most of the measures that benefit the average Australian have been touched upon in other speeches. I should like to reiterate praise for two or three measures which are of particular interest to my electorate of Eden-Monaro. The firm proposal to index pensions is a demonstration of sincerity. It is of course the fulfilment of the Government’s election promise. Further, the additional reform of removing the assets portion of the means test for pensioners will be of great benefit to many people in my electorate. A substantial number of people happen to own property from which flows no income, especially at the present time of rural recession, and a high proportion of those people will now be able to obtain some income from the taxpayer and therefore live their lives with some degree of dignity. Since the Budget was brought down, I have been able to write to several constituents who live in retirement areas on the south coast of New South Wales and who have had problems eking out a meagre income in order to pay their bills. They will now be able to obtain a pension.

I also mention the income equalisation deposits which have been made available for primary producers. I should say at this juncture that I am hopeful that the system which has been introduced, provided any problems which may arise can be ironed out, can be extended further as economic conditions allow to other forms of industry where incomes normally fluctuate. For instance, the construction industry is one industry of which I have been a part for quite some years. The honourable member for Hughes (Mr Les Johnson) has cried crocodile tears for the construction industry. What would he know about the construction industry? It has always been noticeable that publicly listed construction companies, which have to show their accounts to the public, usually have wildly fluctuating income, and it is not difficult to show why that occurs. I want the principle of income equalisation deposits extended to that industry in due course. Income equalisation deposits will assist primary producers at this stage to more sensibly plan their expenditure. It has been patently obvious over the years that in times of high income in the rural sector, albeit short lived, producers are often forced to spend money inefficiently on tax deductible improvements to ameliorate the sudden tax and provisional tax problems.

I refer also to the reforms that have been introduced in this Budget in relation to death duties. Death duties are a great burden to the families of people in all walks of life and they have a particularly vicious effect in the rural sector. We in New South Wales realise, of course, that by far the greatest proportion of death duties is collected by the State Government, and we expect the Premier of New South Wales in his forthcoming Budget to honour his recent election promise to eliminate death duties between surviving spouses. For its part, this Government has made a solid move towards easing the death duty burden. In broader terms, it can be said accurately that the Government is now paying death duties on the Whitiam estate. At the time of the death of the Whitiam Government we were left with massive death duties to pay and we found that the assets which were available to pay those death duties had been frittered away. Despite the fact that we are not related in any form to the Whitiam Government, we are nevertheless caught with the problem of paying those death duties.

The people of Australia realise the tremendous difficulty that faced the Treasurer in preparing this Budget. The Treasurer has walked his tightrope with great ability. The tide of irresponsibility of the previous socialist Government has been turned back. The old myth that a socialist government is more humane and oriented towards the needs of people has been exploded. I am constantly reminded of the old quotation that if you are not a socialist before you are thirty you have no heart, and if you are a socialist after you are thirty you have no brains. The first part of that quotation has been proved completely wrong. The previous Government showed that any flirting with socialism is fraught with danger, whether one is a businessman, a wage earner, a pensioner or a person disadvantaged in any way at all. No wonder the average dinky-di Aussie sees this Budget as one which was framed in extremely difficult circumstances but framed for the good of our people. I wholeheartedly support the Budget and I treat the amendment in the same way in which I am sure it was framed.

Mr HAYDEN:
Oxley

-The Treasurer (Mr Lynch) has said that this Budget will aid recovery and rebuild confidence. It will do neither. The whole thrust of the Budget strategy is in the opposite direction. It is consciously designed to prolong the recession. A key tactic of this Budget is to reduce disposable income and contract real income. There can be no restoration of consumer confidence in the face of such a vigorous 2 -way assault on pay packets. If there is no improvement in consumer demand there will be no recovery. The Treasurer concedes that in his Budget Speech. Yet he proceeds to ensure that consumers’ spending power, their capacity to demand more goods and services, is curtailed by his 2 -way assault on pay packets.

This Budget is a high unemployment Budget. By next January unemployment will be at a record high figure for the post-war period. The Government has sought to veil the harsh reality of mounting unemployment, climbing to a postwar record level in January-February, by concealing seasonally adjusted figures. But no one will be convinced by that clumsy tactic. By January-February unemployment will probably be more than 100 000 above the level at the commencement of the fiscal year. By then unemployment will be above 6 per cent of the work force.

The keystone of the promised recovery is a strengthening investment trend in stock accumulation. This is a risky gamble based on assumptions about past business behaviour in quite different circumstances. It ignores the debt servicing problems of business which will be attended to first if cash flow increases, before any sustained and substantial stock accumulation is undertaken. It does not recognise the fact that stock decumulation has been planned and business has learnt to live with lower inventory levels and conceivably, even when it rebuilds, will do so cautiously and, at least for some time to come, at lower levels than in the past. Most importantly, it ignores the fact that if there is not a substantial improvement in consumer demand business will cease building up stocks that are not moving out with sales.

But the Budget is designed to dampen, not to stimulate, consumer activity. The keystone of the Budget therefore is not supported by the Budget thrust. The keystone will collapse. The more one analyses the Budget strategy, the more one critically scrutinises the Budget documents, especially Statement No. 2 of the Budget Papers, the more it becomes apparent that in fact there is not meant to be any recovery this year. Gentle talk of recovery, of stock investment lifting activity, is then sugar coating for a bitter economic pill. To talk of aiding recovery and rebuilding confidence with this Budget is to abuse the credibility and trust of the general public and insult the intelligence of anyone with a reasonable grasp of economics.

This is a severe Budget. Of course the Treasurer is correct when he says that recovery must be gradual. A too rapidly induced recovery will run into supply constraints and quickly lead to a fresh and damaging outbreak of inflation. But that does not justify the severity of the measures in this Budget. The Treasurer has crunched too hard.

Economic stagnation with attendant high levels of unemployment and slack activity in the private sector will be prolonged well beyond this fiscal year. Even in early 1 978- when the electorate will be stirring to the calls of a new electionthe economic listlessness of this Budget will still bear heavily on the community. The fact is that this Budget lacks integrity. It lacks integrity because its presentation is based on a fiddle with the figures. It lacks integrity because documentary details supplied with Budget papers disclose that it is aimed at contracting activity rather than fostering recovery, as claimed by the Treasurer. It lacks integrity because it is a budget of sacrifice and the burden of that sacrifice is largely thrust onto income earners while some big business interests are treated with the most brazenly generous preference.

Let me substantiate that proposition that this is a budget which lacks integrity. First there is the assertion that the books have been cooked. Late last year $2 16m was pre-paid to the States for public hospitals. That is, to reduce the bookkeeping presentation of government spending and the level of the deficit, that money, which will be spent’ this year by the States, was paid almost at the end of last financial year. Doctoring the books in this way may well satisfy the demands of the Treasurer’s ‘piggy bank’ approach to economics. It does not alter the fact that in economic management terms the $2 16m is being spent by the States this year, and therefore falsification of the books in this way merely degrades the Budget as a reliable guide on economic management.

Telecom Australia is to be forced to borrow $200m on the money market, a significant departure from past budgetary practice. Again, presentationally, the Budget looks leaner, but the economic impact of Telecom Australia does not diminish because of that. Higher interest rates which the instrumentality will have to pay will mean higher charges to the public. Higher charges mean further cost increases at a time of high inflation. The competition of Australian Telecom in the open money market will squeeze private business seeking money there and even conceivably put pressure on interest rates.

The Medibank tax will raise over $200m and, furthermore, the Government saves about the same amount in outlays because of those people expected to be forced into private insurance by the new arrangements. Again, in presentational terms the Government is more than $400m better off, but the public, as consumers, are worse off by that amount. The Government may feel more relieved with a thinner budget as a result of this, but it is confusing bookkeeping presentation with economic management. Consumer demand and therefore the level of economic demand is set back by this measure.

Curiously, for the first time in 4 years the Reserve Bank has been compelled to make a payment to the Government- it is a record payment of $80m. The Australian National Line has been prodden and driven into an early overseas borrowing of $35. 7m for ships. This is purely presentational. It shows up as increased revenue and it reduces the deficit but overseas borrowing has the same effect as releasing more bank notes through the Reserve Bank. It is nothing more than a cheap budget cosmetic which has marginally inflationary effects.

Then, of course, there is that highly questionable repayment of $245m from the Australian Wool Corporation. When I was Treasurer last year, Treasury made it clear that it had no confidence in precise and detailed projections about future wool market activity. Yet here we have this astounding result! Most remarkable of all, in a Budget confessedly designed to worsen unemployment, there is a $33. 6m reduction in allocations for unemployment benefits. This is probably the most brazen case of falsification of the Budget bookkeeping presentation. If you sum those figures, you get a total of well over $ 1,200m.

In other circumstances falsification of the books in this way would be called white collar crime. On the part of this Government it is the crudest form of deceit, the cheapest display of misrepresentation. Worst of all, it degrades the credibility of the Budget as a statement of economic management. Never before has such massive deception been directed against the Australian public by a government.

This Budget lacks integrity because the detail in the documents denies the Treasurer’s bland assurances that it is a Budget for recovery. In Statement No. 2 attached to the Budget Speech, the Treasurer says:

If consumption fails to grow, there can be no recovery, simply because consumption is such a large part of total demand.

But consumption will not grow if consumer spending power is cut back or if economic conditions become more insecure and uncertain for income earners. Yet that is exactly the set of circumstances which the Budget is designed to bring about. The work force is projected to increase by 2 per cent in the course of this year. Employment is expected to increase by between one per cent and 2 per cent. That is somewhere about 1.5 per cent. That is, at best, unemployment in this country will be as bad at the termination of the fiscal year as it was at the start. In fact it will probably be worse.

But there is more sting in this story than that. The Treasurer says in Statement No. 2 that there will be little if any reduction in the rate of unemployment appearing during calendar year 1976. In fact it is worse than that and he knows it. Unemployment will climb to a post-war record level in January-February perhaps of some 100 000 above the figure at which the fiscal year commenced. It will reach at least 6 per cent of the work force and a high proportion of the unemployed will be the young. Already the unemployment rate for young people is more than four times the rate of those aged 20 and over. It will be worse because of this Budget. There will be more young people unemployed and they will be unemployed for a longer period than has been the case in the past. It will be a grim New Year for school leavers. A dramatic rise in unemployment is no way in which to increase consumer confidence and if consumption fails to grow, in the words of the Treasurer,’. . . there can be no recovery . . . ‘

This year the tax bite is a record- a tax hike of 25 per cent, an increase of $1, 755m to an all time record of nearly $8,800m! The more tax taken from people’s pay packets, the less they have to spend on other things on the consumption of goods and services. Income earners’ disposable income is being squeezed and as income earners are also the consumers whose behaviour is so important to recovery, this means their consumer spending power is being squeezed. Clearly, consumption is not going to improve under that pressure.

But the story does not stop there. There is a second front to the attack on incomes. The Government is pledged to dramatically and rapidly reducing real wages. Now I cannot fault the proposition that business activity, investment and job creation have been set back by too great a diversion of resources from profits- the source of much job-creating and activity-generating investment. But that is not to uphold the clumsy rush of the Government to bring about this reverse. It will be counter-productive.

The manner in which the campaign to reduce real wages is being mounted is industrially provocative and will bring a sharp defensive reaction from white and blue collar associations and unions. I do not accept the tired orthodoxy that the Government seeks to endorse with a vengeance in this Budget- that higher unemployment means lower wage claims. The rate of wage claims dipped in the last 12 to 18 months because the previous Government established a social compact with the unions and it worked. The present Government promised to honour and abide by that compact in its last election pledges. On election it determinedly set about destroying income indexation. Statement No. 2 makes it clear it wishes to press on further with that destruction.

Average earnings are projected as increasing by 12 per cent this year; that is in line with cost of living movements. This means that none of the benefit of increased productivity this yearexpected to be about 1.5 per cent to 2 per cent- is to flow to incomes. It also means that wage indexation settlements must fall well below cost of living movements so that the increase in indexed and non-indexed wage settlements averages 12 per cent. Those assumptions in themselves are provocative enough to the industrial representatives of white and blue collar workers. But if wages are to be reduced to their conventional share of resources it means a reduction of about $ 1 1 a week in average earnings.

Now if the Government persists with the objective of achieving that rapidly, with as much clumsiness as it has displayed so far on income matters and at the same time as it seeks to reduce spending power in pay packets by increasing taxes and charges, it will create an intolerable set of industrial conditions. It will play into the hands of the less tractable, the more obdurate in the industrial movement. It will provoke a fresh outbreak of income demands and aggravate the problems of inflation control and general economic management. The sort of stability and restraint necessary to a recovery will be missing.

But let me take another tack. If there is to be a gradual gathering of the momentum of economic recovery then the bar chart at page 14 of Statement No. 2 needs some explanation. Statement No. 2 projects non-farm gross domestic product- that is production- growing by 4 per cent this year. But the bar chart shows that, on an annual basis, production grew by 6 per cent for the second half of last financial year. Clearly the projected sharp fall back in growth in production for the year is voluble evidence of the contractionary nature of the budget.

Let us consider another fact. The Budget Papers indicate money supply (M3) is to grow by 10 per cent to 12 per cent for the year. But increased production plus costs grow in total by a projected 1 5 per cent. That means money supply falls short of the needs of the economy by up to 5 per cent. That represents a squeeze too. Let me give evidence to bolster my point that there will be little impact on inflation in the course of the year in spite of the very great cost of lost production, higher unemployment and difficult business conditions.

Last year the implicit deflator for the gross domestic product was 14 per cent. It was associated with inflation of 12 per cent for the year as measured by the consumer price index. This year, by using data in Statement No. 2 it is possible to calculate the implicit deflator for gross domestic product as being approximately 13.5 per cent to 14 per cent. Clearly the relationship between this year’s implicit deflator for the gross domestic product and inflation as measured by the consumer price index is not going to be all that different from last year’s experience. Government actions in boosting the consumer price index in December by 3 per cent or more, solely as a result of the Medibank charges, the provocativeness of the Government on the wages front, and the devaluation of our currency that cannot be deferred much beyond the early New Year, even with large overseas borrowings, are going to unleash fresh inflationary pressures.

