House of Representatives
26 April 1977

30th Parliament · 2nd Session

  1. House of Representatives
  2. 30th Parliament
  3. 1977

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

page 1193

PETITIONS

The Clerk:

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

Royal Commission on Petroleum

The petition of certain members of the Service Station Association of New South Wales Limited, and certain members of the motoring public of N.S.W. respectfully showeth:

That the Federal Government give every consideration to implementing the findings of the Royal Commission on Petroleum.

Your petitioners therefore humbly pray that your honourable House will take action to ensure that the needs of the motoring public and the retail petroleum industry are given every consideration.

And your petitioners as in duty bound will ever pray, by Mr Sinclair, Mr Bradfield and Mr Cadman.

Petitions received.

Pensions

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

That the delays between the announcements of each quarterly movement in the Consumer Price Index and their application as a percentage increase in age and invalid pensions is excessive, unnecessary, discriminatory and a cause of economic distress.

That proposals to amend the Consumer Price Index by eliminating particular items from the Index could adversely affect the value of future increases in aged and invalid pensions and thus be a cause of additional economic hardship to pensioners.

The foregoing facts impel your petitioners to ask the Australian Government as a matter of urgency to:

  1. Require each quarterly percentage increase in the Consumer Price Index to be applied to age and invalid and similar pensions as from the pension pay day nearest following the date of announcement of the CPI movements. 2, Give an open assurance to all aged and invalid pensioners that any revision of the items comprising the Consumer Price Index will in no way result in reductions in the value of any future entitlements to pensioners.

And your petitioners as in duty bound will ever pray. by Mr Lynch, Mr Bradfield and Mr Ian Robinson.

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 ABC programs.
  4. Develop methods for publicly funding the Commission which will prevent the granting or withholding of funds being used as a method of diminishing its independence.
  5. Ensure that any general inquiries into broadcasting in Australia which may seem desirable from time to time shall be conducted publicly and that strong representation of the public shall be included within the body conducting the inquiry.

And your petitioners as in duty bound will ever pray. by Mr Les Johnson, Mr MacKellar and Mr Scholes.

Petitions received.

Whaling

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 due to the new information of Whale communication, behaviour and intelligence, and to depleted state of most of the great Whale stocks and the uncertainty associated with Whale population estimates, that commercial whaling is no longer acceptable to the vast majority of Australians.

It is urged that immediate steps be taken to end this activity.

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

Petitions received.

Health Centres in the Australian Capital Territory

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

That we are deeply concerned at the threat to the Health Centre Program in the Australian Capital Territory posed by a lack of funding and the decision not to replace salaried medical practitioners who leave the Health Service for whatever reason. We believe that the Government should not allow any diminution in the concept of health care in the A.C.T. as originally proposed. We believe that the Australian Capital Territory’s unique health care system should not be destroyed by either deliberate political action or by a process of neglect and starvation for funds. We believe that the Government should advise people of their role in the management of Health Centres and take steps to see that community awareness of the originalprogram be again promulgated throughout the Australian Capital Territory.

Your petitioners therefore humbly pray that the Australian Government as a matter of urgency, bring the level of staffing at Kippax Health Centre, Holt, Australian Capital Territory back to its original three salaried medical practitioners and those of other Health Centres in the Australian Capital Territory back to their original planned numbers.

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

Petition received.

Aid for Handicapped Persons

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 failure to obtain sufficient funds by government grants and from fund raising activities they have had to force Koomarri to retrench staff. Leaving the handicapped people in an even more disadvantaged position.

Your petitioners therefore humbly pray that the Government do all possible to obtain greater support for the handicapped.

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

Petition received.

Australian Roads

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

  1. Australia’s extensive roads system is a national asset wasting because of inadequate Federal and State funding.
  2. Commonwealth Government funding of roads has fallen over the last six years from 2.9 per cent of all Commonwealth outlays to 2.3 per cent.

Your petitioners therefore humbly pray that the House of Representatives in Parliament assembled, should ensure:

That the Commonwealth Government’s long-term policy should be to provide SO per cent of all funding for Australia’s roads.

That at a minimum the Commonwealth Government adopts the recommendations by the Australian Council of Local Government Associations for the allocation of $5,903 million of Commonwealth, State and Local Government funds to roads over the five years ending 1980-81, of which the Commonwealth share would be 41 per cent as recommended by the Bureau of Roads. by Mr Giles.

Petition received.

Airline Services to King Island

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

  1. No decision has been made by the Commonwealth Government on the recommended assistance for air travel from King Island made by Mr Nimmo in his report.
  2. Air services are the only means of transport to and from the island.
  3. People on the island are frequently required to leave the island for essential purposes.

We therefore call upon the Government to implement the recommendations of assistance for air passengers, made in Mr Nimmo ‘s report.

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

Petition received.

National Highways and Public Roads

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

  1. Australia’s extensive roads system is a national asset wasting because of inadequate funding.
  2. Commonwealth Government funding of roads has fallen over the last six years from 2.9 per cent of all Commonwealth outlays to 2.3 per cent.

Your petitioners therefore humbly pray that the House of Representatives in Parliament assembled, should ensure:

That the Commonwealth Government should totally finance national highways and half the cost of constructing and maintaining all other public roads.

That since current road funding arrangements have seen a deterioration in road assets, this backlog in construction and maintenance needs to be reduced by the Commonwealth Government undertaking to make a larger financial contribution. byMrHolten.

Petition received.

Conciliation and Arbitration Amendment Bill 1977

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

That a Bill for and Act, to amend the Conciliation and Arbitration Act 1904 and for other purposes is unwarranted, vicious and hypocritical and certain to produce industrial disputes.

That the proposed Industrial Relations Bureau will hinder rather than help settlements of industrial disputes.

That as there is ample provision within existing legislation to protect industrial unionists against any malpractice in union administration, the bill clearly shows that the Government does not want consultation and co-operation in industrial affairs but wants confrontation.

The foregoing facts impel your petitioners to ask the Commonwealth Government as a matter of urgency to immediately withdraw the Bill.

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

Petition received.

Taxation

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

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

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

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

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

Petition received.

Education

To the Honourable the Speaker and Members of the House of Representatives assembled. Your petitioners believe that all people have the right to education, irrespective of class, age, sex, sexuality and ethnic background, and that it is the responsibility of Government to ensure that sufficient funds are allocated to protect that right.

Your petitioners therefore humbly pray:

  1. That there should be substantial increases in education expenditure to make education accessible and free to all people who want it.
  2. That in view of the substandard living conditions forced on many tertiary students as a consequence of a totally inadequate student assistance scheme, there is an urgent need for an immediate increase in the present level of the Tertiary Education Assistance Scheme to 120 per cent of the adjusted Henderson poverty line; and, further, that the TEAS be indexed quarterly to movements in the Consumer Price Index.
  3. That all students should receive a living wage, starting at the minimum wage.
  4. That the needs-based grants scheme be in no way jeopardised by any other program of student assistance, including supplementary or comprehensive loans schemes.

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

Petition 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 objection to the Metric system and request the Government to restore the Imperial system.

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

Petition received.

page 1195

NOTICES OF MOTION

Incomes-Prices Freeze

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

-I give notice that at the next sitting I shall move:

That this House notes that the agreement for a halt in incomes and prices, even for 3 months, must, to achieve whatever success is available to it, acknowledge the Federal nature of the Australian industrial system and that such an agreement involving the Commonwealth and the States was signed on 13 April 1977; however, having regard to the very significant constitutional and industrial powers that lie with States whereby some State commissions adjudicate awards for SO per cent of relevant workers, this House notes:

1 ) The complete absence of any attempt by the New South Wales and South Australian signatories to intervene and so utilise the industrial responsibilities available to them within the jurisdiction of the industrial commission of New South Wales and South Australia;

The complete absence of any attempt by the Tasmanian signatory to utilise the powers available to the Tasmanian Parliament whether or not the Wage Board ‘s procedure was to be utilised;

That such intervention in each case was available in respect of wages according to their own interpretation of the agreement of 13 April under the Industrial Arbitration Act of New South Wales and the industrial code of South Australia;

That the State industrial commissions have powers to call a conference of those under State award for a wages or incomes pause without compulsion;

That the stated reasons of Premiers Wran of New South Wales and Dunstan of South Australia for reneging on their promises of 13 April have been the alleged compulsion involved in a joint approach to the Federal Arbitration Commission;

That conciliation initiatives are pursued by State industrial commissions very commonly on the initiatives of State governments or Ministers. Hence any decision by the States of New South Wales, South Australia and Tasmania to abandon their undertaking of 13 April because of alleged compulsion is totally without foundation and that such reckless attitudes are clearly obvious because of their total and complete disinterest in pursuing essential complementary policies through the operations of their own State industrial jurisidictions. And therefore this House regrets that the Premiers of New South Wales, South Australia and Tasmania broke their word and in doing so failed to abide by their essential constitutional and industrial responsibilities.

East Timor

Mr NEIL:
St George

-I give notice that on the next day of sitting I shall move:

  1. That the House notes reports of statements by the Indonesian Foreign Minister, Mr Malik, that the Leader of the Opposition was informed by President Suharto of the proposed Indonesian invasion of East Timor and that the Leader of the Opposition stated invasion should be completed quickly.
  2. That the reports of the statements by Mr Malik make it clear that the discussion between the Leader of the Opposition and President Suharto related to a military invasion and not to a take-over by peaceful means.
  3. That the Canberra Times recently reported that a document setting out Indonesian plans for the invasion was provided to the former Government on 25 August 1 975.
  4. That the Leader of the Opposition has neither issued a public detailed denial of the allegations nor admitted to having misled the House and the Parliament nor admitted to shameful guilt in regard to the fate of the Timorese people.
  5. The House therefore resolves that the Leader of the Opposition has misled the House and calls upon him to resign his seat.
Mr Scholes:

– I rise to order. This notice of motion would normally go on the notice paper. It contains substantial allegations against the Leader of the Opposition which I would suggest should be contained in a substantive motion which should not be allowed to lie on the notice paper without debate. I suggest in my point of order that charges against a member of this House of such a substantive nature and calling for his resignation from the Parliament ought not to be allowed to stay on the notice paper and ought not to be listed under general business where they are highly unlikely to be debated.

Mr SPEAKER:

– I rule that the notice of motion is in order. It is a notice for a substantive motion. I have no control over whether it will be debated. That is a matter for the managers of the House.

Australia Day

Mr YATES:
Holt

-I give notice that on the next day of sitting I shall move:

That this House considers that in the interests of the nation Australia Day shall as from 1978, be celebrated on Anzac Day of the same year, and that a private members’ Bill be introduced to enable this to take place.

page 1196

QUESTION

QUESTIONS WITHOUT NOTICE

page 1196

QUESTION

FEDERALISM POLICY

Mr LIONEL BOWEN:
KINGSFORD-SMITH, NEW SOUTH WALES

-My question which I address to the Prime Minister relates to the federalism policy whereby a fixed percentage of general revenue assistance will be given to the States but there is no guarantee to maintain the ratio for the balance of the payments the States normally get. I refer to payments such as those relating to capital funds and specific purpose grants. Bearing in mind that the ratio in 1975-76 was of the nature of three to eight- in other words the general revenue assistance was $3 billion and the total expenditure was $8 billionwill the Prime Minister give an assurance that the ratio will be maintained in the future so that irrespective of what amount is given by way of general revenue assistance the same ratio is also given for general purpose capital funds and specific purpose repayments thereby avoiding the necessity for the States to levy their own income tax?