But the most objectionable aspect of the Budget is that while a high penalty of social and financial suffering is to be imposed on income earners, preferred treatment is to be meted out to some lucky big businesses. At a time when unemployment is expected to climb dramatically unemployment benefits are to be cut by nearly $34m; Aboriginal welfare is to be cut by $33m; migrant education by $ 10m; urban and environmental improvement programs by $ 142m; while wealthy mining corporations are given rich bounty. The packet of goodies for the mineral industry- concessions of various forms- will cost taxpayers about $ 100m in a full year.

The facts are that this is a tough Budget. It is aimed at prolonging the recession, increasing unemployment and cutting back business activity. It is the wrong medicine for the economy. It is too severe. The Government must stand ready to introduce a package of measures- measures to stimulate selected sectors of the economy in the early New Year. Work creating programs like the Regional Employment Development scheme should be reinvoked. The dgnity and confidence of income earners added to the mounting level of unemployment as a result of this Budget is not enhanced by being cast on to the dole. They want to contribute meaningfully to society. An extra $10Om to local government- their total allocations were cut by nearly $80m this year- and perhaps four or five times that amount to State governments, distributed according to the degree of weakness in economic activity in various sectors and by regions, would have a marked beneficial impact on economic activity. It would help stave off the bout of severe and prolonged economic stagnation which this Budget, whether the Treasurer realises it or not, is designed to bring about. Money supply could be increased by $800m in this year and still fall up to 3 per cent below the growth in sum of cost movements and real economic growth- that is, without creating inflationary difficulties.

I would be opposed to reckless increases in the public sector but what I propose is responsible. It follows the line which has been laid down by the member for Adelaide (Mr Hurford) who was speaking on behalf of the Opposition. What the Government proposes represents a very great cost in terms of lost production, high unemployment and private business difficulties, against, at best, the small impact on inflation. (Extension of time granted.) Before I conclude my observations there is one feature of the Budget that should be recorded and that is its impact on next year’s Budget. There are unavoidable net commitments for next year’s Budget of the order of between $850m to $900m for undertakings entered into in this Budget for investment allowance, stock valuation adjustment, concessions to the mining industry, concessions for private companies and estate duty adjustments alone! Next year, if it is the Government’s intention not to increase its expenditure above 30 per cent of gross domestic product- and it is its avowed objective in fact to reduce that proportion to something like 25 per cent- then the most it will have available to meet net additional commitments is $650m to $700m, that is less than its commitments for the items I mentioned. Clearly the Government has left itself no room for movement, no opportunity for flexibility in next year’s Budget. Obviously the best that most existing programs can expect next year is no growth and many can expect to be pared back futher. More significantly the commitments entered into in this year’s Budget which have to be paid for next year have jammed the Government into a tight corner if it genuinely wishes to avoid increasing Government expenditure as a proportion of gross domestic product and if it wishes to hasten recovery from the stagnation this year’s Budget will impose on the economy. However, this debate is about this year’s Budget and this year’s Budget clearly deserves to be rejected by the Australian people. I support the amendment.

Dr EDWARDS:
Berowra

-It would be pointless of me to pursue all the unwarranted and misleading statements by the honourable member for Oxley (Mr Hayden), the previous Treasurer. At this stage I shall refer to only 2 points. I shall come back to another, the aggregate of personal taxation, later. The first point to which I would refer is the basis for increased consumption expenditure. We all agree- the Government, the Opposition and the unionsthat increased real consumption expenditure is an important factor for economic recovery. But the Government does not leave it there, as the Budget strategy presented by the honourable member for Oxley last year did, in relying almost wholly on an increase in consumption expenditure. Accordingly we implemented the investment allowance and other measures to stimulate investment expenditure so that that would complement the increase in consumption expenditure.

Thus, we do not deny that an important component of economic recovery is increased real consumption expenditure. In this respect it is correct, as I shall argue again later, that it is an integral part of the Government’s policy to slow the growth of award wage increases. I believe that the average, thinking, responsible Australian accepts that. He recognises, as a predecessor as Treasurer of the honourable member for Oxley said, that the big pay rise of the employed man is what costs the unemployed man his job. I stressed this point this afternoon. The big pay rises by those in employment, by raising the cost of employing Australians to a point where the most expensive thing an employer can do is employ an Australian, lead to increased unemployment. People recognise that. So wage and salary increases have to be contained. I want to stress, however, that with the best efforts the Government can bring to bear in this respect the anticipation is that we will achieve no more than holding real earnings steady. I quote, as I did this afternoon, from page 26 of the Budget Papers where, referring to the projections of the Government, it is stated:

Real average earnings per employed person would remain approximately unchanged . . .

It is then added: . . . due to employment growth, aggregate real earnings would increase moderately.

That, together with the unlocking of accumulated savings by consumers, is the basis we look to for increased real consumption.

Mr Baume:

– He would not understand that.

Dr EDWARDS:

– Perhaps the honourable member for Oxley could not understand it but what also should be said is that the constant harping on unemployment by the honourable member for Oxley will not facilitate this process of the unlocking of accumulated savings by consumers. People should take confidence that this Budget is designed to cut back the high and stubborn rate of inflation and the associated high level of unemployment- that it is designed to reduce inflation and to restore full employment and a climate of expansion and prosperity in the country and in these circumstances proceed to increase their consumption expenditure as they would ordinarily do. The other point I wish to raise in relation to the honourable member for Oxley is his references to integrity.

Mr Baume:

– How would he know?

Dr EDWARDS:

– How would he know?’ asks my colleague. What more needs to be said than that such a charge is levelled by the previous Treasurer who projected a deficit of the order of $2,600m for 1975-76 and it ended up at $3,585m? Integrity? I rest my case there. The central purpose of this Budget is to combat the high rate of inflation and to restore full employment and economic activity, and that in itself is the greatest social benefit this Government can, and will, confer on the Australian people. But the Government is determined both to achieve these objectives and at the same time to press ahead with its program of social reform. This is a Budget of reform as well as a Budget for restoring the bruised and battered Australian economy. This aspect is perhaps best illustrated by what we have done in relation to family allowances. That is the first of 2 principal matters that I want to touch on tonight. In doing so I want to stress that there is a tendency for the Budget to be regarded as the once and for all, the be all and end all of economic policy, with Budget day the one day of the year for laying it all down. That is an inadequate and out of date view. The fact of the matter is that the Budget is one episode in the continuing process of economic policy making. That was never truer than in this case when the process began on 14 December last. In particular this Budget contains and embraces as integral to it in the fullest sense the measures announced in this House on 20 May last. There has been a continuous and predictable- I stress that; it is very important; that is in great contrast to the previous administration- process of economic and social policy making by this Government.

I want to focus on two of the major elements in this total Budget process. Both of them were announced on 20 May. They are the new system of family allowances and the implementing of tax indexation. Both of these measures have been operative from 1 July. That was possible because of the pre-announcement on 20 May and the passage of legislation last session. I want to give a few details of the Budget’s new system of family allowances because I know that many Australians listening to this broadcast perhaps even now are not fully aware of the details of the total shape of the system.

Mr Cadman:

– The Opposition clearly is not.

Dr EDWARDS:

– Members of the Opposition clearly are not so I shall endeavour to instruct them also. Of the greatest importance about the system is that it channels greatly increased assistance to where it is most needed. That is true of all the significant social reforms in this Budget. It gives the lie to the false and spurious claim by the Leader of the Opposition (Mr E. G. Whitlam) in his speech on the Budget when he said that with this Government: . . . those most in need will get least and the wealthy will get most.

That is utterly and demonstrably false. If the honourable member has any feeling for principlehe was in the chamber a moment ago- he will withdraw that allegation. The main features of the system are these: The former child endowment payments will be replaced by a new system of family allowances under which the family with one child will receive $3.50 a week from the Government. The amount was formerly 50c. The family with 2 children will receive $8.50 which was formerly $1.50. The family with 3 children will receive $14.50 a week; that was formerly $3.50. The family with 4 children will receive $20.50 a week and the family with 5 children will receive $27.50 a week. That amounts to $330 per 12-week period. An additional $7 a week is paid for each additional child. These payments are large. I hope the Australian public will recognise that. But, of course, the payments are made without means test in every case and the Government might have attracted great criticism had it rested there. But the other key aspect of the system is that at the same time the tax rebates for children have been abolished. The effect of that is that for the higher income groups the gains from the new family allowances offset by the loss of tax rebates and consequent higher tax payments- it is more or less a line ball position. But low income earners paying little or no tax and therefore not in a position to benefit from the tax rebates will receive a significant net increase in their incomes.

Mr Baume:

– They are better off.

Dr EDWARDS:

– As my colleague says, in this way poorer families including, as the Prime Minister (Mr Malcolm Fraser) stressed recently, Aboriginal families, receive a significant net addition to their incomes. Indeed, about 300 000 low income families and their 800 000 dependent children are benefiting in this way.

Mr Cadman:

– How many?

Dr EDWARDS:

– Some 300 000 low income families with some 800 000 dependent children. I suggest to this Parliament that the help thus given is more meaningful than any single social welfare measure introduced by the Labor Government notwithstanding its claim- its usual hollow claim- to have a monopoly of concern in this area. I stress that measure, first, because it highlights the concern of the Government in this its first Budget to push ahead with its social welfare program notwithstanding the difficult economic climate and, secondly, because it links up with the second major initiative I referred to, the indexing of personal taxation. This is both a major thrust in the direction of containing the burden of taxation on Australians, which is a fundamental objective of this Government, and also of our anti-inflation policy. Both of these measures- the indexing of taxes and the system of family allowances which gives special help to low income groups- are measures which, so to speak, confer authority on this Government to carry through its policy of containing the increase in wages and salaries. That increase in wages and salaries is the main current and prospective cause of inflation and thus the important thing is to contain such increases. As I stressed earlier, I believe that the majority of thinking responsible Australians recognise that. They can see that the big increases sought and obtained by persons in employment is the major factor which costs the unemployed their jobs. As I have said, we must therefore move in this direction in the interests of all Australians, the unemployed as well as those in employment.

What I would like to do in the time left to me in this debate is to try to convey to the Australian people just what this obscure phrase ‘the indexing of taxes’ means. Essentially it means that when a person’s money income goes up in line with inflation- if say, prices go up 10 per cent and a person’s wage or salary goes up 10 per cent, whereas previously, and especially under the last 3 years of Labor rule, tax would have gone up more like by 20 per cent or twice the increase in income- under this indexing process the tax goes up by only 10 per cent. So tax stays at the same proportion of a person’s income as applied before the increase. This is done by indexing, increasing the limits of the tax scale so that as a person’s income increases he does not move into a higher rate of marginal taxation. In addition, the general rebate has been indexed. It has been increased from $540 to $610. That is a tax saving of $70 straight away. The rebate for a spouse has been increased from $400 to $500. That is more than an indexing of this amount; it has been done in the interests of assisting single income families. The rebate for a spouse thus increased from $400 to $500 means an actual tax reduction of an additional $100. In those 2 measures alone there is a tax saving of $ 1 70.

What I would stress is that this indexing of the tax system will save Australians in 1976-77 something of the order of $ 1,000m in taxes which they would otherwise have had to pay. In that sense it has been done at that sort of cost- $ 1,000m- to the Government. That is what we meant during the election campaign by our undertaking to put a stop to the personal income tax rip off. That is what is meant by this technical phrase ‘the indexing of taxes’. And, more than that, the legislation applies not just to this year but for all years to come. Thus next fiscal year, 1977-78, the personal tax scale will under our legislation be automatically indexed and the rip off less because we will have inflation under control. I commend these massive, novel, farreaching initiatives to the Australian people. I add that we have managed to implement them without resort to those perennial sources of increased revenue such as extra tax on drinks, cigarettes and petrol.

Mr Baume:

– Like the honourable member for Oxley imposed.

Dr EDWARDS:

– Yes, such as those the honourable member for Oxley imposed in his Budget last year. We have managed to avoid those. It is true that the change to Medibank will be an off-set to these measures but only a short term one. By getting the massive escalation in the cost of Medibank under control and ensuring greater competition and choice in health insurance there will be less cost, less taxation, than there would otherwise have been. The health insurance charge has to be seen as a feeforservice, not a tax.

Therefore I would like in conclusion- I said I would come back to this question of the total of personal taxation- to explain a point about the Budget figuring which Opposition speakers have misrepresented. They look in the Budget papers and they see that the total of personal income taxes will, on the face of it, increase from $9,200m in 1 975-76 to $ 1 1 ,307m this year and it is being said: ‘Is that not just the same rip off as under the Whitlam Labor Government?’ To that I answer ‘No, it is not’. I seek leave at this point to incorporate in Hansard a table illustrating my point in this respect.

Mr DEPUTY SPEAKER (Mr Armitage:
CHIFLEY, NEW SOUTH WALES

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

The table read as follows-

Dr EDWARDS:

– I thank the House. What needs to be stressed and understood is that by virtue of introducing our greatly enlarged family allowances but at the same time abolishing the tax rebate for children we give a degree of help to low income families which is the best single measure of help we can give. But it does mean statistically that the lost tax rebates show up in the tax statistics as additional tax- fully $540malthough it really is a straight transfer to incomes of that and indeed a greater amount. That is, the tax shows up in the income statistics- what does not show up is that there is a compensating increase in income via the family allowances. So in speaking of the real effective increase in income tax this amount should be subtracted. Thus from the total shown in the papers and so frequently quoted by Opposition supportersnamely $11,307m-one gets a fairer picture by

subtracting this amount of $540m which then gives $ 10,767m. Also included in the tax statistics is the Medibank levy amounting to $250m. As I said, this is collected by the Commissioner for Taxation but it is really a fee-for-service and to get a fairer picture it too ought to be subtracted. We thus have that the total figure that is quoted less these 2 items of $540m and $250m which leaves a total of the order of $ 10,500m compared with $9,200m in 1975-76. That gives an increase of $ 1,298m which represents an increase of just 1 4 per cent on last year.

Mr Baume:

– That is due to indexing.

Dr EDWARDS:

-That is the indexing- 12 per cent increase in average weekly earnings and one to two percentage points for increased employment. If we applied the Hayden tax rates unchanged the total increase in tax this year would have been $2, 348m. We have kept the basic increase down to that 14 per cent by our $ 1,000m tax indexing operation and this has been done by a government accused of doing nothing for the ordinary wage earner and everything for big business. That gives the lie to the claims- these false claims- of the Opposition.

Mr DEPUTY SPEAKER:

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

Mr FRY:
Fraser

– We come to look to the annual Budget as the principal means by which the Government manages the national economy and generally gives effect to its overall economic strategy. In the Budget we should be able to read about the Government’s concern, or lack of it, for the long-term health of the individual sectors of the economy and we should find reflected the Government’s priorities in regard to the welfare of the different sectors or groups in the community. The Budget we have before us is undoubtedly a misguided Budget. It is dangerously obsessive in its economic strategy. I believe it is short-sighted in its harsh treatment of those sectors of the economy whose health is vital to economic strength in the long term. I believe also that the Budget is persimonious to the point of being vicious in its treatment of those people such as Aborigines and the unemployed, and particularly the young unemployed, whose interests the Government ought to feel obliged to protect and to defend.

The case against the Government in its overall economic strategy has been admirably put by my many colleagues. But let us look once again at the situation which faces us in the year ahead under the Lynch Budget. When we examine the main economic indicators in the Budget, we find that economic growth will not exceed 4 per cent in the non-farm sector, an appallingly low rate by comparison with what ought to be expected in a phase of recovery from recession and with what is expected to be achieved in other comparable countries. Turning to unemployment, we find that the unemployment rate may reach 6 per cent of the work force with the brunt of the burden falling most severely upon the poor, the young, the women and the rural sector. We find that average earnings will increase by no more than 12 per cent- of course, inflation will eat up at least that much of incomes- and that revenue from income taxes will rise by as much as 25 per cent.

Let me turn to the demand for money. The demand for money, taking into account both inflation and economic expansion, such as it may be, is expected to grow by 16 per cent, while the Treasurer (Mr Lynch) proposes to keep the growth in the supply of money to no more than 12 per cent. In short, there will be no appreciable decline in the present high levels of interest rates with their damaging consequences for home buyers and business investment which the Government claims is essential for economic recovery. So at the best, this looks like a stategy of stagnation. In fact, there is a very strong possibility that the outcome will be a good deal worse than stagnation. The reason is the Government’s dangerous obsession with a presumed relationship between inflation and unemployment and with the size of the Budget deficit.

We are told that the nation ‘s first priority must be the reduction of inflation, that the reduction of the deficit is a key element in bringing that about, and that prolonged high unemployment is the price we must pay. Yet we know that the real reason underlying the Government’s concern with the deficit is little more than its very questionable acceptance of the bankrupt ideologies of Rand and the monetarist economist, Friedman. We also know that economists, members of a profession notorious for their inability to reach consensus, are more than usually divided on the question whether more unemployment means less inflation. This Government is perfectly happy, it seems, to impose tremendous costs upon the economically weaker sections of the Australian community while it takes a punt on a very doubtful assumption of the relationship between unemployment and inflation. Indeed, responsible opinion in the Financial Review today states that to rely on unemployment to control inflation would require an everincreasing level of unemployment and not just a stationary level of unemployment.

Contrary to the Government’s view, it is equally reasonable to believe that the rate of inflation will be reduced no more than marginally, if at all, by the further increase in unemployment which is envisaged by the Treasurer. What will happen then? The Treasurer’s projection of economic growth for 1976-77 can be predicted only upon the assumption that there will be substantial stock building by business in the years ahead. Others say that even if we do have a build-up in stock, this will not reflect- any drop in the unemployment rate as it will take up only the existing slack in industry. Manufacturers will certainly stop adding to their stocks, so precipitating a return to the declining economic activity if demand for their products does not materialise. Yet there can be no incentive for consumers to reduce their propensity to save when they see the prospect of unemployment looming larger still. Nor will there be much hope of increased real consumption out of earnings which will not increase at all in real terms.

The Government has already abandoned its absurd belief in the possibility of an investmentled economic recovery. Now it seems intent upon denying Australians the prospect of a recovery led by consumer demand as well. We on this side of the House also believe in the importance of reducing inflation. Continued high inflation can have only progressively more severe consequences upon our international trading position and for the distribution of the fruits of economic activity away from those who can least afford it. We believe, therefore, that it is crucial that the Budget strategy adopted for 1976-77 should be one which does not so obviously reflect extreme ideologies or a willingness on the part of government to gamble on unproven hypothesis. It is quite plain that the Government could take more positive steps to bring about economic recovery. One has only to look at. that startling gap between the probable demand for money in the year ahead and the Government’s substantially lower target which reflects the severe restraints based upon public expenditure. I do not suggest that the scope for greater stimulation by the public sector is by any means large. But by even quite small additional spending in areas of greatest need in the economy it would have been possible to engender a significant strengtening in the confidence of Australians in the future.

I said earlier that the Budget is plainly shortsighted in its neglect of sectors of the economy whose capacities must be preserved. It is inevitable that a government so obsessed with reducing public expenditure will discover that cuts are most readily made in its capital spending programs. The result, however, is that the impact will be felt most severely in the construction industry which unfortunately is already in the throes of one of the worst recessions it has ever experienced. Nowhere is this more evident than in the Australian Capital Territory. The capacity of such an industry is hard-won and fragile. The longer the recession continues, the more likely it will be that the skilled work force built up will be dissipated and its ability to respond to increased demand when it does eventually appear will be reduced. Yet the Budget incorporates a 13 per cent decline in real terms in funding for roads; it reduces funds for sewerage by $63m; it reduces funds for land development by $2 9m, and so on.

Then again, it is vital that our rural industries, some of which are in quite desperate circumstances, should be given every chance to withstand the effects of inflation on the costs of inputs, and of reconstruction, where necessary, in an orderly fashion. There is only one measure in this Budget which could be regarded as a positive step towards improving the welfare of the farm sector; that is the introduction of the income equalisation deposits scheme. There is some justice, we must agree, in permitting those members of the community who have severely fluctuating incomes to average those incomes for taxation purposes. Yet, even with the benefit of the excellent advice of the Industries Assistance Commission, the Government has managed to produce yet another rip-off for the Pitt Street and Collins Street farmers. As my colleagues in another place have said, the rate of return upon an investor’s equity in these deposits, with the balance of the investment being deferred tax, may be nearly 3 times as much as the nominal 5 per cent rate on the deposits. But this is only for the rich- for those people with incomes in excess of $28,250 per annum. Other investors will receive lower returns.

One might ask who else has access to giltedged investments at such a rate of interest. Will the Government claim that it was beyond its wit to devise a more equitable scheme? Honourable members will have noted, incidentally, the Treasurer’s statement in his Budget Speech that non-farm business will enjoy not merely a deferral of tax under the new trading stock valuation provisions but will also have its taxes reduced. Farmers might justifiably feel that this Government’s priorities do not include them. Then, of course, there is the question who will have to suffer while the Government tries out its doubtful strategy. We know already that unemployment will rise. In addition, the unemployed will find it harder to get unemployment benefits, if we are to judge by the reduced amount of money which this parsimonious Budget appropriates for the item. Will the Minister give us a detailed account of the logic which underlies this oddity?

One reason which has been advanced as a possible explanation is that this year there will be more young people who receive lower benefits as a proportion of the total than there were in 1975-76. Moreover, it seems that these young people will not be permitted to receive benefits for at least 6 weeks after they leave school. How callous this Budget and this Government are, and how disturbingly myopic in their treatment of young people as they seek to enter the workforce for the first time. Is there anything in this Budget we might well ask which could lead them to believe that the Government actually cares enough to sustain them until job opportunities increase? Then of course there is the spectre of assistance to the Aboriginal peoples being reviewed by the accountants.

I turn briefly to the impact of the Budget upon my own electorate. I believe that in relation to the Australian Capital Territory the Government has been deliberately vindictive. It has been provocative and it has been discriminatory. In the Australian Capital Territory the employment problem which I have just been discussing is of course much exacerbated by the Government’s present policy of reducing the size of the Public Service. School leavers will find it particularly difficult to obtain employment in the administrative ranks. Last year the National Capital Development Commission spent $ 188m on capital works and services. This year it will spend only $ 195m- something like 9 per cent less than the 1975-76 vote in real terms, once we have allowed for inflation. In 1975-76 almost $25m was advanced to the Australian Capital Territory Housing Trust accounts to provide loans for government housing. This year the equivalent amount is only $12m. The impact of these measures upon the building and construction industry in the Australian Capital Territory must be severe, not just in the year to come but for some years beyond that. In that regard it is particularly disturbing that, whereas capital works in progress under the administration of the NCDC had some $258m yet to be spent on them from 1 July 1976, the equivalent figure at the beginning of next financial year can be no more than $2 16m.

Of course Canberra is not the only growth centre which is to undergo such convulsions at the behest of this Government. The crisis of confidence amongst businessmen in AlburyWodonga is a consequence of this Government’s vacillation as the future of that growth centre is already evident. Honourable members opposite are fond of paying lip service to the idea of decentralisation in Australia. The Leader of the National Country Party (Mr Anthony) has said:

We are committed to a policy to restrain urban growth and foster regional growth.

Does this Budget give any evidence of that policy?

Then there is the receipt side of the ledger for the Australian Capital Territory. Budget statement No. 4 tells us that whereas in 1975-76 receipts of the Department of the Capital Territory were almost $90m, this year those same items are to produce an extra $23m of revenue. This is to come out of the pockets of the workers. How is this to be done? It is to be done by raising rates, by nearly doubling public transport revenue, by increasing interest and principal repayments on government housing loans by 16 per cent and by increasing rents on government houses. Some people have to pay up to $20 more out of their pay packet each week to meet all these extra levies of the Budget. This first Budget of the Fraser Government has already given us ample evidence of what we in the Australian Capital Territory can expect during this Government’s term of office.

In summary, this is a risky Budget in terms of its high potential for failure in overall economic management. It is a parsimonious Budget because the potential query exists for there to be more economic stimulation flowing from more generous treatment of those in the community who most deserve assistance. It is a short sighted Budget in its selectively harsh treatment of the construction and rural industries, and of the growth centres- those first concrete initiatives ever taken in decentralisation policy in this country. I support the amendment moved by the Leader of the Opposition (Mr E. G. Whitiam).

Mr MACPHEE:
Minister for Productivity · Balaclava · LP

– I have great pleasure in supporting the Appropriation Bill (No. 1 ). As the Treasurer (Mr Lynch) said in his Budget Speech, the Budget strategy has 5 basic principles. These may be stated as being: making the reduction in the rate of inflation the essential aim of government policy for the time being; restraining government spending in order to allow the private sector to expand and create jobs in the medium term; restricting government taxation revenue in order to encourage further wage restraint and improve both business profitability and confidence; reducing the size of the deficit in order to moderate increases in the money supply; and continuing to implement selective social programs based on recommendations of the Henderson report on poverty and on a philosophy of assisting the most disadvantaged and assisting others to help themselves more effectively. The old saying that it is always easier to criticise than to construct is never more true than in relation to economic policy. Even if one discounts some criticism as being ideologically based or mere political debating, there will be many nuances of opinion as a result of genuinely different hypothesis and arguably valid assumptions. But it must be said about this Budget that the strategy has been very widely accepted as being most sound in the troubled economic times in which we live. Such criticism as there has been has generally been of a minor nature in relation to the overall strategy. Some commentators have had a few bob each way and others have revealed contradictions in their own analysis. On the whole, however, this Budget probably has received far greater acceptance and much less savage criticism than any other Budget that most of us could remember. It is founded on a strategy approved by the Organisation for Economic Cooperation and Development and which has been applied with beneficial results in comparable industrial economies.

When this Government came to office, the economy was really sick, far more sick than most people realised. From the time this Government came to office it avoided the temptation artificially to stimulate the economy in the short term as this would bring aggravated difficulties in the longer term. Instead, it set out energetically on the task of ensuring a sound recovery in the medium term.

This Budget is a consistant part of that strategy. It has a medium term orientation. It is a recovery Budget. The Leader of the Opposition (Mr E. G. Whitiam) says that this is a business Budget, not a people’s Budget. After 3 disastrous years he still does not recognise that the people’s welfare rests upon the welfare of businessespecially when 75 per cent of employment is created by the private sector. Statements made by the honourable member for Oxley (Mr Hayden) when he was Treasurer and presented last year’s Budget showed that he understood then the need to help business in order to help people, but his Leader still does not understand. Instead, he advocates still more government spending- no doubt to the chagrin of his shadow Treasurer, the honourable member of Adelaide (Mr Hurford), who has been careful to talk only of selective public spending.

While this Budget aims to stimulate business, it has not provided any bonanza to industry at the expense of private citizens. If the Leader of the Opposition believes otherwise, he has misunderstood the medium term nature of this Budget. If he has correctly understood, then his words of criticism represent cheap and shabby political word play. The fact is that cash flow benefits for business are at least a year away- in many cases longer than that. Moreover, many of the smaller firms and companies which took such a battering from the Whitlam Government will go out of business before the impact of this so-called business budget has produced the economic recovery to save them. It was not possible to devise -

Mr Innes:

– Read the Chamber of Manufactures document.

Mr MACPHEE:

– It agrees.

Mr Innes:

– It does not agree. I will let you read the one I have.

Mr MACPHEE:

-Regardless of the views of the honourable member for Melbourne (Mr Innes) or the Victorian Chamber of Manufactures, it is my considered opinion that it was not possible to devise a Budget strategy to save many small firms from the damage done to them in the last 3 years without jeopardising them and others in the medium term. I hope that in some of the labour intensive manufacturing industries there will be assistance in the short term by way of import quotas being granted to them as manufacturers to help balance their books until the Government’s White Paper on manufacturing industry is announced and implemented. If we are to a old embarrassment with the General Agreement on Tariffs and Trade, it may be necessary to transfer some existing quotas from importers and retailers to manufacturers so that they may remain in business in some product lines by assisting their business with income from imports. If that action is not taken, many small businesses will collapse and unemployment will rise still further. The retailers who may lose their existing quotas would not have been major importers of those particular commodities in the past and would be most unwise to try to cling to quotas which would put local manufacturers out of business and make the retailers themselves totally dependent upon imports with all the shipping and other problems which that involves. To compound that situation, many of those imports will come from Australian owned companies which have gone off-shore to manufacture with a cheaper work force. It is quite legitimate to decide for economic, foreign policy and trade reasons that that is a desirable trend, but to date, no such decision has been taken and the situation has been allowed to drift.