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

– I certainly could not give the honourable gentleman that assurance because under the tax reimbursement arrangements, whereby the States receive 33.6 per cent of Commonwealth income tax revenue, the payments to the States have grown and will continue to grow much more rapidly than they did under the previous arrangements. Therefore, it would be ludicrous to suggest that the proportions the honourable gentleman has mentioned should remain in the same ratios.

page 1196

QUESTION

SOLICITING OF PARTY FUNDS

Mr JARMAN:
DEAKIN, VICTORIA

-I direct my question to the Minister for Primary Industry in his capacity as Leader of the House. I ask: Has the Minister’s attention been drawn to a recent campaign by a political party to solicit funds from industry? If this is so, is it correct, as has been claimed, that the campaign contains certain misrepresentations?

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

– It is true that there does seem to have been a distribution of correspondence soliciting funds. One letter that was handed to me is under the hand of the Honourable E. G. Whitlam, Q.C., M.P., with a signature that is purported to be that of Gough Whitlam. The opening sentence states:

I hope you will have time to look through this small booklet containing extracts from recent speeches I have made.

That, of course, is in a manner akin to a number of statements made by some very distinguished leaders of countries around the world. There is the red book that we all know of. I do not know whether the cover of this booklet was in any way mentioned but it is certainly of interest that on the same day as I received the letter, on the front page of The Australian of Thursday, 21 April 1977, an article contributed by United Press in Hong Kong stated that a front page leading article in the Peking People’s Daily, speaking of the economic reconstruction program, stated:

Let us be firm in applying the principle of socialist sharing: anyone who does not work will not be fed and to each person according to his capacity and his labour.

I do not know whether that particular statement is attributable to the Leader of the Opposition or whether it is included in his speeches. In the letter are a number of other matters that will be of interest to honourable gentlemen.

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

– Will you incorporate it?

Mr SINCLAIR:

-I thank the honourable gentleman for his question. The author states:

My Party is well aware of the anxieties of the business community and sympathetic to them.

I am sure that statement will be of very considerable interest to those honourable members who have heard the pronouncements of the Leader of the Opposition both here and on other occasions. He also said:

Labor has always seen the need for a healthy private sector working in harmony with democratic governments and an enlightened trade union movement.

That statement seems to be short in several aspects as far as the Labor Party is concerned. A healthy private sector certainly did not flow from the term of office of the Labor Party. Working in harmony certainly was not one of the characteristics of the Labor Ministry and an enlightened attitude by the trade union movement does not seem to be the attitude that it is demonstrating in its complete failure to accept, in principle, the approach made by the heads of government agreement regarding a price and wage freeze. The letter continues- I am glad to see the honourable member for Oxley come into the House because it might perhaps be of interest to him:

Political events happen so rapidly these days that it is more and more important for parties to adapt to change and be prepared for electoral battle.

I do not know whether that is directed towards any forthcoming events within the Labor Party. The letter also says:

You need to know our thinking. We need to know yours.

I only wish the honourable gentleman on occasions would let us know his thinking. It certainly seems to be muddled and confused and quite incomprehensible. In accordance with the request of the honourable gentleman I table the letter.

Mr SPEAKER:

– Order! The right honourable gentleman will resume his seat. The request from the Leader of the Opposition was for incorporation in Hansard. Is leave granted?

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

-And the documents?

Mr SPEAKER:

– Leave is granted. The letter will be incorporated in Hansard.

The document read as follows-

Hon. E. G. Whitlam, Q.C., M.P. Parliament House Canberra, A.C.T. 2600

I hope you will have time to look through this small booklet containing extracts from recent speeches I have made. My party has brought them together in the hope that they will contribute to a useful discussion of the problems facing Australia and Labor’s attitudes to them.

They are mainly concerned with economic matters and would therefore be of special interest to businessmen such as yourself. I think you will find that, whatever our opponents or the press may say my party is well aware of the anxieties of the business community and sympathetic to them. Labor has always seen the need for a healthy private sector working in harmony with democratic governments and an enlightened trade union movement. It is now obvious that the present Government has failed to consolidate the tentative signs of economic recovery apparent in late 1975 and early 1976. The ideas put forward in these speeches offer a new approach to our short-term problems and the basis of an alternative economic strategy in the longer term. It is by no means an exhaustive treatment but provides some insight into Labor’s thinking at a time when the Fraser Government seems increasingly bewildered and powerless, and the return of a Labor Government increasingly likely. (I should stress that these speeches were made before the devaluation of 28 November, but their underlying message is still valid.)

Political events happen so rapidly these days that it is more and more important for parties to adapt to change and be prepared for the electoral battle. You need to know our thinking; we need to know yours. Labor also needs funds to enable it to play an effective part in a democratic two-party system, at election time and between elections. A full-time fund-raising consultant, Mr Charles Wright, has been appointed by the A.L.P. and he would welcome an opportunity to discuss these matters with you. I hope you will be able to see him at a mutually convenient time.

Yours sincerely, GOUGH WHITLAM

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

-And the enclosed document?

Mr SPEAKER:

– I understood that what was being requested for incorporation in Hansard was the letter.

Mr Scholes:

- Mr Speaker, on a point of order; the Leader of the House has purported to quote- I think quite improperly at question time- extracts from a document distributed, as he claimed, by the Leader of the Opposition. He has purported to quote from that document. We are seeking that that document be incorporated in Hansard.

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

-And the booklet.

Mr Scholes:

– The booklet is the document.

Mr SINCLAIR:
NCP/NP

-Unfortunately the honourable gentleman did not give me a copy of his booklet or I would have been happy to see whether the cover was, in fact, red. But I request that the 2 papers from which I quoted should be incorported in Hansard in accordance with the request of the Leader of the Opposition.

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

– My request was that the letter I wrote and the booklet referred to in it should be incorporated.

Mr SPEAKER:

-The booklet is not in the chamber. A letter and what appears to me from this distance to be an extract from a newspaper are. The right honourable gentleman is responding to the request for the incorporation of the letter. That has been agreed to. The right honourable gentleman has now asked for leave to incorporate the newspaper cutting. Is leave granted?

MrE.G.Whitlam-No.

Mr SPEAKER:

-Leave is not granted.

Mr Scholes:

- Mr Speaker, on a point of order; are we to understand that the Minister has purported to inform the House of details of a booklet which he not only does not have but also has not read, and he is relying on second-hand reports and therefore inadequate information?

Mr SPEAKER:

-Order! The honourable member for Corio has no warrant to make the assumption that the booklet has not been read. The only fact that I have is that the document is not in the chamber and cannot therefore be incorporated. I call on questions without notice.

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

- Mr Speaker, the booklet is now in the chamber. I ask that it also be incorporated in Hansard.

Mr SPEAKER:

– The Leader of the Opposition asks for incorporation of the booklet in Hansard. Is leave granted?

Government supporters- No.

Mr SPEAKER:

– Leave is not granted. I call the honourable member for Banks.

page 1198

QUESTION

PRICES AND WAGES FREEZE

Mr MARTIN:
BANKS, NEW SOUTH WALES

– My question is directed to the Prime Minister and is supplementary to a question asked of him by the honourable member for Blaxland on 20 April 1977. I ask whether the Prime Minister was correctly reported in the issue of Country Life newspaper of 25-3 1 August 1976 in which it was stated that when he was asked by a representative of that newspaper the question:

Would he like the powers to negotiate price and wage freezes with employers and unionists? he replied:

No country which has adopted hard, fixed controls of that kind have found them successful. What has tended to happen under compulsion is that pressures get built up and explode when the freeze lifts.

Does the Prime Minister now retract that statement? Is he only playing politics on this whole issue?

Mr SPEAKER:

– Order! The honourable member will not phrase his question in those terms. He may ask for information but not attribute motives. The honourable member will resume his question seeking information.

Mr MARTIN:

– The information I seek, Mr Speaker, is: Does the Prime Minister retract what he is reported to have said in that newspaper? Does he now retract that information or is he still playing politics and seeking to blame the unions?

Mr MALCOLM FRASER:
WANNON, VICTORIA · LP

– I can only suggest that the honourable gentleman try to bring his reading up to date. That question, or one similar to it, has been asked before in this House. In reply I have indicated that a voluntary wageprice pause is of a quite different character from something imposed by governments with compulsory powers. Of course it was the previous administration that sought compulsory powers in relation to these matters. The pursuit in these areas is still on a voluntary basis and with support throughout the community-which is present; which is evident- that pause can still work despite the opposition of some gentlemen in the Opposition and despite the opposition of the Australian Council of Trade Unions.

page 1198

QUESTION

IMMIGRATION QUOTA

Mr SAINSBURY:
EDEN-MONARO, NEW SOUTH WALES

-Is the Minister for Immigration and Ethnic Affairs aware that a large number of migrants to Australia of recent years have brothers, sisters and children over 18 years of age who wish to migrate to Australia, who would have guaranteed jobs in Australia, who are industrious and energetic but who are precluded from entry because of our present extremely tight migration quota? Will the Minister be considering having a major increase in the migration quota in the coming year in areas such as I described?

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

– I am aware that a number of people in Australia wish to sponsor their relatives from overseas to join them in Australia and who make out the case that they have job opportunities for these people to come to. In many cases they make out very persuasive arguments of this nature in favour of the reunion of their families. However, if the Government were to extend the criteria in relation to family reunion, for argument’s sake say particularly in respect of brothers and sisters, the numbers of people who would instantly become eligible to come to Australia would expand very rapidly to the extent that a major proportion of the annual intake would be covered by people in the category that I have just mentioned. When we have an economic situation, which unfortunately has resulted in a number of people being out of work, one has to look very carefully at employment guarantees because in many cases employment guarantees mean that that job is not open to a person already resident in Australia. When it can be clearly demonstrated that the job would not be open to a person normally resident in Australia, the application is looked at very closely indeed and in some cases the request for entry to Australia is acceded to.

There no doubt that the best way in which we can bring about the reunion of families, particularly the brothers and sisters of people already in Australia is to bring about a swift resolution of the economic climate in Australia. The intention of this Government is to bring about a resurgence in the economic climate in Australia so that more jobs will be available and so that we can do many things, including re-uniting brothers and sisters with their relatives already in Australia. With respect to the total immigration intake, as I have said before in this House, I am not at liberty at this stage to say what the Government’s deliberations will be, but I shall keep the honourable member’s comments in mind.

page 1199

QUESTION

CONZINC RIO TINTO OF AUSTRALIA LIMITED

Mr UREN:
REID, NEW SOUTH WALES

– I direct my question to the Treasurer. I refer the Treasurer to the manipulation by Conzinc Rio Tinto of Australia Limited of its interest in Queensland Alumina Limited. Is the Treasurer aware that CRA sells its share of Queensland Alumina’s output at a loss, much of it to its United Kingdom parent company, the Rio Tinto Zinc Corporation, while continuing to make a profit through Queensland Alumina’s investment allowance? Further, I ask the Treasurer whether the Federal Government will take action to require Australian companies to charge their customers prices more in accord with world parity prices.