I have urged the idea of a transfer of quotas upon the responsible Ministers and hope it will soon be adopted. In saying that, I wish to stress that I am referring only to policies which may be taken in the short term to supplement the Budget strategy. In the long term we must eliminate the crisis orientation associated with our undue emphasis upon the annual Budget. The White Paper on manufacturing will, hopefully, achieve that. As that matter falls outside this Budget debate, I will reserve my comments for a tariff debate or some other appropriate opportunity.

The method of adjusting trading stock valuations does not apply to 197S-76 incomes and therefore will not grant taxation relief for companies in their tax payments for 1976-77. This provision will be of medium term benefit to manufacturers, wholesalers and retailers and it has been estimated that in some cases it will effectively reduce company tax from the present rate of 42.S per cent to a little over 30 per cent. It is arguable whether a reduction in the rate of company tax in this Budget would assist many companies in financial difficulties. I believe that the general good is better served by the introduction of the recommendations of the Mathews Committee of inquiry into inflation and taxationproposals which correspond with the indexation of personal income tax and which bear the imprimatur of the Australian Council of Trade Unions. One commentator has suggested that companies able to avail themselves of this concession will now have less reason to want inflation reduced. Apart from the fact that they have other reasons for wanting to reduce inflation, the fact that such companies have to wait until the next financial year to benefit from the concession will be incentive enough to work with the Government to help reduce inflation meanwhile. The problems of manufacturing, in particular, go far beyond accounting methods. While on the subject of the trading stock valuation adjustment, one hopes that the various accounting bodies will soon provide clear guidelines for the presentation of company accounts.

The mining industry, which also took a terrible beating from the Labor Government, also receives benefits of a medium term nature. These concessions are justified in that they will assist the growth of our economy for the benefit of all

Australians. At the same time, they are handsome incentives which should advance mining investment. Likewise, the concessions for petroleum exploration are justifiably generous and of medium term benefit. The mining concessions are substantially consistent with the recommendations of the Industries Assistance Commission. The justification for such measures lies in the fact that the effect will be a greatly increased cash flow for companies undertaking the development of our natural resourcesprojects for which vast sums of capital are required. Under Labor, capital costs rose to prohibitive levels. Now it will be possible for the huge North West Shelf project to be advanceda project which, like the Bass Strait oil project, will be of great benefit to Australians and will be a tribute to the initiative of the Broken Hm Pty Co. Ltd which recently bought a 2 1 per cent share.

Small business will benefit from this Budget both by the stock valuation adjustment after the end of this financial year and the extension of the retention allowance in this financial year. I am bound to say, however, that I would like to see the retention allowance so extended that it disappears altogether. Capital is by far Australia ‘s scarcest resource and the undistributed profits tax imposed upon private companies amounts to a penalty upon business which costs the nation dearly by inhibiting the assembly of precious capital. The liberalisation contained in this Budget is most welcome but private companies are still obliged to pay 40 per cent of their after-tax profits out as dividends which are then taxed as income to shareholders.

In keeping with its determination to help the disadvantaged, the Government has granted increased aid to handicapped children and pensioners. Pensioners will indeed, receive protection from inflation by full indexation of their pension entitlements. It has also removed the property means test for pensioners and increased pensions by $4 per week for married couples and $2.25 per week for single pensioners. Similarly approximately 300 000 low-income families with 800 000 children Will benefit by the excellent family allowance scheme. The easing of estate duty on an estate passing to the spouse is also to be welcomed. Given the gravity of our economic conditions, these provisions show that the Government is concerned very much with people. When the economy is restored to health we may expect further enlightened, selective social programs aimed at helping people in a practical and dignified manner. Meanwhile, this Budget should still be seen as a people’s Budget for it incorporates the tax indexation proposals. This means that people’s taxes will not rise this year as they would otherwise have done under the graduated tax scales. People will, therefore, have more of their own money to do with as they please. To achieve that the Government has forgone $ 1 ,000m of estimated tax revenue.

Mr Innes:

– Whose initiative was that? It was not yours.

Mr MACPHEE:

– That is a most enlightened decision and one which the Labor Party would not have made because it would not have forgone that amount of money. It believed it knew best how people wanted to spend their money, thanks to this Government, centralism and paternalism are finished. Equally enlightened is the social reform by way of the family allowance scheme. While it may not stimulate much consumer demand of itself, it is a most desirable social measure.

It is unfortunate that the Government could not relieve some of the special burdens of the middle income earner. As the honourable member for Ryan (Mr Moore) has ably observed, the middle income group has been forced to bear the brunt of the 3 years of hard labour and one can only hope that next year’s Budget can give them some relief- not merely because they bear a greater relative burden now than do other income groups but also because they include some of the most creative and innovative people in our society. For such people, this relatively onerous burden is a penalty to initiative. Whether one respects it or not, it is a fact that we are a materialistic society and, consequently, penalties of a material kind cost the nation effort and initiative.

When inflation has been reduced, I hope that this Government will grant new incentives to Australians to help provide for their own futures- especially by way of the various forms of life assurance. Inflation has so eroded savings that the surrender rate of life policies has reached worrying proportions and, if continued, this would have a serious impact upon capital investment in Australia as so much of our investment comes from life companies and superannuation funds. After harsh tax measures in each of the 3 Labor Budgets and being omitted from the indexation schemes announced by this Government, life assurance companies are worried. I can understand nothing being contained in this Budget as we do not want to encourage more saving at present. Nonetheless, we need to consider granting more incentive next year for people to provide for their own futures.

Despite some sensible questioning of the assumptions implicit in this Budget, especially in relation to a boost in business confidence and a slight reduction in real wages, no one can deny to the present Government the achievement of reducing government spending so massively, thereby removing a huge inflationary pressure. When the reduction in the deficit is accompanied by the loss of revenue stemming from the introduction of complete personal and partial corporate tax indexation and the absence of increases in indirect tax, the achievement is quite remarkable. Its aim is for a sound, sure recovery- in keeping with responsible economic management. One commentator described that strategy as ‘dull’. That is hardly a fair comment. In the circumstances the policies have been dramatic. In any event, I have no doubt that if that commentator meant his remark to be critical, his criticism would not be shared by the majority of the electorate. The Leader of the Opposition is unrepentant and he will find the electorate equally unforgiving.

Any budget will be framed upon assumptions, especially in these unchartered economic oceans. Of the assumptions in this Budget, the most important is that inflationary expectations are the major factor discouraging consumer spending and corporate investment. This assumption seems to me to be at least as valid as any other I have heard advanced and, if the assumption proves to be correct, the Budget will go a long way towards reviving the economy for the benefit of all.

What is certain is that the Government had to grasp the nettle and settle its strategy on some assumptions. This it has done with courage and Australians of goodwill should gladly do all in their power to support the strategy. This will require patience and some short-term self-denial. Media attention suggests that this is being asked in particular of wage earners. I shall say more about that in another economic debate as time does not permit me to do so now. All entities in the community, all individuals in the communitynot merely those who are categorised as wage earners- are asked to show patience. All entities in the community can say with no less justification that can wage earners, that they should have received more immediate assistance. In their own interests, however, and in the interests of other people in the community. They must now act in a manner consistent with the Budget strategy. Thus, despite the fact that demand is still about 10 per cent below capacity, industry must utilise the investment allowance more than it has done and restock so that this may assist the economy to advance surely by the end of the current financial year.

Because of the complex nature of the economy and the difficulty of understanding its working, the onus is more on corporations to invest than it is on consumers to spend. It is obviously desirable that the two should be concurrent but the corporations must show the way and the consumers will surely follow soon afterwards.

Industrialists should be stung by the ambiguous reference of the Treasurer to their needing to emerge from their ‘shell-holes and start buying plant, equipment and new buildings, restocking and taking on new workers’. Businessmen certainly could be expected to retreat to shell-holes after the bombardment they received during 3 years of Labor government. But the clear implication in the Treasurer’s words is one of scorn if the industrialists of Australia do not soon start investing and thereby lead the recovery.

The Government has done its pan. Apart from its massive reductions in government spending, the investment allowance and this Budget have given clear encouragement to the private sector. The money supply may expand by a little more than the estimated 10 per cent to 12 per cent but, in any event, the deficit will prove to be small enough to enable companies to borrow without being in competition with the public borrowing requirements and so forcing up interest rates. The challenge, therefore, is now before industry. The inventory cycle, as I heard the honourable member for Oxley say today, is generally thought to be very close to its bottom. For this reason alone immediate stimulation of industry was probably unnecessary. Inventory rebuilding is, therefore, beginning and it should be possible for many companies to begin to plan new investment programs and utilise the generous 40 per cent investment allowance. Company profits have increased in many areas despite indifferent demand and, although some of the worst company reports are yet to come, many companies should be able to look forward to productivity improvement at a gradually accelerating rate. Hopefully this will contribute to profitability to a sufficient extent to enable price increases to be minimal. In that fashion, wage increases also may be contained.

Twenty minutes is insufficient time in which to appraise a Budget of this magnitude and complexity, but I hope that in other debates on the economy we may have an opportunity to expand and deal with other important aspects of this very important Budget strategy. Meanwhile, I congratulate the Treasurer upon his achievement and strongly support this Bill.

Debate (on motion by Mr Martin) adjourned.

page 767

ADJOURNMENT

Immigration -Television - Def Fence - News Bulletin-Television Program -ANZUS Treaty -Visit of Nuclear Warship

Motion (by Mr Staley) proposed:

That the House do now adjourn.

Mr INNES:
Melbourne

– I rise one again to draw attention to the plight of migrant people in our great cities and once again to refer to the misleading way- I have not used the term that I wanted to use as I have been advised by you, Mr Acting Speaker, in the past not use it- in which the Government attempts to pull the wool over the eyes of certain individuals in our community. The migrant people, who contribute so much to the economic and cultural well-being of the country, received recognition of their special needs for the first time under the 3 years of Labor government. They are now again being treated as second class citizens. In the economically disastrous and socially heartless Lynch Budget their legitimate needs have been treated with contempt, as I outlined in my speech on the Appropriation Bill (No. 1 ) 1976-77 on 26 August.

It seems that what I and other honourable members on this side of the House have said on this subject has had some effect, because apparently the Prime Minister (Mr Malcolm Fraser) has suddenly realised that this shabby treatment of migrants is likely to have serious electoral repercussions. He does not intend actually to do something of real significance for the migrant peoples. After all, few of them are in the salary categoy of $25,000-plus a year, which is the group on whose interests this Government makes its decisions. The Prime Minister has decided to engage in one of the enormous confidence tricks for which he and those on the other side of the House who support him have become notorious.

What is this confidence trick? Precisely this: The Prime Minister came up with the idea of buying off legitimate criticism of his Government’s shabby record in the migrant welfare field by making $50,000 available to the Greek community in Melbourne and $50,000 available to the Italian community in Sydney. He has since thought better of this idea. Presumably he thinks it only highlights the sorry position of recipient migrant groups. So he has now come up with the brilliant idea of establishing a migrant information centre in each of the cities to which I have made reference.

It is a fairly brilliant idea. I support absolutely the brainwave of the Prime Minister. But let us put this laudable idea into proper perspective. It is a laudable idea, but is one that is not backed by any positive commitment. The Prime Minister proposes to make available to these centres the pittance of $50,000 each. So much for the depth of commitment behind the Prime Minister’s initiative. He is not interested in bettering the circumstances of the disadvantaged. He is engaging in tokenism and in a blatant political exercise from which he hopes to extract a maximum of electoral mileage for a minimum of commitment. The situation is laughable. He has compounded the joke by asking the Minister for Social Security (Senator Guilfoyle) and the Minister for Immigration and Ethnic Affairs (Mr MacKellar) to think up ways of spending the $50,000.

Mr Sullivan:

-Come off it

Mr INNES:

– If the honourable member does not believe that he should go and ask the Prime Minister. The same situation applies to one of the commitments of the Minister for Social Security, Senator Guilfoyle, who went to the Italian community in Melbourne and made a great play of donating $5,000 to FILEF, which is an Italian welfare organisation. Now either the Minister for Immigration and Ethnic Affairs or the Minister for Social Security wants to get rid of a lynch-pin in the organisation. The FILEF organisation has been told by way of correspondence that the grant for the employment of a welfare rights officer will terminate on 1 January 1977. So this great hypocritical approach to trying to dupe migrants into believing what is going on in the Budget does not stand the test of examination.

This is not an extraordinary situation. We all know the severe limitations on the work of those 2 Ministers. But even they will not have to tax their brains unduly, if they have any, to find ways of spending such a pittance. We on this side of the House say to the Prime Minister By all means let us have migrant information centres not only in Sydney and Melbourne but also in other major centres of population, but let us not insult the many people among us who deserve better from this Government than shameful acts of tokensim. Let us have migrant information centres set up with realistic staffs and budgets so that the ethnic communities among us can begin to receive the sort of services from government to which they are well and truly entitled.

Mr BIRNEY:
Phillip

– I would like to draw the attention of the House to the television ratings rat race. Last week Sydney television stations screened a near-record 189 repeat programs. Some of them had hit the screen more than once before. I estimate that about 200 repeat programs will be shown on Sydney television by the end of this week and that they will take up almost that number of viewing hours. The Sydney channels will be on the air this week for a combined 450 hours or thereabouts. The fact that almost 200 of those hours will be taken up by repeat programs is to my way of thinking a giant insult to the viewing public. I am told that the reason for this deluge of repeat programs is that we are currently- once again- in the season of non-rating madness.

Mr Goodluck:

– The silly season.

Mr BIRNEY:

– The silly season, if you like. For 2 weeks during the school holidays the ratings take a rest while the television moguls prepare themselves for the all-important final 2 rating surveys of the year. They, of course, determine the top station for 1976 and the amount of revenue that that station ultimately gathers from advertising. The trouble is that this race to the top is run at the expense of the viewing public. It is not just that we are subjected to repeats. Last week I noted that fifty of the 109 programs which were shown in peak viewing time after 7 p.m. had been screened at least once before, but we were obliged to suffer low quality repeats.

Australian television today is a giant confidence trick on the public. We are being thrown the scraps and are expected to make a main meal of them. Culturally we are still going hungry. Some programs have been shown so often that the other day I was shocked to read that a certain seven or eight year old who played a leading role in a popular late afternoon comedy had died in America. She was 18 years of age. It costs stations only a few dollars to screen repeat programs. As long as they do that, they do not have to buy new ones. But what is more to the point as far as the Australian film industry is concerned is that the stations do not have to buy more local productions. Television spokesmen argue that repeat programs are a service to viewers and that not everyone sees a program the first time around. But one repeat is surely sufficient. Two repeats or more are enough to drive a person to bed or to begin to look forward to catching the new commercials. That is a sad situation. 1 say that possibly at the expense of repeating myself.

Mr ARMITAGE:
Chifley

-This morning during question time I raised a question in respect of a transcript prepared by the Parliamentary Library from a tape recording of the 7.45 a.m. news of the Australian Broadcasting Commission on 23 August. I will read the transcript to the House. I did ask leave of the House to table it, but leave was refused. I do not know why it was refused. I do not know why everyone was so sensitive about it. It reads as follows:

The Defence Minister, Mr Killen, said yesterday-

That would be on 22 August- that in any future conflict-

Mr Fisher:

– What station was this?

Mr ARMITAGE:

– It was on the ABC, my friend. The transcript goes on: . . Australia would not be involved alongside any big power. The Defence Minister said that Australians should understand that in future they were on their own. Mr Killen was speaking after reviewing the 25th Battalion Royal Australian Regiment, in Toowoomba in Queensland.

Mr Donald Cameron:
GRIFFITH, QUEENSLAND · LP

- Mr Acting Speaker, I rise on a point of order. I am sorry to interrupt the honourable member for Chifley. I have in mind one of the Standing Orders. I wish I could put my hands on it straight away. If I had a little time, I could. I know that I am taking my point of order against an honourable member who is also a Deputy Speaker, but the Standing Order I am thinking of states that no member shall raise a matter which has been considered previously during the day. If my memory serves me correctly, the honourable member for Chifley is raising an issue which was raised during question time, when he was effectively answered by the Minister for Defence. Mr Acting Speaker, I ask you to rule that way.

Mr ACTING SPEAKER:

-The point of order raised by the honourable member for Griffith does not cover the matter being debated at the moment by the honourable member for Chifley. The Standing Order he is thinking of relates to legislation that has been discussed in the House during the day.

Mr ARMITAGE:

– Thank you, Mr Acting Speaker. The transcript goes on:

Mr Killen was speaking after reviewing the 25th Battallion Royal Australian Regiment, in Toowoomba in Queensland. The Defence Minister again refuted claims that Australian servicemen had behaved dishonourably in past conflicts. Mr Killen described allegations of dishonourable conduct as infamous. He said he would continue to denounce those who made them. Mr Killen said the Queen’s uniform had never been sullied by those wearing it and would not be sullied while he remained Defence Minister.

The reason I raise this matter is that the Government has given great emphasis to its contention that the whole defence of this country is dependent upon the ANZUS Treaty, the ANZUS alliance. I think the Minister for Defence has made this point on numerous occasions. This brings in the whole issue, of course, that we are, according to the Minister for Defence, the Government and the Prime Minister (Mr Malcolm Fraser), essentially dependent upon the United States of America and other countries for the defence of Australia. I do not know when the Minister for Defence made his statement. The transcript just says that he was speaking after reviewing the 25th Battalion Royal Australian Regiment. I do not know whether it was in the officers mess afterwards or when it was, but is quite obvious that in making such a statement he does not agree with Government policy.

Mr Bourchier:

- Mr Acting Speaker, I think the honourable member for Chifley ought to be made to withdraw that remark.

Mr ARMITAGE:

– What remark?

Mr Bourchier:

– You know what remark it was. You suggested that the Minister was at the officers club when he made a statement. You should withdraw it.

Mr ACTING SPEAKER:

-Order! If the honourable member for Chifley made such a remark about the Minister, I ask that he withdraw it.

Mr ARMITAGE:

– I said that I did not know where the Minister said this. I said that the transcript states that he was speaking after reviewing the 25th Battalion Royal Australian Regiment in Toowoomba in Queensland. I do not know whether he said it to the Regiment or after he had spoken to the Regiment The transcript is not clear. He could have made his statement anywhere.

Mr ACTING SPEAKER:

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

Mr Killen:

- Mr Acting SpeakerMr ACTING SPEAKER-Order! Although the matter raised by the honourable member for Chifley concerns a statement alleged to have been made by the Minister for Defence, I suggest that the Minister, who is now seeking the call, speak at 1 1 o’clock because of the new sessional order relating to the adjournment debate.

Mr Killen:

– I would like to take him while I am fresh.

Mr ACTING SPEAKER:

– This is the first time since the introduction of the new sessional order that a Minister has sought to speak before 11 o’clock.

Mr Killen:

– Never mind about the rules. I think I am under some obligation to answer the honourable member for Chifley.

Mr ACTING SPEAKER:

– The sessional order notwithstanding, if the Minister presses the point he must be allowed under Standing Orders to speak. I call the Minister for Defence.

Mr KILLEN:
Minister for Defence · Moreton · LP

– I am glad that the honourable member for Chifley (Mr Armitage) turns towards to me to listen. May I say to him that what he put to me at question time this morning was completely without substance. He holds up a transcript of an Australian Broadcasting Commission news bulletin. He now holds out the ABC to command a splendid sense of infallibility. If I may venture a view to the honourable gentleman, I invite him to ask that Alvin Purple continue. What was said of me on the ABC was utterly incorrect. I am not given to criticising the working journalists, but most of the journalists in this Parliament cannot write shorthand. The honourable member for Chifley has known me for a long time. I have no acerbity of language to level against him. I have no pressure of political view to offer against him. But he has this genuine interest in this matter. I would seek to correct it. I did not say that this country would ever be on its own. I repeat that. I did not say that this country would be on its own. What I did say was that this country -

Mr Antony Whitlam:
GRAYNDLER, NEW SOUTH WALES · ALP
Mr KILLEN:

– I am glad that the son of the Leader of the Opposition has some interest in language. After all, that is what his discipline has been about. What I did say was that in years gone past this country was accompanied by a large provincial power. Does any honourable member on the other side have difficulty about that? Then I come to the question asked by my friend the honourable member for Chifley (Mr Armitage). Chifley is a very great name in this Parliament, and the honourable member for Chifley and I have exchanged insults over the years. He asked me whether or not I had said that we would fight on our own, and I said ‘No’. In years gone by- and I ask my honourable friend to agree with me on this- we had not fought on our own, we had a large provincial power with us. There is nothing wrong with that, is there? I am sure my honourable friend would not disagree with me. I went on to say at question time today, not, I hope, in any sense by way of meritricious antagonism, that as far as the future was concerned we could imagine ourselves on our own. I say to the honourable member for

Chifley and to all of his honourable colleagues that if they want to talk to me about this matter I will be only too delighted so to do.

Mr ACTING SPEAKER:

-Order! The Minister’s time has expired.

Mr SCHOLES:
Corio

-The matter I want to raise is purely parochial and I am sure will not elicit the type of drama produced by the last 2 speakers. I wish to direct the attention of the House, as I have directed, by way of a letter, the attention of the Minister for Immigration and Ethnic Affairs (Mr MacKellar), to one of the problems for migrants in the Geelong area which has resulted from the amalgamation of the former Department of Labor and the former Department of Immigration and the separation of those departments since the change of Government last year. Prior to the amalgamation of the departments following the 1974 election, officers of the Department of Immigration serviced the Geelong area on a regular basis- I think for 5 half days a week. A decision had been taken at that time to establish a full time office of the Department in the Geelong area. I point out that some 22 per cent of the population of the area is of migrant origin and a very heavy work load for the migrant communities has been undertaken by the Department of Immigration. At the time of the amalgamation of the 2 departments, the officer who had been carrying out the duties of the Department of Immigration in the area was absorbed into the Department of Labor and Immigration and, as part of that Department’s Commonwealth Employment Service in Geelong, still carried out the same duties. That was not as satisfactory as the previous position, although the officer was at least part of the Department and therefore in direct communication with departmental decisions.

Since the Department has become a separate entity the officer concerned has remained with the Department of Employment and Industrial Relations and on an agency basis has carried out those functions previously carried out for the Department of Immigration in its single and combined functions with the Department of Labor. However, the officer concerned is now an officer of another Department and is not in direct communication with the Department for which he is acting. He also has a work load which he is required to undertake by the Department of Employment and Industrial Relations. That is not a satisfactory situation because the area has a work load sufficient to justify direct service by the Department concerned. It also removes from the Department of Employment and Industrial

Relations an officer whom they obviously need in the area. Certainly the officers concerned find it unsatisfactory, and I believe that the reestablishment of an office or regular visits by an officer of the Department of Immigration and Ethnic Affairs is highly desirable.

I draw this matter to the attention of the House. Because of administrative arrangements made by successive governments a service has been either lost to the area or downgraded. The migrants in the Geelong area, and I am sure the same situation exists in Wollongong and Newcastle, where similar offices had existed previously, need the services of an officer who is directly in touch with the policy decisions of the Department. I draw this to the attention of the Minister, and I hope that some action will be taken to re-establish a service which had been given to the area after representations by me and by the former member over a number of years. I ask the Minister to give the matter his immediate and favourable consideration.

Mr ACTING SPEAKER:

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

Mr SULLIVAN:
Riverina

-I should like to say a few words about the Australian Broadcasting Commission’s program Alvin Purple. I started by saying that I thoroughly endorse the action taken by Sir Henry Bland because I believe that it is necessary for him to get support on this occasion. This is quite clearly a matter of who runs the Australian Broadcasting Commission. We have to decide whether it is to be Sir Henry Bland and the Commissioners or whether it is to be some of the staff of the ABC. I believe that on this occasion Sir Henry Bland and the Commissioners have acted in a correct and proper manner. There can be no doubt about that. I have viewed one program, or part of it.

Mr Jull:

– The worst production I have ever seen.

Mr SULLIVAN:

-Yes, I would say it is the worst production I have ever seen. It has no redeeming values whatsoever.

Mr Hodgman:

– Why were you watching it?

Mr SULLIVAN:

-I watched it with the express intention of being able to speak in this House. Because I watched it I can speak from having a personal view of it. The program is rubbish, and I believe sincerely that the Australian community generally should not be forced even to have a choice of whether they want to look at rubbish or not, particularly from the ABC. If the ABC can spend $500,000 -

Mr Armitage:

– You have got -

Mr SULLIVAN:

-I hear a voice from the rabbit.

Mr Armitage:

– You have got it exactly. I see it in your eyes.

Mr SULLIVAN:

-I am pleased that the honourable member acknowledges that he knows to whom I was speaking. I am not talking about the cost of carrots; I am talking about a television program shown by the Australian Broadcasting Commission.

Mr Armitage:

– You have got the same link as we have.

Mr ACTING SPEAKER:

-Order! The honourable member for Chifley has already spoken in this adjournment debate.

Mr SULLIVAN:

– You would hardly realise that. In my opinion, the question is whether we are going to use the gift of communication we have within the community for the benefit of the community or whether we are going to set about destroying that gift. That program, in its ability to communicate, just does not rate. The jokes are poor, the acting is extremely poor and it certainly does not reach, in my opinion, an acceptable standard to be shown on ABC television. If the commercial television stations or if some other organisation would see fit to purchase the program- I would be extremely doubtful whether anyone would be foolish enought to purchase such rubbish- there may be some argument for it. However, I would suggest that all honourable members become informed on this issue and give Sir Henry Bland and the commissioners the support they deserve on this occasion. Those members of the ABC’s staff who would see fit to impose a set of extremely poor values on the community should know that they will not get the backing they need and that Sir Henry Bland and the commissioners will get the backing on each occasion they see fit to take this sort of action.

Mr CREAN:
Melbourne Ports

– Generally I am not in favour of censorship, but I believe that the television program called Alvin Purple has neither talent nor wit. I must say that I am a bit disappointed. I watch the Australian Broadcasting Commission’s television programs. I sometimes say that the best programs shown on ABC television are those which come from the British Broadcasting Commission. Nevertheless, I could find no merit whatever in the program Alvin Purple. I do not know what it cost to produce or what the principal actor receives. I have seen only one episode of the series. Fortunately I saw it in black and white and not in colour.

I repeat what I said before: I am not in favour of censorship. However, I find it a little hard to believe that people of so-called talent as actors could perpetrate what I saw in the second or third episode of the Alvin Purple series. I hope that we have potential for better things from both our actors and producers. I found neither wit nor talent in what I saw of the second or third episode of the series whichever it was. I do not normally agree with censorship. I think that there are times when producers and those who call themselves actors should at least have a little cognisance of the people for whom they are producing and the audience which will witness their work. I say with all respect that I am not normally in favour of censorship, but I wish sometimes that those in charge of productions would have a little cognisance of the intelligence of the people for whom they are supposed to be producing.

Mr HODGMAN:
Denison

-The year 1976 is the twenty-fifth anniversary of the signing of the ANZUS treaty, a treaty which has been the cornerstone of the foreign affairs and defence policy of this country for a quarter of a century under governments, both Liberal and Labor. At 6.30 a.m. today a United States vessel entered Port Phillip and arrived at the wharf. Because of the actions of a communist trade union leader, aided and abetted by people who should know better, that vessel, nuclear powered as it was, was forced to berth without the assistance of tugs, and whilst it remains in this country it and the wharf are declared black by communists who, in my opinion, are making a deliberate attempt to prevent Australia from honouring her treaty obligations under ANZUS.

Worse still, the people concerned are aided and abetted by the Premier of the most heavily populated State in this country, New South Wales. Of course, Mr Wran’s action in saying that vessels coming to this country pursuant to a treaty would not be welcome in New South Wales was completely unconstitutional. If Mr Wran gets his way and United States vessels are not permitted to enter New South Wales waters and use New South Wales port facilities, Mr Wran, single handed, will have created the situation whereby the most heavily populated State in Australia will be the worst defended from the point of view of naval strategy. For the people of New South Wales to accept a situation like that absolutely horrifies me. The question I ask rhetorically is this: If Mr Wran is so brazen as to say in peace time: ‘We will not permit our allies’ vessels into our waters ‘, who is to say that he will not take precisely the same attitude in war time?