Mr LYNCH:
Treasurer · FLINDERS, VICTORIA · LP

– The honourable gentleman is very much aware that these are matters which come before the scrutiny of the Foreign Investment Review Board and are then subject to recommendation by the Treasurer. The honourable gentleman is aware also that individual cases ought not be the subject of dialogue in this chamber at question time. If the honourable gentleman is putting to me some suggestion which he believes ought to be brought before the Foreign Investment Review Board, he ought to make those representations and they will in fact be brought before the Foreign Investment Review Board.

page 1199

QUESTION

INDIAN GOVERNMENT

Mr McLEAN:
PERTH, WESTERN AUSTRALIA

– My question, which is directed to the Minister for Foreign Affairs, relates to the recent general election in India. I ask the Minister: With the defeat of the ruling Congress Party at the recent general election in India, does the Government anticipate an improved relationship with that country? Does the Minister think that India’s oft-stated policy of non-alignment will become in practice in the future more nonaligned than it has been in the past? Has the new Indian Government expressed any views regarding its proposed relationship with the Soviet Union and its own attitude towards the future development of defence installations in the Indian Ocean? Has the new Prime Minister of India foreshadowed a change in his country’s attitude towards the proliferation and testing of nuclear weapons? Finally, has the Australian Government as yet had an opportunity to express its views on these and other matters to the new Government of India?

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

-The impressive demonstration in the recent election in India of that country’s firm commitment to democracy has been widely and favourably commented upon in

Australia. That has been conveyed to the Indian Government in messages from the Prime Minister to the Indian Prime Minister and from me to the Indian Foreign Minister. Our relations with India have always been strong. We have regular officials’ talks and there are a number of cultural arrangements and agreements- the science and technology co-operative agreement, for example- between the 2 governments. I can recall the new Indian Prime Minister stating in an address to the Non-Aligned Bureau earlier this month that India would remain non-aligned ‘in the real sense of the word’. He also said that for India non-alignment represents a national consensus and has become in that sense a national article of faith. I can recall him stating that India was prepared to do more to give greater contact and shape to the non-aligned program.

The new Indian Government has also stressed the continuity of Indian foreign policy and comparisons that are made between the 2 governments ought to bear that in mind. It has declared that, consistent with the spirit of non-alignment and the non-ideological content of its foreign relations, it will maintain and seek to improve its relations with all countries. It is clearly not putting quite the same stress as the previous Government did on relations with the Soviet Union, though most of its statements are couched in the sort of language I have just mentioned. For example, India has stated that it will pursue a policy of balanced relations with all the super powers. It has, of course, expressed concern at the lack of progress in the implementation of the United Nations declaration to make the Indian Ocean a zone of peace. The Foreign Minister in particular has stated that, without the elimination of great power rivalry and the existing foreign military bases, as in the case of Diego Garcia- though it is to be noted that there was no mention, as I recall, of the Soviet base in Berbera no meaningful advance in this direction would be possible.

In summary, the Prime Minister and I will meet the Indian Prime Minister and Foreign Minister at the Commonwealth Heads of Government meeting in London in June. We look forward to that meeting with great expectation. I believe that, despite the careful analysis of documented statements that have been made by members of the Government, I can witness a spirit which would indicate to us a desirability for making the relationship between Australia and India even warmer and more enduring. The Prime Minister and I are looking forward to the meeting in June and to holding discussions on bilateral as well as international and Commonwealth issues.

page 1200

QUESTION

UNEMPLOYMENT BENEFIT FOR SCHOOL LEAVERS

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

– I ask the Prime Minister a question. He may have noted that the Minister for Social Security and the Minister representing her in this chamber both declined last week to state the Government’s policy on the payment of unemployment benefit to school leavers. Now that the High Court has declared that the policy being pursued by the DirectorGeneral of Social Security under the Government’s direction was illegal but that a directive to comply with the Social Services Act must come from die Government and not the Court, I ask: Will the Prime Minister give an undertaking that Miss Karen Green’s application for unemployment benefit will be reconsidered in the light of the Court’s declaration? Also I ask: Will unemployment benefit be paid to the thousands of other school leavers who registered as unemployed and did not find employment and who were discouraged or prevented from applying for benefits by the Government’s policy, which the High Court has now declared to be contrary to the law?

Mr MALCOLM FRASER:
LP

– I will see what further information can be given to the honourable gentleman.

page 1200

QUESTION

MEAT AND LIVESTOCK CORPORATION

Mr KING:
WIMMERA, VICTORIA

– I direct a question to the Minister for Primary Industry. The Minister will no doubt be well aware of the feeling of some beef producers in Victoria regarding the future of their industry. Is the Minister aware that there is a threat of further stock blockades if beef producers cannot receive better prices, better selling methods and an improved authority controlling their product? Finally, is the Minister in a position to indicate what progress has been made regarding the establishment of the Meat and Livestock Corporation?

Mr SINCLAIR:
NCP/NP

-I am aware of the suggested embargo on sales that did in fact occur in one market in Victoria on a day that I attended a meeting there and the suggestion by officers of the Victorian Farmers Union that further stoppages might take place. I believe stoppages of that character do not necessarily fulfil the purposes for which they are carried out. Yet I am most sympathetic to the very real problem of producers which is to secure sufficient returns from their livestock to enable them to carry on their occupation and get something like a reasonable return for funds invested, labour and managerial skills, and prices that are reasonable in comparison with those being paid in export markets around the world. So I am completely in favour of the objective, although I have some reservations about the manner of achieving it.

The Australian Meat and Livestock Corporation proposal has to be concluded with respect to the members of the Corporation. I will be taking that matter up with the producer organisations and exporters. The outline of the proposal is being sent to State governments so that they can be aware of it before any final announcement is made. However, the proposal is now at the point of being drafted into legislation and I am still hopeful that the legislation will be in the House within the next few weeks. In my opinion the proposed Corporation will be able to take action in some of the areas from which unfortunately the Australian Meat Board has been precluded because of its constitution. At a time when we are so critically concerned, for example, about access to Japan and prices paid in markets around the world, I believe that this is a very positive step towards achieving the objective which the honourable gentleman mentioned and which producers in his electorate, throughout Victoria and throughout Australia are seeking to achieve.

page 1200

QUESTION

URANIUM DEBATE

Dr JENKINS:
SCULLIN, VICTORIA

– My question is addressed to the Minister for Environment, Housing and Community Development. The Minister may recall that some weeks ago, in replying to a question of mine, he informed the House that officers of his Department were monitoring the public debate on uranium. Can he inform the House how many officers of his Department are occupied with this monitoring? What is the nature of their duties in carrying out this task? Will the results of their monitoring be conveyed to the House at any stage?

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

– I recall that at least one officer primarily has responsibility for the monitoring of newspapers. Others are assisting in the monitoring of magazines and other media comments. The results of that monitoring are summarised and given to me periodically. They will be given to the Government when it comes time to consider the second and final Ranger report on the uranium question.

page 1200

QUESTION

BOTANY BAY COAL LOADER

Mr GILLARD:
MACQUARIE, NEW SOUTH WALES

-Is the Minister for Transport aware of the proposal to build a coal loader at

Botany Bay? If he is, is there any way he can assist in having a decision made?

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

– I am aware of the proposal to build a coal loader in Botany Bay and of the importance of this coal loader to proposed new coal development in the electorate of the honourable member and the electorate of Macarthur. Whilst the New South Wales Government has given approval for other construction work at Botany Bay, it has not since assuming responsibility given approval for the construction of the Botany Bay coal loader. The responsibility lies clearly with the New South Wales Government. It is a matter which I will take up with that Government to see whether I can get some advance on the present situation.

page 1201

QUESTION

BUILDING AND CONSTRUCTION INDUSTRY

Mr Les McMahon:
SYDNEY, NEW SOUTH WALES · ALP

– My question is directed to the Minister for Environment, Housing and Community Development. Has the Minister asked the Indicative Planning Council to submit a further report on projected maximum utilisation of available resources in the building and construction industry in the light of the most recent statistics which show that the Council’s projections for 1977-78 are clearly unable to be met due to the massive downturn in government support for the industry and consequent loss of skilled tradesmen to other industries and dole queues?

Mr NEWMAN:
LP

-As to the first part of the question, the Indicative Planning Council will continue to take all factors into account when it reports to the Government on arrangements already made. However, as to the matter of the dwelling industry and the construction industry generally, my colleagues the Minister for Construction and the Treasurer have made what is the Government’s assessment of those 2 areas very clear over the last few weeks. I can generalise on what the Treasurer said about the dwelling industry, and it was this: In the last 6 months of 1976 the dwelling industry reached a fairly high level of activity. On the advice that I am receiving, I expect that in this 6 months of the financial year that activity will remain satisfactory. As to the construction industry, my colleague the Minister for Construction has indicated what has been happening in the private area of that industry, and I can repeat some of the figures. I hope that my memory is correct when I say that approvals for 1976 had increased by about 30 per cent in the private sector and that commencements up to September 1976 had increased by about 40 per cent. As to indications of what might happen in this part of the financial year up to June 1977, again if my memory is correct, capital surveys on the intentions of the private industry in relation to the construction of factories and the like project an increase of 12 per cent.

page 1201

QUESTION

OIL INDUSTRY STRIKE

Mr HAMER:
ISAACS, VICTORIA

– My question is addressed to the Prime Minister. Has the Prime Minister anything to tell the House about the petrol transport drivers’ strike in Victoria? Is that State being held to ransom by a few hundred individuals seeking special advantages for themselves?

Mr MALCOLM FRASER:
LP

-There is an attempt by 230 members of the Transport Workers Union to hold the State of Victoria to ransom. That is being done at a time when all heads of governments at one stage and a very large number of people throughout the whole of the community have been embracing the concept of a price-wage halt; a price halt being a fair return for a wage halt and a wage halt being a fair return for a price halt. At that very time 230 members of the Transport Workers Union decided that they should disrupt the whole of Victoria in pursuit of additional compensation for Medibank, in pursuit of wage claims, and in pursuit of a 9-day fortnight. One of the interesting things about the proposition of the Transport Workers Union- it may well explain the incapacity of the President of the Australian Labor Party and of the Australian Council of Trade Unions to embrace even the objectives and principles of the wage-price halt- is the President’s incapacity to do anything about it. I think it is a condemnation of his leadership of the Australian Council of Trade Unions that 230 people are able to put at risk not only the services in the State of Victoria but obviously the jobs of tens of thousands of people in that State.

For the last day or two I have been in close consultation with the Premier of Victoria about these matters, and quite clearly the primary powers in relation to a dispute of this kind lie with the Victorian Parliament and the State of Victoria. The Commonwealth has assured the State of Victoria of whatever support it is within our power to provide, dependent upon Victoria’s own action, and I table the correspondence between myself and the Premier. Shortly before question time today there were reports that the Premier and the Victorian Government are now considering amendments to the Essential Services Act to widen the protections of that Act. I imagine that a good deal of that will depend on what happens in the hearing that I understand is taking place at this very moment and if the matter can be satisfactorily resolved there that ought to please all parties. Quite clearly, the Victorian Government is demonstrating a resolution in these matters and it will have our full support in that purpose.

page 1202

QUESTION

RESEARCH ASSISTANCE TO PRIME MINISTER

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

-The Prime Minister will remember that in March last year he was asked questions about the arrangement he had made as Liberal Party spokesman on industrial relations for a research officer to be seconded to him and material to be prepared for him over several months in the later part of 1974 by the managing director of Gollin and Co. Ltd has now been shown by Mr Spender, Q.C. . . .

Mr SPEAKER:

-Order! The rules of the House state that a question which reflects on a named person should not be asked as a question without notice.

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

-Mr Speaker, there is no reflection on Mr Spender, Q.C. He is an inspector under the -

Mr SPEAKER:

-There is a reflection upon the managing director of Gollins.

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

-Mr Speaker, I am surprised at your taking this point because you were involved in precluding the present Prime Minister from continuing to receive assistance.

Mr SPEAKER:

-Order! The honourable gentleman will not discuss that matter. If he refers to the present managing director -

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

-No, he is no longer a managing director.

Mr SPEAKER:

– The honourable gentleman has identified who he is. He is reflecting upon the person. Such a question should be placed on the notice paper.

page 1202

QUESTION

PREVENTION OF MAKINE POLLUTION

Mr FALCONER:
CASEY, VICTORIA

-Has the attention of the Minister for Foreign Affairs been drawn to that section of the first Ranger Uranium Inquiry report which refers to The Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter? Has he noted the comment in the report that Australia has not become a party to this convention? Does the Government intend to ratify this convention? If so, what steps are being taken to this end?

Mr PEACOCK:
LP

-My attention has been drawn to the matter raised by the honourable member. The Ranger Uranium Inquiry report states that Australia is not a party to The Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter. However, Australia is a signatory to the Convention, having signed it in October 1973. It is also observing the terms of the Convention under a voluntary scheme administered by the Minister for Environment, Housing and Community Development in conjunction with the State governments and industry. This Government is currently conducting negotiations with the relevant State authorities with a view to preparing suitable legislation which will enable Australia to ratify the convention.

Mr SPEAKER:

-Order! The honourable gentleman will resume his seat.

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

-Mr Speaker, I rise to order. I was trying to catch your eye. There is a question on notice on this matter and it has been on the notice paper for the last 2 months.

Mr SPEAKER:

– Has the Minister completed his answer?

Mr PEACOCK:

– Yes.

Mr SPEAKER:

– In the circumstances that the Minister has completed his answer, does the Leader of the Opposition wish to pursue the matter?

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

page 1202

QUESTION

PROVISIONAL TAX

Mr SCHOLES:

-Is the Treasurer aware that provisional tax assessments are being sent to persons with investment income as low as $400? Is he also aware that this involves retired persons who invest lump sum superannuation payments and others in paying provisional tax in the first year of their retirement which substantially reduces their income during that period? Is the Treasurer aware that at the age of retirement, such people cannot necessarily afford to defer that income for that period? Will he examine the level at which provisional tax is applied, as it would appear to be abnormally low, and have a more realistic limit placed on that provision?

Mr LYNCH:
LP

– I am certainly aware that there have been and are problems in this area. Those problems are receiving examination. Of course, they are a matter for decision by the Government in the Budget context.

page 1202

QUESTION

PRICE FREEZE: RURAL PRODUCE

Mr Antony Whitlam:
GRAYNDLER, NEW SOUTH WALES · ALP

– My question is addressed to the Treasurer. Has the Treasury drawn up plans for a voluntary method of freezing the prices of rural produce which is sold by auction and subject to significant variations in supply? Can the right honourable gentleman yet explain to the House how such a scheme might work and thus allay the confusion that exists in the minds of rural producers following the conflicting statements of the Prime Minister and of the Minister for Primary Industry?

Mr SPEAKER:

-Order! The honourable member will not argue the issue. The honourable member will resume his seat. I call the Treasurer.

Mr LYNCH:
LP

– This question is a further reflection of the Opposition’s utter determination to destroy the present prices-incomes pause which, of course, is strongly supported by the Australian people- a pause in which the Government has scrupulously observed the original heads of agreement. I say no more to the honourable gentleman than what the Prime Minister has said already in this House, that is, that the Government does not intend that there will be exemptions and that the pause in fact will apply across the board. The answer to the honourable gentleman ‘s question about Treasury papers is no.

page 1203

QUESTION

PARLIAMENTARY OPPOSITION

Mr BROWN:
DIAMOND VALLEY, VICTORIA

-Has the attention of the Prime Minister been drawn to a recent article in the New Statesman magazine, which he may read, discussing the role of Parliament and, amongst other things, opposition within Parliament? I ask the Prime Minister whether he is satisfied with the opposition within the community to his Government’s policies; whether he would like to see that opposition strengthened or coming from some other quarter, or whether he can think of any other way in which opposition, as an important part of the process, can be improved?

Mr Martin:

– I rise to take a point of order, Mr Speaker. As I understand it, the matters covered by the Prime Minister’s portfolio have nothing to do with the question asked, and I ask you to rule accordingly.

Mr SPEAKER:

-I rule that the question is in order. I call the Prime Minister.

Mr MALCOLM FRASER:
WANNON, VICTORIA · LP

– The honourable gentleman draws attention to a very important point in relation to a democracy. I have not read the specific article in the New Statesman to which he refers. There are people, not only in Australia but also in other countries, who I think are concerned about the nature of opposition within the parliamentary process. It has always been the view of this Government and of these parties that democratic opposition must operate within the parliamentary forum in the proper democratic manner. We do not believe that politics ought to be taken to the streets, as do quite a number of people on the Opposition benches of this House and as they practised on the previous occasion. We believe very strongly that the proper democratic forum- that is, the election of people at elections- is the way in which to see who ought to govern and the nature of the opposition itself.

Dr Klugman:

– You are a bloody hypocrite.

Mr SPEAKER:
Mr MALCOLM FRASER:
WANNON, VICTORIA · LP

– To be concerned about a remark like that one has to have some opinion of the person who makes it.

Mr SPEAKER:

-The right honourable gentleman will resume his seat. I call upon the honourable member for Prospect to withdraw that remark.

Dr Klugman:

– I withdraw.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I rise on a point of order, Mr Speaker. My point of order is this: Is it correct for the Chair to hear a remark such as that made by the honourable member for Prospect and not to hear 2 remarks made this afternoon by an honourable member who sits behind me? In the first place he said that the honourable member for Melbourne should be in gaol and on the second occasion he said that the Leader of the Opposition should be put in gaol? You ignored both remarks.

Mr SPEAKER:

-I did not hear them. I call the Prime Minister.

Mr MALCOLM FRASER:
LP

– This kind of opposition only attracts attention to the Opposition itself. This kind of comment denigrates only the Opposition and allows the people of Australia to see what kind of men it is made of.

The Deputy Leader of the Opposition a few days ago in a considered and, obviously for him, thoughtful speech had a strange view to give of the Opposition and of the parliamentary processes. He built his speech around the thesis that the parliamentary Opposition is extraordinarily weak and that the trade union movement has taken up the burden and is doing it very well. He was making the point that it is the trade union movement that must spearhead the opposition to this Government because in fact the parliamentary Opposition is impotent.

Mr Uren:

– Tell them about the coup of 11 November.

Mr MALCOLM FRASER:

-Ah, they come in, Mr Speaker, do they not? Mr Speaker, the Deputy Leader of the Opposition’s view of his own leader and of the state of the parliamentary Opposition at the present time is very significant.

The Deputy Leader of the Opposition makes it

Suite plain that the trade union movement is now le Government’s main political opponent in this country. The honourable gentleman is speaking of a close colleague, the President of the Labor Party, whom everyone is waiting to embrace in this Parliament. He says that the Australian Labor Party is weakened in numbers and influence in the Federal Parliament. He says that there is a limit to what 36 people can do. The poor things! He says members of the parliamentary Labor Party have a duty to try and that they are doing this reasonably well. But he says that the Party is so weak. He says that therefore the trade union movement must do it all.

The really pertinent point made in the Deputy Leader of die Opposition’s statement is that the President of the Australian Council of Trade Unions is the principal political opponent of this Government. When he pretends to act as President of the ACTU as opposed to acting as the President of the Labor Party, this Government is justified in believing that he is acting as the President of the Labor Party, committed to the political destruction of this Government; that he is ignoring the interests of the trade union movement whose interests are not the interests of the parliamentary Opposition in this Parliament; that he is ignoring the interests of 40 per cent of trade union members who vote Liberal Party or National Country Party at elections and who certainly did so at the last election. This man is incompetent and incapable of representing those people. On the statement of the Deputy Leader of the Opposition himself it is not the Leader of the Opposition, it is not the parliamentary Opposition, it is Mr Hawke who is meant to be the principal political opponent of this Government. Therefore if we in this Government look sometimes with a slightly jaundiced eye at what the President of the ACTU says I think our reasons can be well understood.

The Deputy Leader of the Opposition has told us why: He is not acting as President of the ACTU; he is acting as President of the Australian Labor Party.

Mr Uren:

- Mr Speaker -

Mr SPEAKER:

-Is the honourable member taking a point of order?

Mr Uren:

– Yes, I am raising a point of order because the Prime Minister has quoted me completely out of context. Mr Speaker, a copy of my speech was given to every newspaper representative-

Mr SPEAKER:

-Order! The honourable gentleman will resume his seat. There is no point of order. The honourable gentleman will have the opportunity to make a personal explanation at the end of question time.

Mr Uren:

- Mr Speaker, the whole point is that this man is a dishonest man -

Mr SPEAKER:

-Order! The honourable gentleman will resume his seat.

Mr Uren:

– He is a dishonest man and the fact is that there has been no -

Mr SPEAKER:

-Order! The honourable gentleman will resume his seat.

Mr Uren:

– . . . comment at any time against the Leader of the Labor Party or the Labor Party as a whole.

Mr SPEAKER:

-Order! I warn the Deputy Leader of the Opposition; he will resume his seat.

Mr MALCOLM FRASER:

– I would hate the charge of misquoting the Deputy Leader of the Opposition to have any substance. Therefore let me quote about half a page, word for word, of what the honourable member said when he accused the Government, as one would expect, of acting in a ruthless way because the trade union movement is now its main political opponent in this country. The Deputy Leader of the Opposition said:

The ALP is weakened in numbers and influence in the Federal Parliament. There is a limit to what 36 members can do in a Parliament of 127. This does not mean that we don’t have a duty to try.

That is gracious of him. He continued:

We have to use the forms of the Parliament in the best way we can to push Labor policy. I think we are doing this reasonably well at the moment; there has been a marked improvement in recent weeks in the Parliamentary performance.

Then comes the crescendo-

But with our numbers so weak the main opposition to the conservative forces in this country must be outside the Parliament.

If that is not a criticism of the Leader of the Opposition I do not know what is. He continued:

The trade union movement has taken up the burden and it is doing it very well.

That is quite plainly saying that the Labor Party is blatantly using the trade union movement for its own partisan and political purposes. It is using the President of the Labor Party, who also happens to be President of the Australian Council of Trade Unions, not in pursuit of a national interest, but in pursuit of a party sectional interest. It is the first time that the President of the ACTU has been so used or has permitted the trade union movement to be abused in that way. There are many occasions when the interests of the trade union movement do not coincide with the interests of the government which might happen to be in power at any particular time. Mr Hawke has demonstrated his utter incapacity not only to represent those members in the trade union movement who vote for the Liberal Party or National Country Party- that is, about 40 per cent of them- but also to serve the interests of the trade union movement in a bipartisan manner and a manner that ought to befit the President of the Australian Council of Trade Unions. His refusal a few days ago to support the proposal for a wage and price freeze is a typical example of the manner in which the interests of this nation have been betrayed by someone pursuing a party political objective. It is all on the authority of the Deputy Leader of the Opposition that this is so.