People may think I am being a little bit hard in relation to this matter, but I put my view forward quite reasonably and logically. Neville Wran knows that the visit of the Truxtun, the visit of the Enterprise and the visit of the Long Beach are all part of operation Kangaroo II- an ANZUS operation which has been planned for a considerable period of time and which is of the utmost strategic importance to the defence of this country. For that man to have the gall to say that those vessels which one day may be called upon to defend this country are not welcome in the State of New South Wales is unpatriotic in the extreme and should be condemned by every decent thinking Australia. Mr Wran, as Premier of the State, stands alongside a man like Ted Bull who boasts tonight that he is able to bring to a halt facilities which would normally be made available to any vessel entering the port of Melbourne and particularly a naval vessel under a treaty. For a communist to boast that he can use such power as virtually to make it impossible for our allies to feel welcome in this country is, I believe, disgraceful. Of course, we have not heard a word from the Opposition.

A few years ago people like Bull would be branded as fifth columnists and traitors, and I brand him as such in 1976. 1 brand him as a man who is being disloyal to his country. If his sort of thinking gathers momentum, I suggest that the people in this country will come to realise that a small minority of communists has far more power in Australia than probably a similar group would have in countries which are known to have socialist or totalitarian regimes. I would not let this day pass without putting on record the fact that not one member of Her Majesty’s Opposition has been patriotic enough to stand in this Parliament on this day and condemn out of hand the action of the communist trade union boss Bull in banning from using our wharf facilities a vessel which is sent here by one of our great allies under a treaty. I brand the Opposition as aiding and abetting the communists. I think it is a crying shame that we do not have men on the other side of the Parliament with enough courage to get up and condemn the communists and the left wing collaborators who are trying to break down our treaty arrangements.

Mr Keith Johnson:
BURKE, VICTORIA · ALP

-A challenge was just thrown down by the honourable member for Denison (Mr Hodgman). He has become well known in this House, in the short time that he has been here, for his Red baiting. He made a fundamental error in the statement that he made to this House when he spoke about Ted Bull, who is the Secretary of the Waterside Workers Federation of Australia and who is a member of the Communist Party, controlling the waterfront. He said that the Truxtun was berthed without the aid of tugs. The Waterside Workers Federation has no control over seamen. Seamen man tugs. The Secretary of the Seamen’s Union in Victoria is a member of the Australian Labor Party. Therefore a fundamental error was made by the honourable member for Denison. He also criticised the Premier of New South Wales and seemed to indicate to this House that unless the Truxtun were allowed into Sydney Harbour that State would be without defences. He did not bother to say that the reason Mr Wran, the Premier of that State, gave for not allowing the Truxtun into Sydney Harbour was that nobody could assure him and the people of New South Wales that the harbour would not be destroyed if an accident occurred to the nuclearpowered and nuclear-armed vessel, Truxtun

Mr ACTING SPEAKER:

-Order! It being 1 1 o’clock, the debate is interrupted. The House stands adjourned until 2. 1 5 p.m. tomorrow.

House adjourned at 1 1 p.m.

page 773

ANSWERS TO QUESTIONS UPON NOTICE

The following answers to questions upon notice were circulated:

Phillips Petroleum Company (Question No. 577)

Mr Morris:
SHORTLAND, NEW SOUTH WALES

asked the Treasurer, upon notice:

  1. 1 ) Is he able to say whether the United States multinational corporation, the Phillips Petroleum Company, carries on activities either directly or indirectly through associate companies or subsidiaries in Australia; if so, what are the names of the companies concerned.
  2. ) What is the nature of each of the companies ‘ activities.
  3. When did each of the companies commence operations in Australia.
  4. What is the nominal capital and paid up capital of the Phillips Petroleum Company and each of its subsidiaries or associates in Australia.
  5. What were the sales and operating results of each of these companies during the years 1969-70 to 1974-75.
  6. Who were the Australian directors of the Phillips Petroleum Company and its subsidiaries or associates in each of the years 1969-70 to 1974-75.
Mr Lynch:
LP

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

I do not think that it would be appropriate for me to attempt to provide information of this kind on the affairs of individual companies. Even if I were to do so, all I could use would be published information; it would not be appropriate for me to release any information that might be provided by companies to the Government on a confidential basis. In the circumstances I suggest the honourable member might wish to direct his questions to the head office of the Phillips Petroleum Company, which I understand is at Phillips Building, Bartlesville, Oklahoma, 74004, U.S.A.

Ashland Oil Inc. (Question No. 578)

Mr Morris:

asked the Treasurer, upon notice:

  1. Is he able to say whether the United States multinational company, Ashland Oil Inc., carries on activities either directly or indirectly through associated companies or subsidiaries in Australia; if so what are the names of the companies concerned.
  2. What is the nature of each of the companies’ activities.
  3. When did each of the companies commence operations in Australia.
  4. What is the nominal capital and paid up capital of Ashland Oil Inc. and each of its subsidiaries or associates in Australia.
  5. What were the sales and operating results of each of these companies during the years 1969-70 to 1974-75.
  6. Who were the Australian directors of Ashland Oil Inc. and its subsidiaries or associates in each of the years 1 969-70 to 1974-75.
Mr Lynch:
LP

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

I refer the honourable member to my answer to Question No. 577. The head office of Ashland Oil Inc. is, I understand, at 1401 Winchester Avenue, Ashland, Kentucky, 41101, U.S.A.

Lockheed Corporation (Question No. 579)

Mr Morris:

asked the Treasurer, upon notice:

  1. 1 ) Is he able to say whether the United States multinational company, the Lockheed Corporation, carries on activities either directly or indirectly through associate companies or subsidiaries in Australia; if so, what are the names of the companies concerned.
  2. ) What is the nature of each of the companies ‘ activities.
  3. When did each of the companies commence operations in Australia.
  4. What is the nominal capital and paid up capital of the Lockheed Corporation and each of its subsidiaries or associates in Australia.
  5. What were the sales and operating results of each of these companies during the years 1969-70 to 1974-75.
  6. Who were the Australian directors of the Lockheed Corporation and its subsidiaries or associates in each of the years 1969-70 to 1974-75.
Mr Lynch:
LP

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

I refer to the honourable member to my answer to Question No. 577. The head office of the Lockheed Corporation is, I understand, at 2555 North Hollywood Way, Burbank, California, U.S.A.

Northrop Corporation (Question No. 580)

Mr Morris:

asked the Treasurer, upon notice:

  1. 1) Is he able to say whether the United States multinational company, the Northrop Corporation, carries on activities either directly or indirectly through associate companies or subsidiaries in Australia; if so, what are the names of the companies concerned.
  2. ) What is the nature of each of the companies ‘ activities.
  3. When did each of the companies commence operations in Australia.
  4. What is the nominal capital and paid up capital of the Northrop Corporation and each of its subsidiaries or associates in Australia.
  5. What were the sales and operating results of each of these companies during the years 1969-70 to 1974-75.
  6. Who were the Australian directors of the Northrop Corporation and its subsidiaries or assosiates in each of the years 1969-70 to 1974-75.
Mr Lynch:
LP

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

I refer the honourable member to my answer to Question No. 577. The head office of Northrop Corporation is, I understand, at 1800 Century Park East, Los Angeles, California, 90067, U.S.A.

Tanning and Footwear Industries (Question No. 695)

Mr Short:
BALLAARAT, VICTORIA

asked the Minister representing the Minister for Industry and Commerce, upon notice:

  1. 1 ) Has the Government considered the future development of the tanning and the footwear manufacturing industries in Australia.
  2. If so will the Minister take early steps to inform these industries, as a lack of clear guidelines is causing uncertainty, particularly to those in the non-metropolitan areas.
Mr Howard:
LP

– The Minister for Industry and Commerce has provided the following answer to the honourable member’s question:

  1. Both the tanning and footwear industries have been subjected to recent inquiries by the Industries Assistance Commission. Late last year the previous Government accepted the Commission’s recommendations in relation to long term levels of assistance that should be accorded to the tanning industry. These levels of assistance are approximately equivalent to the previously existing levels of assistance. In relation to the footwear industry the Commission is to report to the Government no later than 30 November this year on the long term assistance required of the industry.
  2. Assistance measures available to the tanning industry were established following acceptance of the report of the Industries Assistance Commission of 24 April 1973 on Tanned and Finished Leather; Dressed Fur. In relation to the footwear industry, the Government’s attitude towards the longer term assistance measures for this industry will be decided following consideration of the Industries Assistance Commission’s report on the industry. In the meantime imports of most types of footwear are subject to import licensing controls.

Tanning and Footwear Industries (Question No. 696)

Mr Short:

asked the Minister representing the Minister for Industry and Commerce, upon notice:

  1. 1 ) Is it a fact that the price of hides in Australia has risen by up to 350 per cent since early 1 975.
  2. Has this price rise been brought about mainly because of competition from overseas purchasers of hides.
  3. Has the price rise had a detrimental effect on the tanning industry in Australia.
  4. What effect has the increase in the price of hides had on the footwear manufacturing industry in Australia.
Mr Howard:
LP

– The Minister for Industry and Commerce has provided the following answer to the honourable member’s question:

  1. 1 ) There is a wide variation, in terms of quality and other characteristics, between hides offered for sale in Australia. In view of this and the fact that there is no official price index solely for hides sold in Australia it is not possible to give a firm answer to this part of the honourable member’s question. However, in general terms, the available information suggests that for some hide types prices have increased by up to 350 per cent between early 1 975 and mid 1976.
  2. The price of hides and skins is sensitive to demand and supply situations. As most hides and skins are exported, overseas purchasers would influence the price structure.
  3. Price rises for hides and skins alone should not put the local tanning industry at a serious disadvantage against overseas producers of leather who source their requirements on the international market. Cost increases in other areas would have an important bearing on the well being of the industry.
  4. The increasing price of hides would effect the price level of leather used in footwear production. However the final cost effect of price increases in hides would constitute only a small element of the total costs of the overall footwear industry. The footwear manufacturing industry has recently been the subject of an inquiry by the Industries Assistance Commission and a report on the industry’s long term assistance requirements is expected to be received shortly. This report will comment on the major influences affecting future development of the industry.

Commonwealth Property: Damage in Demonstrations (Question No. 856)

Mr Abel:
EVANS, NEW SOUTH WALES

asked the Minister representing the Minister for Administrative Services, upon notice:

  1. 1 ) What has been the total cost of damage to Commonwealth vehicles and property during the Governor General ‘s visits to various parts of Australia since 1 3 December 1 975.
  2. What was the form of damage in each case.
  3. Who will be paying for the damage in each case.
  4. What are the names and addresses of the persons responsible for the damage.
Mr Street:
LP

– The Minister for Administrative Services has provided the following answer to the honourable member’s question:

  1. 1 ) $3,6 1 8 (estimated ) as at 20 August 1976.
  2. One Rolls Royce, one Daimler and three Ford Fairmont vehicles have been damaged. The damage included denting of door panels, side panels, guards, bonnets, turret tops and broken windows. My Department has no knowledge of any other damage to Commonwealth property.
  3. 3 ) The Commonwealth.
  4. The damage was caused as the result of demonstrations. The names and addresses of the demonstrators concerned are not known.

Treaty Information (Question No. 873)

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

am asked the Minister for Foreign Affairs, upon notice:

Will he bring up to date the information on treaties which was incorporated in Hansard ‘on 5 June 1975 (page 3450).

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

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

The texts of treaties to which Australia became a party between 5 June 1975 and 3 March were incorporated in Hansard on 3 March 1976, page 523.

The texts of the treaties to which Australia has become a party since 3 March 1976 will be tabled in Parliament shortly.

I draw the honourable member’s attention to my Department’s publication, Hie Australian Foreign Affairs Record, in which a summary of treaty action appears each quarter. The last issue to contain such a summary was that of June 1976.

Visits of British Nuclear-Powered Warships (Question No. 875)

Mr E. G. Whitiam asked the Minister for Foreign Affairs, upon notice:

When did Britain ask that her nuclear-powered warships be allowed to enter Australian ports (Hansard, 4 June 1976, page 3040).

What was the date and nature of the McMahon Government ‘s response.

Mr Peacock:
LP

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

  1. On 31 December 1971, the British Government expressed interest in having one of its nuclear-powered submarines visit Australian ports.
  2. On 1 1 January 1972, the then Prime Minister the Rt Hon. William McMahon informed the British Prime Minister, the Rt Hon. Edward Heath, that the Australian Government was reviewing the control arrangements and conditions relating to the entry of nuclear-powered ships to Australian ports, and that the British Government would be advised when the review was complete.

Overseas Aid: Percentage of Gross National Product (Question No. 877)

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

am asked the Minister for Foreign Affairs, upon notice:

What percentage of gross national product has Australia spent on overseas aid in each financial year since the United Nations General Assembly set the target of 0.7 per cent.

Mr Peacock:
LP

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

South Africa: Sporting Contacts (Question No. 878)

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

am asked the Minister for Foreign Affairs, upon notice:

Can he say through what countries the New Zealand rugby union team travelled to and from South Africa.

Mr Peacock:
LP

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

page 775

No

There is reason to believe, however, that the team’s itinerary avoided Australia in response to publicly known Australian attitudes towards sporting contacts with South Africa.

Police: Tour of South Africa (Question No. 898)

Mr Hurford:

asked the Minister for Foreign Affairs, upon notice:

  1. 1 ) Can he say whether a group of members of Australian State Police Forces is going overseas on an escorted tour of South Africa in October.
  2. ) If so, can he also say what support for this tour is being provided by South African police, and any other pan of the South African Government.
  3. Does this visit have the approval of the Australian Government
Mr Peacock:
LP

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

  1. No.
  2. 1 have just learnt that South African Airways has available, on request, brochures advertising tours of South Africa, on a package basis, for members of the various police forces in Australia and their families.
  3. The approval of the Australian Government for this exercise has neither been sought nor given. Needless to say it would be a matter of serious concern to the Australian Government if such visits assumed any official character, and the Government would consider then what action it might be appropriate for it to take.