Mr Scholes:

– I rise on a point of order. The last remark that the Prime Minister made about himself must be objectionable to the Prime Minister.

Mr SPEAKER:

– I do not follow the point of order.

Mr MALCOLM FRASER:
WANNON, VICTORIA · LP

– I ask that further questions be placed on the notice paper.

Mr Uren:

– I ask that the total speech from which the Prime Minister has been quoting be incorporated in Hansard.

Mr MALCOLM FRASER:
WANNON, VICTORIA · LP

– The page I was quoting from only.

Mr SPEAKER:

-Is leave granted?

Mr Malcolm Fraser:

– Not for the whole of the speech. For page 12 only.

Mr Uren:

– I will accept page 12. I therefore table the document.

Mr SPEAKER:

-Under Standing Orders the honourable gentleman cannot table the document. He can ask leave to table the document.

Mr Uren:

– I ask for leave to table the document.

Mr SPEAKER:

– Is leave granted?

Mr Malcolm Fraser:

– No.

Mr SPEAKER:

-Leave is not granted.

Mr Scholes:

- Mr Speaker, I propose to move:

That so much of Standing Orders be suspended as would prevent the Deputy Leader of the Opposition tabling the document and having it incorporated in Hansard.

Mr SPEAKER:

-The honourable gentleman will need to put his motion in writing. The motion, as stated, was for tabling and incorporation. I draw the honourable gentleman’s attention to the fact that the Speaker reserves a right as to the length of a document that may be incorporated in Hansard.

Mr Scholes:

– I recognise that, Mr Speaker.

Mr Lusher:

- Mr Speaker, is this one of the examples of the Labor Party using the forms of the House?

Mr SPEAKER:

-The honourable member for Hume will remain silent.

Suspension of Standing Orders

Mr SCHOLES:
Corio

-I move:

That so much of the Standing Orders be suspended as would prevent a statement of the Deputy Leader of the Opposition being tabled and incorporated in Hansard.

I move the motion for suspension of Standing Orders because I believe that where a Minister, especially the Prime Minister, incorrectly or incompletely quotes a statement by a member of this House, some entitlement must exist for the full statement to be read by those persons who will read part of the statement in an answer. It has become a practice- today there have been 2 examples of it- to use selective quoting to distort statements made by members of the Opposition. This practice also occurs with regard to statements made by Ministers but Ministers have rights in this House which are not available to ordinary members, that is, the right to table documents. The Deputy Leader of the Opposition believes and has indicated, by seeking to have this document given wider distribution, that he has been misquoted and that his statements have been distorted by the Prime Minister. This would not be unusual. I suggest that there is no just reason why honourable members on the Government side of the chamber, if they believe that the Prime Minister in answer to a question today has properly quoted and stated opinions which they hold on the statement of the Deputy Leader of the Opposition, should not be prepared to allow that statement to be published by tabling and incorporation in Hansard. It can only be interpreted that they are seeking to prevent its publication and incorporation because they believe the Prime Minister has distorted its contents in his answer to a question. The suspension of Standing Orders in these circumstances to allow this procedure is important to the democratic process.

Unfortunately the Prime Minister in his answer also indicated that the only persons entitled to participate in political debate or to oppose Government policy are those persons who sit in the Parliament in Opposition. He has indicated clearly that he does not believe, and his Government does not believe, that persons outside the Parliament have any right other than to express a triennial vote at elections. That is what he has just said to this House. But I believe that the House owes itself a duty to have a contrary point of view incorporated in its documentation. That is what this motion is all about. The Deputy Leader of the Opposition may or may not have been misquoted by the Prime Minister. Certainly he is entitled to have the full statement, part of which has been quoted by the Prime Minister, incorporated in Hansard so that those persons examining the Prime Minister’s statement will be fully aware of what the Prime Minister has been talking about. If the Prime Minister’s statement is a distortion of the facts he will be exposed for what he has said and the methods by which he has sought to gain political capital. If they are not distorted his statement will have added weight. I find it difficult to understand the fear which exists on the other side of the Parliament of having a statement which has been quoted at length by the Prime Minister incorporated in Hansard for public view.

Mr SPEAKER:

-Is the motion seconded?

Mr UREN:
Reid

-Yes, I second it.

Motion (by Mr Sinclair) put:

That the Deputy Leader of the Opposition be not further heard.

The House divided. (MrSpeaker-RtHon. B. M. Snedden, Q.C.)

AYES: 79

NOES: 32

Majority……. 47

AYES

NOES

Question so resolved in the affirmative.

That so much of the Standing Orders be suspended as would prevent a statement of the Deputy Leader of the Opposition being tabled and incorporated in Hansard.

Mr HAYDEN:
Oxley

-The purpose of this motion is to give an opportunity to the Deputy Leader of the Opposition, the honourable member for Reid (Mr Uren), to save himself from being misrepresented.

Motion (by Mr Sinclair) put:

That the question be now put.

The House divided. (MrSpeaker-Rt Hon. B. M. Snedden, Q.C.)

AYES: 79

NOES: 32

Majority……. 47

AYES

NOES

In Division:

Mr SPEAKER:

– The honourable gentleman stood too late. The motion that the question be now put had already been put.

Mr Yates:

– I take a further point of order, Mr Speaker. Before you put the question, it is normal custom to see whether anybody on either side of the House wishes to speak to the motion.

Mr SPEAKER:

– I think that the honourable gentleman needs to consult the Standing Orders and May’s Parliamentary Practice. I will not hear him more on the point.

Question so resolved in the affirmative.

Original question put:

That the motion (Mr Scholes’s) be agreed to.

The House divided. (Mr Speaker-Rt Hon. B. M. Snedden, Q.C.)

AYES: 32

NOES: 81

Majority……. 49

AYES

NOES

Question so resolved in the negative.

page 1208

PERSONAL EXPLANATIONS

Mr UREN:
Reid

-Mr Speaker, I claim to have been misrepresented.

Mr SPEAKER:

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

Mr UREN:

-I do. During question time the Prime Minister (Mr Malcolm Fraser), in replying to a question, said that I had reflected upon the Leader of the Opposition (Mr E. G. Whitlam). I want to make it quite clear that I have not done so. Anyone who reads my speech, no matter what sort of distorted mind he may have, will find that I have in no way cast personal reflection upon the Leader of the Opposition. I do not want to detain the House, but the whole subject matter of my speech was completely distorted by the Prime Minister and I want briefly to make 4 points. I shall not take more than a few seconds to do so.

My speech dealt with penal provisions of legislation directed against trade unions. I was able to develop my argument by referring to 3 pieces of legislation that are being either amended or referred to in this House. I referred to an amendment to the Conciliation and Arbitration Act which will among other things set up an industrial relations bureau, an amendment to the Trade Practices Act, and a reference by the Attorney-General (Mr Ellicott) to the Government’s use of the corporations power under the Constitution. My speech was circulated to every Press box in the Press Gallery and it was available for all honourable members to read. The Prime Minister asked this morning for a copy of the speech. It was made available. It is a great pity that it could not at least have been incorporated in Hansard so the people of Australia could see what a distorted mind the Prime Minister has.

Mr SPEAKER:

-Order! The honourable member will not argue the matter.

Mr E G Whitlam:
Leader of the Opposition · WERRIWA, NEW SOUTH WALES · ALP

- Mr Speaker, I wish to make a personal explanation.

Mr SPEAKER:

-Order! Does the Leader of the Opposition claim to have been misrepresented?

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

-Yes. The honourable member for St George (Mr Neil) gave notice of a motion of which I have only just received a copy.

Mr SPEAKER:

-Order! The honourable gentleman will resume his seat for a moment. The honourable gentleman had the courtesy, in accordance with the practice, to inform me of his intention to make such a personal explanation.

During the period since then I have been thinking of the matter. I know of no precedent where the terms of a motion can be held to be misrepresentation because the motion is in fact the basis on which the House will be asked to decide, but in the circumstances I think the discretion of the Chair should be exercised to allow the honourable gentleman to make a personal explanation.

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

– I thank you, Mr Speaker. The matter upon which I wish to make the personal explanation concerns one phrase in a notice of motion which the honourable member for St George gave when the House sat. I now have a copy of that. The particular phrase upon which I wish to make the personal explanation is the phrase that I had not issued a public detailed denial of allegations made by the Indonesian Foreign Minister. The allegations made by the Foreign Minister were in fact published 6 months ago. I made a detailed public denial of them at the time. I ask leave to have that denial incorporated in Hansard.

Mr SPEAKER:

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

The document read as follows-

Leader of the Opposition

Press Statement No. 66

Statement by the Hon. E. G. Whitlam Q.C, M.P. TIMOR

Some of this morning’s newspapers publish a secret cable giving an account which Mr Malik, the Indonesian Foreign Minister, gave Mr MacEachen, the Canadian Foreign Minister, five weeks ago about the attitude of my government and the Fraser Government to East Timor.

Any suggestion that my Government approved Indonesian military action in Timor is untrue.

I have never discussed Timor with Mr Malik. He did not attend my discussions with President Suharto in Jogyakarta and Wonosobo in September 1974 and Townsville in April 1975.

Mr Fraser refuses to state the Liberal policy on Timor but I am happy to state and restate the Labor policy.

We opposed any military action in Timor and insisted on the right of self-determination for the Timorese people.

While Labor was in power President Suharto’s undertakings to me on these points were honoured by Indonesia.

The removal of the Labor Government, for which Mr Fraser shares responsibility, precipitated the Indonesian action.

This is a diversionary tactic by a cornered government. The Government first leaked this secret cable two weeks ago; only the National Times then gave it a run. At least the Sydney Morning Herald and Canberra Times obliged on the present rerun. The Fraser Government is so desperate that it has published a cable classified SECRET even if the consequence will be that Canada at least and doubtless other friendly powers will now be reluctant to trust the Fraser Government. They will believe that the Peking disclosures were not accidental but typical. 13 October 1976

Parliament House, Canberra, A.C.T. 2600

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

– I thank the House.

page 1209

AUSTRALIAN FORESTRY COUNCIL

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

– For the information of honourable members, I present the summary of resolutions and recommendations of the fifteenth meeting of the Australian Forestry Council in Adelaide on 10 September 1976.

page 1209

PRICES AND WAGES FREEZE

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

– For the information of honourable members, I table copies of telexes exchanged between the Prime Minister and various Premiers relative to the pricewage pause.

page 1209

DEPARTMENT OF CONSTRUCTION

Mr McLEAY:
Minister for Construction · Boothby · LP

For the information of honourable members, I present the first annual report, that for 1 975-76, of the Department of Construction.

page 1209

PRICES AND WAGES FREEZE: NATIONAL CONFERENCE

Discussion of Matter of Public Importance

Mr SPEAKER:

-I have received letters from the honourable members for Gellibrand (Mr Willis), Lilley (Mr Kevin Cairns) and Parramatta (Mr Ruddock) proposing that definite matters of public importance be submitted to the House for discussion today. As required by standing order 107, 1 have selected one matter, that is, that proposed by the honourable member for Gellibrand, namely:

The Fraser Government’s failure to respond positively to the call for a national conference sought by peak union councils, most State Governments and employer organisations, and commended by the Conciliation and Arbitration Commission.

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

-Thirteen days ago a Premiers Conference in this building was shaping as one of the great disasters of the Fraser Government, with only one of the six State Premiers buying the Fraser Government’s concept of federal financial relationships. But that Premiers Conference was transformed by the throwing into the ring of the concept of a price-wage freeze by the Premier of Victoria, who called for a national conference of governments, trade unions and employer organisations to consider such a freeze. That was how the whole thing started just 13 days ago. It was started with a call for a national conference.

The 7 heads of government agreed to a statement calling for a voluntary price and wage freeze. They did so because they were all concerned at the fact that this country was suffering from substantial inflation. During the calendar year 1976 inflation was running at 14.4 per cent, compared with 8.8 per cent as the average for the 23 Western developed countries in the Organisation for Economic Co-operation and Development. We are certainly well above the average of comparable countries. In the last quarter of 1 976 inflation had been 6 per cent. The minimum rate of inflation for 1977, on the Government’s own figures, is 12 per cent. So the heads of government were certainly right in being concerned about the fact that this country is now in the grip of substantial inflation and something has to be done about it.

However, the emphasis in the call by the heads of government was on voluntary co-operation by the parties. What was called for by their agreement was an approach to the parties to see whether they would agree voluntarily to the freezing of prices and wages for 3 months, and if they agreed approaches were to be made to the Australian Conciliation and Arbitration Commission and the Prices Justification Tribunal respectively to implement the freezes. But it soon became clear that there were lots of problems in such an approach. Within less than a day it was clear that there would be a great problem on the prices side and on the wages side. On the prices side, there were problems about perishable items, auction-determined prices, imported prices, possible non-compliance because not everyone may accept the voluntary price freeze, and problems about surveillance because there was not proper Federal or State machinery for surveillance on price increases.

So within a day or so there were substantial expressions of concern. The Minister for Primary Industry (Mr Sinclair) said that it would be very difficult to keep farm prices frozen for 3 months. The Retail Traders Association of New South Wales said that it could not see how it could keep its prices frozen when imported prices might go up. The Foodland stores ran advertisements in the Melbourne Sun saying they would abide by the freeze to the best of their ability, but in respect of certain products where prices were certain to go up they would try to keep the increases to a minimum. So it was very clear only a day or so after the agreement reached by the State Premiers and the Prime Minister that there would be great problems in achieving a price freeze.

The Government refused to set out guidelines for a prices freeze or to say how it could be made effective. It refused despite constant requests from all sorts of people, including the Opposition in this House. All we heard from the Prime Minister (Mr Malcolm Fraser) again and again was that the Government’s broad approach was that there be no exemptions, despite the fact that the Minister for Primary Industry had indicated that in respect of farm products he thought there ought to be.

On the wages side there were also problems. There was no possibility of agreement unless the Government could assure the unions that there would be an effective price freeze. How could the unions be expected to agree to a wage freeze when there was no guarantee that there would be an effective price freeze, which the Government has never been in a position to guarantee. Furthermore, there was the problem that a price freeze would not show up in the consumer price index until the September quarter because the June quarter figures were already in the pipeline and the March quarter figures were due out in one or two weeks. In fact, they will be out at the end of this week, as I understand it. So in the period of the wage freeze there would be substantial recorded price increases. Let me inform the House that, according to the Government’s own figures, in the March quarter the increase will be 3.5 per cent at least and in the June quarter 3.9 per cent at least. Those figures were given in the national wage case. So in the period of the proposed wage freeze there would be substantial recorded price increases, which of course would make it more difficult for unions to accept the wage freeze.

Furthermore, there was a problem that award wages had been slashed already by 4 per cent in the last year. In fact, actual wages had been slashed by more than that in real terms because overaward payments have not moved for well over a year. So it was unlikely that the unions would accept any further real wage cuts such as would be involved in a price and wage freeze because of the non-adjustment for the March quarter, meaning that real wages would .be reduced until at least the March quarter figures were looked at by the Conciliation and Arbitration Commission in August when, after the freeze had ended, it considered them at the same time as it considered the June quarter figures.

There were problems on the prices side and problems on the wages side. It was clear with all these problems that any chance of a concensus approach to wage and price determination depended on a national conference of all the parties concerned. The ACTU called for such a conference in a hearing before the Conciliation and Arbitration Commission a week ago and said that in such a conference consideration should be given to tax cuts as an offset to unions forgoing the March quarter increase so that there would not be a further fall in real after-tax wages. Clearly that was a very important issue for the unions. That call for a national conference was supported by the 3 State Labor governments. It was supported by employer organisations, and in that connection let me quote the statement by the Executive Director of the National Employers Policy Committee, Mr George Polites, reported in the Canberra Times on 20 April:

We do need a serious conference to see if we can come together and work out a proper wages and prices policy to halt the inflationary spiral.

Mr Polites was certainly unequivocal in his support for a national conference. Such a conference was also supported by the Victorian Government. The government which had originally proposed the price-wage freeze also supported the idea of a national conference when it was again proposed by the ACTU. The Arbitration Commission also supported the idea, and in fact commended it in a statement at the end of the one-day hearing a week ago. Let me read to the House what was said:

We have in past decisions laid great stress on the importance of consensus in national wage matters. We believe that every effort should be made to pursue those avenues which provide the opportunity for reaching consensus. In this connection we commend the ACTU proposal, supported by the other peak union councils and the governments of New South wales, South Australia, and Tasmania, for a broadly based conference to be called by the Commonwealth.

The Arbitration Commission commended the idea, but the Government dismissed it out of hand on the flimsy excuse that the unions would not agree in principle to a price-wage freeze. The Government must have known that the unions could not agree in principle to something which was vague, ill-defined, and beset with considerable problems until those problems had been discussed and analysed. Clearly, the place to do that was in a national conference. So one can conclude only that the Government did not want a national conference and did not want it because it would be almost alone at such a conference. The Government cannot depend on support even from the Premier of Queensland, Mr Bjelke-Petersen, because at such a conference where there would be discussions of tax cuts presumably Mr Bjelke-Petersen would stick to what he had said publicly, namely, that there ought to be substantial tax cuts. Just a week ago he called for an immediate 10 per cent cut in personal income tax, a halving of sales tax, reductions in company tax, and elimination of tax on overtime. Five of the six State Premiers would be aligned against the Government at such a national conference, at least in respect of tax offsets and so it is clear why the Government was not anxious to have a national conference. Quite clearly, very meagre support would emerge from such a conference for the Government’s economic policies, and the paucity of support for its policies would be an enormous embarrassment to this Government.

What has happened in the wake of all this is that the Government is now forsaking the voluntary aspect of the freeze in regard to wages and is seeking a compulsory wage freeze. Indeed, almost from the outset the Government has shown a desire to make the wage freeze compulsory. Two days after the voluntary agreement was reached by the heads of government, the Government sought the co-operation of the Premiers in a compulsory wage freeze by asking them to join in a joint submission to the Arbitration Commission seeking a wage freeze at least in respect of award wages. When the Labor Premiers protested that that was outside the agreement because what they had agreed to was to approach the parties and get their voluntary acceptance not to rush off to the Commission and ask for the imposition of a freeze, the Prime Minister said that the Government would change its submission and ask the Commission to delay the hearing. But the Government did not abide even by that statement. Instead, it asked the Commission to defer part heard and new matters pending agreement in regard to a voluntary wage freeze.

So the Government did not abide even by the Prime Minister’s statement made to the people at the end of the week before last in which he said that the Government would change its proposed submission from one requesting the Arbitration Commission to impose an immediate freeze to one asking the Commission to defer the hearing. In fact the Government asked the Commission to impose a freeze until agreement was reached. It was asking the Commission to impose a wage freeze pending the voluntary acceptance of one. The Government would not put a time on the deferment period. It agreed that a deferment could involve postponing the March quarter hearing listed for 3 May, and when pushed by the Commission it had to agree that it was asking the Commission to forgo the industrial consequences of that, to ignore its statutory role to prevent and settle industrial disputes, and instead to impose a wage freeze regardless of its statutory role. When that proposition was rejected by the Arbitration Commission the Government refused to accept the idea of a national conference to obtain a consensus approach, and again has proposed to the State Premiers that a joint approach be made to the Commission to freeze award wages.

The Government has made constant attempts to get a compulsory wage freeze but has made no such effort in regard to prices. Quite clearly, it has given little attention to obtaining a price freeze, whether voluntarily or compulsorily. The Prime Minister has attempted to say that he is not seeking a compulsory wage freeze. He said on television last week that the unions can get wage increases outside the Arbitration Commission and therefore the fact that he is asking the Commission to freeze award wages does not mean that he is trying to impose a compulsory wage freeze. What enormous hypocrisy, because at the same time the Prime Minister and the Government are doing their level best to ensure that no increase in wages occurs outside the Arbitration Commission. In fact, in the oil industry dispute, as I am sure all honourable members are aware, the Government is pressuring the oil companies, and has been doing so for some time, not to concede one cent to the unions in the negotiations which have now broken down and led to the prolonged strike. The Minister for Employment and Industrial Relations (Mr Street) has been pressuring the oil companies at least since the beginning of this month. The Minister at the table, the Minister for Business and Consumer Affairs (Mr Howard), sent telegrams to the companies only a couple of days ago telling them not to give way, and that if they did the Government would have a look at their pricing policies. So clearly the Government is doing its level best to ensure that the companies do not concede anything outside the Arbitration Commission, and quite obviously the Government is very much about imposing a compulsory wage freeze, both in terms of award rates and non-award rates.

We have also had conjecture in the Press about the use of the corporations power in a way which would prohibit companies from giving increases in wages beyond those awarded by the Arbitration Commission. The Attorney-General (Mr Ellicott) is on record as suggesting that this could be done, and there has been a lot of conjecture that the Government may well impose such measures. So the Government clearly is doing all in its power to impose a compulsory wage freeze as part of its policy to slash real wage levels even further than they have been cut already. It is especially clear now that there will be no voluntary price freeze. Last Friday the Australian Financial Review gave example after example of captains of industry saying that as far as they were concerned there was no price freeze. The Government’s policy is completely divisive. It is not interested in the consensus approach. If it were interested it would call a national conference, and the fact that it does not do so shows that it is interested not in consensus but in division. It is interested in confronting the unions, in slashing real wages, and in the process bringing about substantial industrial disputation, therefore justifying the industrial relations legislation which has already been introduced into this House, and the trade practices legislation, which if implemented, will have similar effects on the ability of the unions to take industrial action. This Government is a government of industrial confrontation and division. It is not a government which is interested in the orderly settlement of industrial disputes.

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

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

– In the face of that rather provocative and emotional peroration from the honourable member for Gellibrand (Mr Willis), I think it would be a good idea if this House went back, as the honourable member did at the beginning of his remarks, to where the proposition for a wage-price pause started. It started at a Premiers Conference on 13 April at which the Prime Minister of the Commonwealth and the Premiers of each of the 6 States- Labor, Liberal and National Country Party- all agreed on one thing and one thing alone: That a price freeze for a wage freeze was a fair exchange. In other words, every person who put his signature to that agreement on 13 April said in clear and unmistakable terms: ‘We think a fair exchange is achieved if there is a price freeze for a wage freeze. ‘

Dr Klugman:

– On a voluntary basis.

Mr HOWARD:

– It is all very well for the honourable member for Pospect to interject because he knows that the simplicity of that proposition commends itself to the overwhelming majority of the Australian people. They understand what is involved in it, and to the extent that the honourable member pours scorns upon it he pours scorn upon the intelligence of the Labor Premier of New South Wales, he pours scorn upon the Labor Premier of Tasmania, and he pours scorn upon the Labor Premier of South Australia. On 13 April all of those gentlemen, in concert with the 3 non Labor Premiers of Australia and the Prime Minister, believed it was fair and just that the wage and salary earners of Australia should accept a wage freeze in return for a price freeze. There was no reference in the heads of government agreement to taxation cuts. There was no reference in the heads of government agreement to a national conference.