Members’ Research Assistants (Question No. 905)

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

asked the Minister representing the Minister for Administrative Services, upon notice:

Will the Minister extend to the research assistants of private Members the same provisions, in respect of travel, allowances and overtime, as were recently approved for the research assistants of some Ministers.

Mr Street:
LP

– The Minister for Administrative Services has provided me with the following answer to the honourable member’s question:

The Government recently determined that an Electoral Assistant on the staff of a Minister may travel at the Minister’s direction between a Minister’s home base and Canberra. When so travelling an Electorate Assistant is entitled to payment of fares and travelling allowance. An Electoral Assistant is not entitled to payment of overtime and travel entitlement is restricted to the journeys specified above.

No decision has been made by the Government to extend this travel entitlement to the Electorate Assistants of private Members.

The honourable member would be aware, however, that the Remuneration Tribunal, in its Determination Number 1 976/6 of 2 1 June 1 976, determined that up to, but no more than, two of the return visits to Canberra to which the spouse or nominee of a Senator or Member is entitled may be used by the staff of a Senator or Member.

Food Aid (Question No. 911)

Mr Lloyd:

asked the Minister for Foreign Affairs, upon notice:

  1. How many tonnes of skim milk powder have been given to Mozambique during 1 976 to date.
  2. How much skim milk powder has been provided as foreign aid during 1976-77 to date, and how much was provided during 1973-76.
  3. What quantities of (a) other dairy products and (b) horticultural products have been contributed during the same period.
Mr Peacock:
LP

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

  1. 1 ) The Government of Mozambique has been offered skim milk powder to the value of $1 million (including freight). This would pay for the purchase and freight of around 2200 tonnes of skim milk powder. This offer has not yet been taken up pending examination of Australian samples of skim milk powder by the Government of Mozambique. Action is being taken to supply samples.
  2. (a) The Government has approved expenditure of $2 million to cover the costs of purchase of skim milk powder and freight thereon to be given to developing countries (including Mozambique) for use mainly in specialised nutrition programs. This amount will pay for the purchase and freight of around 4200 tonnes of skim milk powder. Offers have now been made to several countries.

    1. During 1973-76 Australia provided 1330 tonnes of skim milk powder worth $646,630 to Vietnam and 103 tonnes of skim milk powder worth $30,000 (including freight) to Lebanon.
  3. (a) During 1973-76 Australia gave 320 tonnes of milk fat worth $306,740 and 3 tonnes of lactose worth $3,140 to Vietnam. Australia has given 9 tonnes of milk biscuits worth $20,000 (including freight) to the Philippines and 6 tonnes of milk biscuits worth $13,000 (including freight) to Indonesia during this financial year for use in natural disaster situations.

    1. During 1973-76 Australia gave 158 tonnes of dried fruit worth $93,800 and 120 tonnes of canned fruit worth $70,000 to the World Food Program.

Income Security Review Group (Question No. 916)

Mr Macphee:
LP

asked the Minister, representing the Minister for Social Security, upon notice:

  1. 1 ) When addressing the 6th National Conference of the Australian Institute of Directors on 1 April 1976, did the Minister say that she anticipated receiving an interim report from the Income Security Review Group during May 1976.
  2. If so, has the Minister received that interim report; if so, will its recommendations be made public
  3. When does the Minister expect to receive a final report, and when will those recommendations be made public
Mr Hunt:
NCP/NP

– The Minister for Social Security has provided the following answer to the honourable member’s question:

  1. 1 ) In the speech referred to I indicated that I anticipated an interim report would become available during May 1 976.
  2. The Income Security Review falls under the responsibility of the Prime Minister- the Chairman of the Review is drawn from the Department of the Prime Minister and Cabinet. The Income Security Review has presented a number of reports to the Prime Minister; it is not envisaged that these reports will be made public
  3. 1 understand that the Income Security Review does not envisage preparing a consolidated final report.

Sale of European Newts (Question No. 555)

Mr Bungey:
CANNING, WESTERN AUSTRALIA

asked the Minister for Health, upon notice:

  1. Has his attention been drawn to a report in the Adelaide Advertiser of 2 April 1976 that European newts were on sale in an Adelaide store.
  2. If so, are these newts indigenous to Australia.
  3. If they are not indigenous, (a) where are they generally found, (b) where have they been located in Australia, (c) how did they get to Australia, (d) what action has been taken by the Australian Government since their discovery and (e) what deficiencies exist in the quarantine regulations, or in the enforcement of these regulations, to permit the entry of these newts into Australia.
Mr Hunt:
NCP/NP

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

  1. Yes.
  2. I understand that newts are not indigenous to Australia.
  3. (a) Newts are widely distributed in many parts of the world including Europe, North and South America and Asia.

    1. Newts are widespread in Australia and available in many pet shops.
    2. It is not known how or when newts were first brought into Australia.
    3. None of which I am aware.
    4. There are no deficiencies in the existing quarantine legislation that would permit entry of newts into Australia. Importation of newts is prohibited under Quarantine Proclamation 76a unless the conditions and restrictions specified in that Proclamation are complied with. These requirements are rigorously enforced. Eradication of newts already in Australia falls outside the scope of powers exercisable under the Quarantine Act.

Importation of Animals (Question No. 750)

Mr Lloyd:

asked the Minister for Health, upon notice:

  1. 1 ) What is the present waiting time for the importation of (a) cats, (b) dogs and (c) horses into Australia.
  2. ) Is this delay being overcome or getting worse.
  3. What action has been taken, or is to be taken, to improve the situation.
  4. Does the quarantine charge for these animals cover the capital and running costs of these facilities; if not, why not
Mr Hunt:
NCP/NP

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

  1. (a) approximately 4 months

    1. approximately 6 months
    2. approximately 7 months.
  2. For cats and dogs, the waiting time is fairly stable. For horses, the waiting time is increasing.
  3. My Department has plans for the extension of quarantine facilities to meet anticipated demand.
  4. Quarantine charges do not seek to recover the capital costs of quarantine facilities. This has been a long-standing practice in Australia which is also followed by the U.S.A., Canada, New Zealand and the United Kingdom.

The Quarantine Act does not authorize the recovery of quarantine costs from specific importers which do not relate directly to the importation concerned.

Illegally Imported Fish (Question No. 798)

Mr Lloyd:

asked the Minister for Health, upon notice:

  1. What procedures are adopted to prevent illegally imported fish or their spawn from endangering our waterways or native fish.
  2. What procedures are followed when these fish cannot be destroyed because of court action.
Mr Hunt:
NCP/NP

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

  1. Quarantine legislation prohibits the importation of certain fish and semen and ova of fish except under prescribed conditions. Penalties are provided for contravention of the legislation. The question of the control of fish already in Australian waterways is a matter for the States concerned.
  2. There has been only one attempt in recent years to import such items in contravention of quarantine legislation. The prohibited material was destroyed.

Aquarium Fish (Question No. 859)

Mr Yates:

asked the Minister for Primary Industry, upon notice:

  1. 1 ) Will he supply a list of aquarium fish indicating those that (a) may be imported into Australia, (b) are prohibited imports, (c) are prohibited imports pending investigation and (d) are subject to review.
  2. Does the advisory committee on imports of live aquarium fish intend recommending, in its review, that the import of Carassius Auratus (common goldfish) be not approved; if so, what is the reason for this recommendation.
  3. Is the classification of Carassius Auratus likely to be changed.
  4. Can he say what percentage of all aquarium fish sold does goldfish comprise.
  5. 5 ) How many goldfish have been imported into Australia during the last 5 years.
Mr Sinclair:
NCP/NP

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

  1. 1 ) Although the control of the imports of live aquarium fish falls within the portfolio responsibilities of my colleagues, the Minister for Business and Consumer Affairs and the Minister for Health, my Department published, on behalf of the Commonwealth/State Fisheries Conference in 1963, the Alphabetical List of Exotic and Indigenous Aquarium Fishes. Copies are available from my Department.
  2. The Advisory Committee on Imports of Live Aquarium Fish proposed that the import of goldfish be banned and the Standing Committee on Fisheries has recommended this to the Australian Fisheries Council. The deliberations of sub-committees of the Australian Fisheries Council are confidential. The Council’s Resolutions are tabled annually in the Parliament. The Resolutions of its Sixth Meeting (October 1973) included a recommendation that the importation of goldfish be banned until establishment of adequate quarantine facilities. The Department of Health is currently considering the recommendation by the

Council and discussing ways of implementing quarantine facilities with the Advisory Committee.

  1. ) The taxonomic classification Carassius Auratus is most unlikely to be changed.
  2. Statistics of the Australian goldfish trade may be kept by those engaging in it but no official figures are kept, to my knowledge.
  3. The Bureau of Statistics does not provide figures which break down imports of live fish. Consequently, I am unable to provide the Honourable Member with the information he requires.

Economic Consultations (Question No. 863)

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

asked the Treasurer, upon notice:

Did the Government, in its recent economic consultations with the ACTU, reveal the ‘economic model’ on which the Department of the Treasury bases its prognosis of economic trends; if not, why not.

Mr Lynch:
LP

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

In the Government’s recent consultations with the ACTU and other peak trade union councils, both parties discussed the economic outlook. The Government’s view of the outlook was based on the informed judgment of Ministers.

The honourable member’s mention of ‘ … the “economic model” on which the Department of the Treasury bases its prognosis of economic trends . . . ‘ presumably refers to the joint Treasury- Australian Bureau of Statistics econometric model. The full details of that model are of course publicly documented. I should add that the Treasury’s ‘prognosis of economic trends ‘ is, however, based upon a great many factors, of which the econometric model in question is only one.

Australian Citizenship Requirements (Question No. 868)

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

asked the Minister for Immigration and Ethnic Affairs, upon notice:

How many people have been denied Australian citizenship under (a) paragraph 14 ( 1 ) (f) and (b) paragraph 14(1) (g) of the Australian Citizenship Act 1948-1973 in each of the last 3 years.

Mr MacKellar:
LP

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

Applicants for the grant of Australian citizenship who are found unable to meet the requirements of (a) 14(1) (f) and (b) 14 ( 1 ) (g) of the Australian Citizenship Act 1 948 do not have their applications rejected outright. They are informed that further consideration of their application has been deferred until such time as they feel they can satisfy the requirements.

In each of the last 3 calendar years, the numbers of applicants who have had their applications deferred under these provisions were:

Report on establishment of Institute of Development Studies (Question No. 871)

Mr Hurford:

asked the Minister for Foreign Affairs, upon notice:

  1. 1 ) Were Sir John Crawford and Dr Helen Hughes commissioned by the Australian Development Assistance Agency in mid 1975 to report on the feasibility of establishing an Institute of Development Studies in Australia and associated issues.
  2. Were any other people commissioned to prepare a report on these issues at the same time.
  3. Did Sir John Crawford and Dr Helen Hughes prepare (a) a joint report or (b) separate reports.
  4. What costs were involved in the preparation of the report or reports.
  5. When did Sir John Crawford and Dr Helen Hughes present their report or reports.
  6. Are the reports classified; if so, why, and when does the Government intend to release the reports.
  7. Does the Government intend to establish an Institute of Development Studies.
Mr Peacock:
LP

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

  1. 1 ) Dr Helen Hughes was commissioned by the Australian Development Assistance Agency (ADAA) to examine the general field of development studies in Australia and to recommend ways in which the Government and the Agency might further promote this field through several alternatives, including the possible establishment of an Institute of Development Studies. The report prepared on their own initiative by Sir John Crawford’s study committee was addressed to the specific issue of Australian assistance to strengthen research for development in developing countries.
  2. ) I am advised that no other persons were commissioned to prepare a report on these issues at the same time.
  3. Sir John Crawford and Dr Helen Hughes prepared separate reports.
  4. Preparation of the report by Dr Hughes cost approximately $7,000. The work involved in Sir John Crawford ‘s report was at no cost to ADAA.
  5. Dr Hughes presented her report to the Agency on 31 December 1975, the date of termination of her consultancy. Sir John Crawford submitted a copy of the report of his study committee to me on 20 February 1 976.
  6. Dr Hughes’ report has been available to interested persons on request since 30 July 1976. It is currently being printed and is shortly to be released to all Australian Universities and interested people interviewed by Dr Hughes during her consultancy.
  7. No decisions have been taken. Further consideration of the Government’s approach to development studies in Australia is being given taking account of prevailing financial constraints.

Former Portuguese Possessions (Question No. 880)

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

am asked the Minister for Foreign Affairs, upon notice:

  1. Can he say which countries have recognised the governments of former Portuguese possessions, and on what dates have they done so.
  2. How have members of the United Nations voted on applications by the former possessions to join the United Nations.
Mr Peacock:
LP

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

  1. 1 ) The recognition of a new government or State can be accomplished either expressly or by implication. Because of the differing practices used by States in recognising new governments or States it is not easy to say with any accuracy which States have recognised the present governments of former Portuguese possessions or the dates on which recognition took effect in each case. However, it is generally acknowledged that States which vote in favour of admission of States seeking membership of the United Nations recognise those States by implication of their vote. The voting record on applications by former Portuguese possessions to join the United Nations is provided in the second part of this answer.
  2. On 12 August 1974 the United Nations Security Council unanimously adopted Resolution 356(1974) recommending the admission of the Republic of Guinea-Bissau to membership of the United Nations and on 18 August 1975 it adopted similar resolutions, also unanimously, in respect of the Republic of Cape Verde (372 (1975)), the Democratic Republic of Sao Tome and Principe (373 (1975)), and the People’s Republic of Mozambique (374 (1975)).

On 17 September 1974 at its twenty-ninth Session the United Nations General Assembly adopted by acclamation Resolution 3205 (XXIX) admitting Guinea-Bissau to United Nations membership and, on 16 September 1975 at its thirtieth Session, adopted by acclamation Resolutions 3363 (XXX), 3364 (XXX) and 3365 (XXX) admitting Cape Verde, Sao Tome and Principe and Mozambique respectively to United Nations membership.

On 23 June 1976 the Security Council considered a draft resolution recommending the admission of the People’s Republic of Angola to membership of the United Nations. The voting was as follows:

In favour (13): Benin, France, Guyana, Italy, Japan, the Libyan Arab Republic, Pakistan, Panama, Romania, Sweden, the Union of Soviet Socialist Republics, the United Kingdom of Great Britain and Northern Ireland and the United Republic of Tanzania.