Indeed, the proposition for a national conference had been explored by the Premiers Conference. For reasons which I will mention in a moment and which have already been mentioned by the Prime Minister (Mr Malcolm Fraser) in the context of this whole debate, that proposition was rejected. All of those Premiers knew before and at the Conference that it was beyond the economic capacity of the Commonwealth Government to give further taxation reductions. The Prime Minister and the Treasurer (Mr Lynch) had said repeatedly over the last 6 months that taxation reductions, beyond those embraced by tax indexation which will give benefits of $2,000m during the financial year commencing 1 July, are beyond the economic capacity of the Federal Government at the present time. This was spelt out in clear and unmistakeable terms to each of the Premiers at the Premiers ‘Conference.

Despite that, in the full knowledge that the Commonwealth Government had neither the capacity nor the intention at the present time of granting further taxation reductions, every last one of those Premiers signed that declaration. By so doing, they said that it was not unfair to say to the trade union movement that it should accept wage restraint in return for price restraint. It was not unfair to say that that was a fair swap. In the light of that action, the behaviour and the attitude of a number of people involved in this dis- pute shows them, under close examination not to ave understood the motives behind the original declaration of the Premiers and the Prime Minister. What was involved in that and what we must constantly remind ourselves of, despite the attempts of people such as the President of the Australian Council of Trade Unions to divert our attention from it, was the simple proposition that the Australian people understood that it was fair to have a price pause in return for a wage pause. I believe that after that agreement was reached, the hopes of a great number of people in Australia that something quite bi-partisan and quite across party lines had been achieved were raised. They believed that it might be possible from that, with good faith and with a willingness to consider and discuss problems, to achieve something quite significant to reduce our rate of inflation.

Nobody imagined from day one of this exercise that there were not going to be difficulties. Nobody imagined that it would be possible for everyone in the community to accept from day one that an effective freeze on prices and a effective freeze on wages would be possible. Indeed, the honourable member for Gellibrand with, I think, a certain degree of cynicism, has pointed to some of the difficult areas in regard to prices. What he did not do was to acknowledge during his remarks- he did not have the grace to do sothat within 2 days of the joint agreement between the Premiers and the Prime Minister, all the major employer groups of Australia met representatives of the Government in Melbourne and pledged their support for the objectives that the Premiers and the Prime Minister had in mind.

He did not have the grace to acknowledge that company after company in Australia had stated, and by their actions demonstrated, their willingness to abide by the price freeze. He did not have the grace to acknowledge that many companies without specific request from the Government had agreed to defer implementation of price approvals which had been given to them by the Prices Justification Tribunal. He did not have the grace to acknowledge any of these things. All he could do, in a destructive and uncooperative manner, was to point to the difficult areas. All he could do was to talk about perishable foods. All he could do was to talk about the areas which we knew would cause great difficulty.

We knew about them from the outset. I venture to suggest that every last Premier, be he a Labor Premier or a Liberal Premier, knew about them at the outset. But despite this, all of those 7 gentlemen believed on 13 April that the nature of the circumstances in which we live in Australia at the present time demanded this type of bipartisan approach. It will be to their credit. I include in that statement Labor Premiers as well as Liberal Premiers. It will be to their credit that they were motivated to try to achieve this on 13 April.

The Federal Government, for its part, acted in total good faith from 13 April onwards. It immediately said it would stop any increases in its own charges. It immediately approached the Prices Justification Tribunal and asked it to defer consideration of applications for price increases then before the Tribunal. It also asked the Tribunal to monitor price increases. It also undertook, through my Department, to contact companies which were entitled under the terms of the Prices Justification Act to receive decisions on their applications and to ask those companies to waive their right to have a decision given pending the hope of achieving agreement on the price-wage pause. In addition, within 4 days of 13 April, I indicated that if agreement in principle could be reached on the price-wage pause, the Government would be prepared to establish a special group consisting of employers, union representatives and the Prices Justification Tribunal to advise the Government, amongst other things, whether any changes to the Prices Justification Act were required in order to support the agreement. What we were doing by that was offering the trade union movement of Australia a direct say in advising the Government of the mechanism required to support the voluntary agreement. To the extent that the President of the Australian Council of Trade Unions, his colleagues and members of the Opposition have denigrated the cause of reaching agreement on a price-wage pause, they have denied themselves an opportunity of participating in a means of making sure that the agreement worked.

We acted in good faith. We went to the unprecedented lengths of sending to all the Premiers -at this stage we regarded it as a joint operation which could be consummated only if we maintained the unanimity which was evident on 13 April- advance copies of the submission that the Commonwealth proposed to make to the Conciliation and Arbitration Commission. Governments do not normally do that, as the honourable member for Gellibrand who has appeared in that jurisdiction on a number of occasions knows full well. We felt so strongly that the unity evident on 13 April should be maintained that we sent an advance copy of our case to each of the 6 State governments. In the light of the objections raised to that draft submission by the Labor Governments of New South Wales, South Australia and Tasmania, we changed our submission.

In other words, we bent over backwards to preserve the unity which was evident on 1 3 April. We listened to what Mr Wran, Mr Dunstan and Mr Neilson had to say. I think that, far from demonstrating any lack of good faith on the part of the Prime Minister and the Commonwealth Government, that demonstrates total good faith. We put our submission to the Conciliation and

Arbitration Commission. We did not know in advance what the Governments of South Australia New South Wales and Tasmania would say to the Commission. They did not pay us the courtesy of sending us an advance copy of their submission. Of course not. I think their failure to do so demonstrates where on this issue the balance of good faith lies. We have acted in total good faith throughout this entire issue. We have endeavoured to bring about an agreement that the Premiers and the Prime Minister had in mind on 13 April.

One may ask the question: Why will not the Commonwealth convene a national conference? The Prime Minister has said quite clearly and repeatedly that the Commonwealth will convene and join a national conference if there is a prospect that that national conference will contribute towards getting an agreement on a pricewage pause. That is what it is all about- an agreement on a price-wage pause. That is what the Premiers said it was all about on 13 April. They did not say it had anything to do with tax cuts or general economic management. They said it had everything to do with a fair exchange between a price pause and a wage pause. I repeat that the Commonwealth Government will join a national conference on this issue if there is any prospect that such a national conference will contribute towards consummating the agreement that was sought on 13 April. But we do not believe that there is any prospect of that agreement being consummated through a national conference unless all of those going to the conference at least want it to succeed. One would want a conference of that nature to succeed only if one were prepared to support the objective in principle.

If it is aU right for the governments of Australia and for the employers of Australia to say that they seek the objective of a price-wage pause, why is it not all right for the trade union movement of Australia to say the same? We are not asking the trade union movement to commit itself blindfolded to the proposition. We are not asking it to give an absolute commitment. We are not asking it to bind itself. All we are asking it to do as a pre-condition to a national conference is to say that it is prepared to support in principle the objective of a price-wage pause. That is not an unreasonable demand. Mr Dunstan did not regard it as an unreasonable demand on 13 April and neither did Mr Neilson and Mr Wran. I think an increasing number of people in Australia are now asking why do the leadership of the trade union movement and an increasing number of members of the Parliamentary Labor

Party regard that as such an unreasonable demand.

I repeat that we are prepared to go to a national conference. But we will not go to a national conference which has no prospect of success. We WU not go to a national conference which will be a futile exercise in political rhetoric, a national conference which will unnecessarily raise hopes and expectations, a national conference to which some of the parties will not go in good faith. I believe that something could be achieved from a national conference on this issue if, indeed, all of the parties attending it were at least prepared to try to reach significant agreement on that one simple issue which motivated the Prime Minister and the Premiers on 13 April. One must keep going back to that point. It was a proposition which involved, of course, massive difficulties. It was a proposition whose success would require good faith on the part of all parties. It was a proposition not for the cynics of this world but for those people who believe -

Dr Klugman:

– You have to have faith.

Mr HOWARD:

– No, it was a proposition that a large number of people in this country believed could be made to work if all sections of the Australian community were prepared to join in helping to make it work. If there is evidence that all significant sections of the Australian community are prepared to be represented at a conference in order to make this proposition work, we are prepared to join it. So far I think everybody is acutely and starkly aware that there is one significant element of the Australian community which is not prepared to lend its support even in principle to an objective which all the heads of government in Australia, irrespective of their party differences, regarded on 13 April as an important objective. I think that is unfortunate for Australia. I think it is something which will disappoint and bewilder an increasing number of Australian people.

Mr KEATING:
Blaxland

-The Minister for Business and Consumer Affairs (Mr Howard) is saying that everyone is out of step but the Government. The leader of organised labour in Australia, the President of the Aus.tralian Council of Trade Unions, Mr Hawke, came to Canberra last week proposing a national conference on the issue of the freeze. The independent Conciliation and Arbitration Commission recommended that course in its judgment a week ago. Since then the Premier of Victoria, Mr Hamer, has suggested the same course.

The Australian Council of Employers Federations which is led by Mr Polites, suggested the same thing. Everyone is out of step but the Government. The Government wants blind or slavish support for a wage freeze or nothing at all.

So, what do we find? We now find that the Prime Minister (Mr Malcolm Fraser) will not even respond to the proposal. He will not sit down and talk to almost every interested party in this matter in the country because he just wants an unencumbered wage freeze, and that is it. His obstructionism is now destroying the whole initiative. Here is the man who got Sir John Kerr to toss out the Labor Government because of its economic performance, politically and economically destitute. This is the man who claimed that he had all the economic answers. In the first place we had an investment led recovery, then a consumer led recovery, and then the panic devaluation. Now we have the kick-the-unions recovery. Who is responsible for all this? It is none other than the ideas man, the Prime Ministerthe Leader of a bankrupt Government. Yet he had the hide not so long ago to talk about uncertainty under the Labor Government. What more uncertainty could there be than a complete absence of any coherent monetary of fiscal policy to deal with inflation and this attempt to coerce the trade union movement and working people in Australia into a premature and useless wage freeze which is not backed by some quid pro quo on prices.

The interesting thing about this debate is that the Treasurer (Mr Lynch) is absent. We are again confronted by the Minister for Business and Consumer Affairs and, in this debate a back bench speaker. The prime economic manager in the Government, the Treasurer, has been silent right throughout the debate on this issue. Apart from learning the fact that the Secretary of the Treasury sold the idea to the State officials, we have not heard one contribution from the Treasurer or any of the Treasury officials. We realise that the majority of the officials are opposed to it. When we have asked the Government to table the documents showing the advice which the Treasury has tended to it, it refuses to do so because no-one in the Treasury believes this policy. The Treasury officials put the position quite bluntly. They say that the Government has now left the analyst and the technocrat and returned to the witch doctor. The Government wants blind and slavish support for a wage freeze. That is the only economic policy that the Government now has. The Government’s economic policy is now concentrated on a cut in real wages.