Against ( 1 ): United States of America.

Abstaining (0): None. (China did not participate in the vote.)

Because of the negative vote by a permanent member of the Council the resolution was not adopted.

Diplomatic Representation in Chile (Question No. 881)

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

am asked the Minister for Foreign Affairs, upon notice:

  1. Can he say which countries reduced the level of their diplomatic representation in Chile after the coup d’etat against President Allende.
  2. Which of these countries have now restored their diplomatic representation to the level at which it stood before the coup d’etat.
  3. When did they restore it?
Mr Peacock:
LP

– The answer to the honourable member’s question (based on all available information which may, however, not be complete), is as follows:

  1. Albania-(late 1973); Australia-(September 1973); Britain-(December 1975); Bulgaria-(September 1973); Cambodia- (January 1974)t; Colombia- (May 1974); Cuba- (September 1973)t; Czechoslovakia- (September 1973); Democratic Peoples Republic of Korea- (September 1973)t; Democratic Peoples Republic of VietNam (October 1973); German Democratic Republic(September 1973); Hungary-(September 1973); India(October 1974); Italy-(September 1973); Mexico(November 1974); Peoples Republic of the Congo-(late 1973); Poland-(October 1973); Portugal-(April 1975); Provisional Revolutionary Government of Viet-Nam- (October 1973); Sweden-(December 1973); U.S.S.R.(September 1973); Yugoslavia-(September 1973); ZambiaOctober 1973)*.

Note: * Countries which severed diplomatic relations with Chile t Countries with which Chile severed diplomatic relations t Ambassador delared persona non grata

  1. Australia; India; Colombia.
  2. March 1975 Colombia; July 1976 India; August 1976 Australia.

Recognition of Chilean Government (Question No. 885)

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

asked the Minister for Foreign Affairs, upon notice:

Does the Australian Government continue to recognise the anti-democratic military junta which overthrew the democratically elected Allende Government of Chile; if so, why?

Mr Peacock:
LP

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

The Australian Government recognised the present Government of Chile on 11 October 1973 through acknowledgement by the Australian Embassy in Santiago on that date of a Note from the Chilean Government. The Australian Government continues to recognise the Government of Chile and has seen no reason to alter the practice of the previous Government in this respect.

Gifts of Money to the Government of Indonesia (Question No. 886) Mr Clyde Cameron asked the Minister for Foreign Affairs, upon notice:

  1. What were the dates, details and purposes of all gifts of money made by the Australian Government to the Government of Indonesia during the last ten years.
  2. Did Cabinet approve these gifts; if not, why not.
  3. Was Treasury consulted before it was decided to make these gifts; if not, why not.
Mr Peacock:
LP

– The answer to the honourable member’s question is as follows: 1. (a) On 21 April 1970 the Department of External Affairs announced the gift of $5,000 towards the repair and rehabilitation costs of the Bogor Botanic Gardens in West

Java which had been devastated by a freak hurricane earlier in the year.

  1. On 20 February 1975 the then Minister for Foreign Affairs, Senator Willesee, announced a gift of $10,000 to assist in housing the large number of people left homeless following a series of earth tremors in the Sukabumi area of West Java on 9 February 1 975.
  2. On 16 July 1976, 1 announced a cash contribution of $35,000 for the relief of the victims of the recent earthquakes in Irian Java and Bali.

    1. No. Cabinet decisions were not required.
    2. With respect to gifts described in paragraphs 1 (a) and 1 (b)- No. Treasury authorisation for minor aid expenditure within the budget allocation was not required.

With respect to 1 (c)- Yes. Because of the size of this gift, the Department of the Prime Minister and Cabinet and the Treasury were consulted before I made the announcement.

Home Savings Grant Scheme (Question No. 887)

Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP

asked the Treasurer, upon notice:

If it is the intention of the proposed Home Savings Grant Scheme (a) to encourage young couples to save for a home and (b) to provide a stimulus for the home-building industry, would these objectives be better served by utilising available funds for the purpose of providing young couples with interest free grants designed to bridge the deposit gap.

Mr Lynch:
LP

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

The new Home Savings Grant Scheme, for which legislation will be introduced during this session of Parliament, will in fact provide for the payment of interest free grants designed to help bridge the deposit gap faced by young couples saving for their first home. Individual grants of up to $2,000 on the basis of $ 1 for each $3 saved are proposed, the f rants will be free of tax. The new Home Savings Grants Scheme will provide for grants to all persons whether married or single who are Australian citizens or have the right to permanent residence in Australia, and who are acquiring their first home. There will be no limitation on the age or marital status of applicants nor on the value of the dwellings involved.

Batman Electorate: Schoolchildren (Question No. 906)

Mr Garrick:

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

  1. 1 ) How many schoolchildren are there in the Electoral Division of Batman.
  2. How many (a) primary and (b) secondary school children are there in the Division in (i) State and (ii) independent schools.
  3. How many (a) first and (b) second generation migrant school children are there in the Division.
Mr Viner:
LP

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

I draw the honourable member’s attention to my answer to Question No. 720 (Hansard, 2 June 1976, page 2913).

Strategic Assessment (Question No. 917)

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

asked the Prime Minister, upon notice:

Is it a fact that he rejected a Strategic Assessment Study signed by certain departmental heads and the Chiefs of Staff; if so why.

Mr Malcolm Fraser:
LP

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

The Government has requested the re-assessment of Australia’s strategic interests to include a fuller examination of the interplay of globally important trends and factors affecting Australia.

Full Employment Budget Outcome (Question No. 920)

Mr Hurford:

asked the Treasurer, upon notice:

  1. What was the full employment Budget outcome in 1975-76.
  2. What is the anticipated full employment Budget outcome in 1976-77.
Mr Lynch:
LP

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

  1. 1 ) and (2) Like most other countries, Australia does not publish full employment Budget outcomes. This was the case under the previous Government also.

The concept of full employment Budget outcomes was of very limited value as an analytical tool even in the days of low inflation rates in which it was developed; it is of even less relevance in these days of double-digit inflation.

The effect of the economy on the Budget- as well as the effect of the Budget on the economy- was taken fully into account in framing the 1976-77 Budget The reasons why that Budget is appropriate in present circumstances, and its implications for the economy over the next twelve months or so, are outlined- in greater detail than ever before- in the Budget Speech and the Statements attached to that Speech.

UNCTAD IV Report (Question No. 921)

Mr Hurford:

asked the Minister for Overseas Trade, upon notice:

Does the Government intend to publish a report by the Australian delegation to UNCTAD IV; if so, when.

Mr Anthony:
NCP/NP

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

A report on UNCTAD IV has been prepared by the UNCTAD Secretariat in liaison with delegations to the Conference. It is not the Government’s intention to publish a separate Australian delegation report on the Conference.

A limited number of advance copies of the UNCTAD report have been received and I have arranged for a copy to be placed in the Parliamentary Library, for the information of members.

Relations with South Africa (Question No. 922)

Mr Garrick:

asked the Minister for Foreign Affairs, upon notice:

  1. 1 ) Does the Government regard the suppression and brutal riot control seen recently in South Africa as cause for the breaking of diplomatic ties with that country.
  2. Is the Government concerned that continued trade, diplomatic recognition and sporting and cultural ties, may serve to bolster the white Government and to jeopardise racial justice and equality.
Mr Peacock:
LP

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

  1. The Government deplores the violence and killing which has accompanied the suppression of civil disturbances in South Africa. It regards the present troubles in South Africa as the inevitable result of policies based on the inequality embodied in apartheid. But it does not regard the maintenance of diplomatic relations with other countries as dependent on approval of their political or social systems.
  2. In the case of South Africa the Government does not believe that by unilaterally banning trade with South Africa, breaking off diplomatic relations or seeking to impose a total boycott on sporting ties, any useful purpose would be served or that such measures would in isolation either effect the situation in South Africa or persuade the Government of South Africa to change its policies. On sporting contacts, Australia considers its main objective to be to promote change in South Africa’s policy in this area. The Government believes this objective can best be achieved through limited contact subject to practical conditions, including especially the test of multi-racial selection for team sports.

Museums Inquiry (Question No. 937)

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

am asked the Prime Minister, upon notice:

  1. Have consultations taken place with any State Government on the recommendations of the Committee of Inquiry on Museums and National Collections which was appointed by the Special Minister of State on 10 April 1974 and whose report was tabled by that Minister on 5 November 1975.
  2. If so, what have been the date, form and outcome of the consultations.
Mr Malcolm Fraser:
LP

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

  1. 1 ) and (2 ) Yes. The Report of the Committee of Inquiry on Museums and National Collections was sent to all State Governments on 6 January 1976 with a request that it be referred to appropriate State authorities for comment and advice.

On 3 June 1 976 the States were asked, as well, to nominate officers in those authorities with whom the Commonwealth officials studying the Report may consult.

Only New South Wales remains to furnish advice on the Report, and nominate its official contact. Consultations with States will proceed as soon as the New South Wales position is known.

Public Libraries Inquiry (Question No. 938)

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

am asked the Prime Minister, upon notice:

  1. When were State Governments sent copies of the Report of the Committee of Inquiry into Public Libraries which was appointed by his predecessor on 1 1 March 1975 and which presented its report on 27 February 1976.
  2. What have been the date, form and outcome of the consultations which, as he told me on 4 June 1 976 (Hansard, Sage 3109), the Australian Government would continue to h ave with the States on the implications of the report.
Mr Malcolm Fraser:
LP

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

  1. The Report of the Committee of Inquiry into Public Libraries was tabled in Parliament on 1 April 1976. It was not available in printed form until mid-May and it was sent to State Premiers under cover of a letter from me on 3 June.
  2. In my letter of 3 June, Premiers were asked to forward any comments their Governments might wish to make on the Report. The States were asked, as well, to nominate officers in those authorities with whom Commonwealth officials studying the Report may consult

Only Tasmania has furnished advice on the Report but all States except New South Wales have nominated official contacts. Consultations will proceed as soon as a nomination is received from New South Wales.

Means Test on Pensioners’ Fringe Benefits (Question No. 944)

Mr Macphee:
LP

asked the Minister representing the Minister for Social Security, upon notice:

  1. Did the Minister state in answer to question No. 613 that the means test on fringe benefits for pensioners had not been reviewed since 1969 but that it would be reviewed at the appropriate time.
  2. Was this subject one which was being considered by the Income Security Review Group, and was it the subject of a recommendation in the interim report of that group.
  3. Is the Minister now in a position to say what time the Government believes to be appropriate to review the means test on fringe benefits for pensioners.
Mr Hunt:
NCP/NP

– The Minister for Social Security has provided the following answer to the honourable member’s question:

  1. Yes.
  2. The Income Security Review falls within the responsibility of the Prime Minister- the Chairman of the Review is from the Department of the Prime Minister and Cabinet. The Review is required by its Terms of Reference to examine The relative merits of providing benefits through cash payments, services or a combination thereof.

I understand that the Review is currently examining the whole question of cash payments compared to ‘in kind’ benefits, and that this examination will include consideration of the present means test on fringe benefits.

  1. In the meantime, consistent with abolition of the property test for pensions, a corresponding change is proposed to the eligibility test applying to fringe benefits.

Real Disposable Income (Question No. 947)

Mr Garrick:

asked the Treasurer, upon notice:

  1. 1 ) Have the two most recent Arbitration Court decisions eaten into real wages, and will the introduction of expensive health care further erode real disposable income.
  2. If so, how does he expect the consumer component of aggregate demand to play a role in economic recovery.
Mr Lynch:
LP

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

  1. 1 ) In its two most recent wage indexation decisions the Australian Conciliation and Arbitration Commission has awarded wage increases which, for the vast majority of wage earners, amounted to less than full adjustment of wages for past movements in consumer prices.

This is the course the Government has been urging before the Conciliation and Arbitration Commission, being firmly of the view that the sooner wages and profits return to a more normal relativity the sooner will job prospects improve and unemployment begin to fall.

The new arrangements for the financing of health services recognise that such services have to be paid for. However, so far as real disposable income is concerned, any judgments regarding the effects of the new health service financing arrangements would also need to take into account the introduction from 1 July last of full personal tax indexation and significant improvements in the manner of assisting families through family allowances.

  1. As consumers see that the high rate of inflation is declining and job prospects are improving they can be expected to step up their spending and cut back on their current high levels of saving. As I said in my Budget Speech of 1 7 August:

A too stubborn adherence to the existing level of real wages- for example through full wage indexation- would continue to hold inflation high, depress consumer and business spending, hold back the creation of new jobs and prevent unemployment from falling. ‘

Television and Radio Stations: Metric Usage (Question No. 958)

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

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

Will the Minister communicate with commercial television and radio stations requesting their cooperation in bringing to the attention of that diminishing band of commercial announcers who still mispronounce the word ‘ kilometre ‘ that, if they practise saying the words ‘millimetre’, ‘centimetre’ and kilometre ‘ before going to air, they may find it easier to pronounce correctly the word ‘kilometre ‘?

Mr Adermann:
Minister Assisting the Minister for National Resources · FISHER, QUEENSLAND · NCP/NP

– The Minister for Science has provided the following answer to the honourable member’s question:

I thank the honourable member for his interest in this matter and for his thoughtful and helpful suggestion. As the honourable member is aware the responsibility for establishing and maintaining correct metric usage rests with the Metric Conversion Board. Accordingly, rather than communicate personally to those who consistently mispronounce kilometre and other metric terms, I have passed his suggestion to the Board for implementation if it considers that appropriate.

Recognising the role which the media has to play in this matter the Board has, from the outset, maintained close contact with the media and has issued and distributed widely a pamphlet ‘Guide to Metric Reporting’. It has also cooperated closely with the Standing Committee on Spoken English of the ABC to develop and maintain good pronounciation of metric terms. When errors are detected the Board ‘s officers contact the individuals concerned and their suggestions are generally received favourably.

In view of the progress made towards complete conversion and the current widespread use of metric terms, the Board is planning a further approach to all sections of the media to promote correct metric usage.

Cite as: Australia, House of Representatives, Debates, 7 September 1976, viewed 22 October 2017, <http://historichansard.net/hofreps/1976/19760907_reps_30_hor100/>.