Where is the Treasurer while this debate is in progress? The Treasurer is slinking around in his office listening to the debate over the internal broadcast system instead of being in the chamber defending the policy which he espouses. The point, of course, is that he does not believe it; neither does the Treasury. The fact that the Prime Minister conned Sir Frederic Wheeler into selling it to the State officials is beside the point. The Prime Minister is now practically left on his own, without any of the State governments agreeing with him, without the employer or employee organisations agreeing with him. He has sent a junior Minister in the person of the Minister for Business and Consumer Affairs, into this chamber to defend a policy which is now falling to pieces.

Let us look at what the President of the ACTU put to the Prime Minister last week. He said: ‘I am here to talk about a national conference, which was commended by the Arbitration Commission, because I know that inflation is the problem and I recognise that wages play a part in prices. I am prepared to talk about this’. But that was not good enough for the Prime Minister. The Prime Minister said that because Mr Hawke would not commit himself to the principle of a wage freeze he would talk no longer. He then was foolish enough to ask Mr Hawke for a personal commitment. What is a personal commitment from a person who leads the trade union movement? What is a personal commitment from a Minister? What is a personal commitment from a Prime Minister? What matters is the commitment of the Government and it is the commitment of the organisation and not a personal commitment that matters. Mr Fraser is prepared to go to any lengths to try to squeeze out of Mr Hawke a commitment to this wage freeze without explaining in any way how he would deal with prices.

The Minister for Business and Consumer Affairs said in the debate a few moments ago that no one mentioned tax cuts. Mr Hawke mentioned tax cuts last week, and so did the Victorian Premier.

Mr Howard:

– Nobody mentioned them at the Premiers Conference. Do not deliberately misrepresent what I said.

Mr KEATING:

– That is not true.

Mr Howard:

– Why do you not read what was said?

Mr KEATING:

– I will read the transcript of what Mr Hamer said on the radio program A.M. :

WARWICK ADDERLEY: Well, Mr Hamer, is it correct that you made no mention of tax cuts at the Premiers Conference?

Mr HAMER: It’s not correct in this sense that it was always pan of the proposal which we were putting as others were aware.

WARWICK ADDERLEY-But why didn’t it appear in the draft that you agreed to?

Mr HAMER:

-Because it was put to me that to be discussing possible tax cuts publicly was undesirable but at the same time the Prime Minister and the Treasurer agreed to consider it as part of the deal.

There you are. Enough of your deceit. The Victorian Premier -

Mr DEPUTY SPEAKER:

-Order! The statement just made by the honourable member for Blaxland could be taken as a personal statement against the Minister.

Mr KEATING:

– Well, I say the deceit of the Government. I am not worried about what the Minister said. I was talking about the deceit of the Government. The Minister reiterated the point in the House by suggesting that no one talked about tax cuts. Is he calling the Victorian Premier a liar? On Thursday night the Minister put out an impertinent statement attacking the Victorian Premier by saying that he was doing a ‘Newport’. The statement was probably drafted by the Prime Minister’s own hands and given to the Minister to be put in the Press boxes in the Minister’s name. Of course, that statement was rejoined by the Premier of Victoria on the radio program A.M. the next morning. That put an end to this stupidity about tax cuts. The Victorian Premier, the President of the ACTU and most interested parties put to the Government the notion of tax cuts as part of a trade-off. But the Government would not have it. There has been absolutely no goodwill shown by the Government in this matter. It tried to enforce a freeze on prices. The fact that the Labor State Premiers then stood it up and it declined to continue with its application showed that it had no goodwill in the first place. The fact that the President of the ACTU agreed to sit down with other people at a national conference and talk about the problem of wages as part of the economy shows that he had goodwill on the issue. But now the Prime Minister says: ‘We will not talk unless you slavishly agree to a wage freeze ‘.

I would now like to turn to the question of prices. What has the Government done about prices? It has done absolutely nothing. In fact, all the Government has done since it has been in office has been to weaken the powers of the Prices Justification Tribunal. I would like to read from an article which appeared in last week’s edition of the Australian Financial Review. In regard to prices the article stated:

Harris Coffee and Tea and Bushells Pry Ltd said they would not hold prices at the present level for three months.

The executive director of the Grocery Manufacturers Association, Mr Bernard Holt, said: ‘There is no price freeze.’

Mr Bernard Holt said no explanation on the price freeze implementation had been received by the association despite its many phone calls and telegrams to the Minister for Business and Consumer Affairs and the Prime Minister’s Department over the last week.

Further on the article states:

The joint managing director of Reckitt and Colman, Mr Andrew Caro, said the freeze had been ‘ very badly handled. ‘

The article also stated:

Unilever subsidiary EOI said it could not be expected to hold prices on Stork margarine at the special level they had been for the past few weeks.

The product will be returned to its normal price, a spokesman said.

Lifesavers, manufacturers of Smalls chocolate, said the company now has an application for a price increase for chocolate before the PJT.

It is hardly worth persisting with the ruse. The Government had no intention of doing anything about a price freeze. The Government thought that through a couple of clauses in the heads of agreement, as it referred to this document, it could coerce the Australian trade union movement and organised labour into a wage freeze, which has now failed. But more reasonable people such as the President of the ACTU, employers and the Victorian Premier have said ‘Let us sit down at a conference and consider a trade off in tax cuts; let us look at the question of prices and wages’. As the honourable member for Gellibrand (Mr Willis) has said, wages will be affected at the next quarterly hearing following a freeze. Because of these factors we need to sit down and hammer out this matter. Perhaps then we may get some national agreement. But the Government does not want national agreement. It just wants an easy wage freeze. It is not going to get this unless it sits down at a national conference and talks about this matter like civilized people. It has to look at the real issues. The Prime Minister will not at this point sit down and speak to other people in the community. The Opposition says that if the Government wants consensus on inflation it should sit down at a national conference. While the Government continues to refuse the public of Australia will realise that it has no good intentions in this matter. This proposal was an easy sell in the first place and the Government thought that because it had an agreement, which was a basis for the proposal, it had the start, the middle and the finish. Well, it was wrong.

Mr DEPUTY SPEAKER:

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

Mr BURR:
Wilmot

-We are debating a matter of public importance which ostensibly is all about a national conference that someone outside the Parliament has called. I believe that this issue goes much further than a national conference. What we are really debating is who the hell is governing this country and who is the Opposition here in this Parliament. We have had a properly held Premiers’ Conference at which the heads of government of this country for once have agreed on a proposal. I believe it was unique that such a meeting should reach bipartisan agreement among all heads of government, that the parties at the Conference representing all political persuasions could come together and for once in their lives agree on one thing. Even the leader of the Opposition (Mr E. G. Whitlam) gave tentative assurance that he would support the same proposals as agreed to by the heads of government.

But who has undermined the agreement reached between the heads of government. It was someone who is not part of this parliamentary process, someone who is not elected by the Australian people. It was Mr Hawke, the President of the Australian Council of Trade Unions. The real issue is: Who is governing this country? Part of the agreement reached at the Premiers’ Conference was as follows:

The Heads of the Commonwealth and all State Governments, meeting in Premiers’ Conference in Canberra today, unanimously called for a three month halt in price and wage increases. They agreed that such restraint was urgently needed if Australia is to overcome its current economic problems.

That was the agreement to which all 7 heads of government agreed. But one man in the person of Mr Hawke says: ‘No, we do not want good government in this country; we do not want economic recovery; that is no good for our political intentions. No, we are going to undermine all of this bipartisan approach. ‘

Mr Hodgman:

– He has white-anted it.

Mr BURR:

– As my colleague says, he has white-anted it. He is white-anting not only this Government but also the people of Australia because I believe that this agreement had the overwhelming support of the people of this country. Certainly the comment that I have had coming back to me as a member of this Parliament has been that the proposal is a good thing; it is good to see governments of all political persuasions coming together and agreeing that there should be a united approach to the economic difficulties in Australia. If there has been criticism it has been to the effect that 3 months is not a long enough period in which to make the proposal work.

The Prime Minister (Mr Malcolm Fraser) has been quite responsible. He agreed at the Premiers’ Conference to contact business leaders and trade unions throughout Australia and to report back to the Premiers as to what happened. I would like to read to the House the reply that the Prime Minister sent to the Premiers as a result of those approaches. It stated: … I must report that these representatives indicated their unwillingness -

He was speaking about trade union representatives on this occasion- to proceed without a national conference and a subsequent conference of trade unions and seek their agreement to a national conference on this matter. I indicated that I was prepared to do so if peak council representatives were prepared to support in principle the objectives of the heads of government agreement even if only on a personal basis. This was no more than was indicated by one peak council - which my colleagues on the opposite side forget- in yesterday’s proceedings in the Commission. Other peak council representatives were not prepared to support even in principle and for this reason I decided that such a national conference would be futile.

Of course it is futile if they will not even agree to a talk on principles, let alone detail. The Prime Minister received the unanimous support of 78 different organisations throughout this country to the proposal that there should be a national price and wage freeze. I seek leave to have a list of the organisations which have given support to the Prime Minister incorporated in Hansard.

Mr DEPUTY SPEAKER:

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

The document read as follows-

AGRICULTURAL/PASTORAL ORGANISATIONS

  1. D. Urquhart, President, National Council of Wool Selling Brokers, Telex 14 April. Strong support.
  2. A. Webster, Chairman, Australian Dairy Corporation, Telex, IS April.

Will endeavour to contribute towards wage and price restraint for next three months.

  1. *Col. M. H. McArthur, O.B.E., Chairman, Australian Meat Board, Telex, 1 8 April.

Fully supports concept of a pause.

  1. G. Leckie, Chairman, Australian Apple and Pear Corporation, Telegram, 15 April. Will co-operate where possible.
  2. A. S. Norquay, Secretary, Australian Farmers’ Federation, Letter, 15 April

Public statement by President calling for a response of cooperation.

  1. Michael Shanahan, President, United Farmers, Telegram, 15 April.

Advises support of the Australian Wheatgrowers Federation.

  1. John Bennett, President, Australian Dairy Farmer’s Federation, Telegram, 18 April.

Supports any action which would improve economic position of Dairy Farmers.

  1. Don Von Bibra, Chairman, Australian Wool Industry Conference, Telex, 18 April.

Support on behalf of all woolgrowers.

page 1218

AUTOMOTIVE INDUSTRY GROUPS

Full support-believes there should be no exceptions.

Commends initiative and gives assurance of full cooperation.

Support three months pause on assumption that wages and vendors prices be similarly contained.

Support Automobile Chamber of Commerce view that pause be respected. Speaks for 4500 service stations in N.S.W.

Recommending that all members support the proposal.

Supports Governments endeavour.

page 1218

BUILDING AND CONSTRUCTION GROUPS

Support and co-operation.

Copy of press release supporting pause.

Supports proposal-already withheld implementation of price increases planned for this week.

page 1218

BUSINESS ORGANISATIONS

Supports and endorses restraint-will encourage members to observe agreement.

Sees the three months as a ‘period to reflect’.

Accepts the point of the appeal that the economy can be assisted towards recovery by wage-price restraint.

Fully supports proposal.

Supports proposal and advised all members States accordingly.

page 1218

CHEMICAL AND ASSOCIATED MANUFACTURERS

Supports initiative- from date of initial announcement ICI suspended all projected price movements not already advised to customers.

page 1218

ELECTRIC/ELECTRONIC PRODUCT MANUFACTURERS

Confirms that all executives have been instructed not to increase prices for any local product or service.

Supports initiative and anticipates co-operation from members.

Welcomes proposals.

page 1218

EMPLOYER ORGANISATIONS

Supports proposal and is advising all members to cooperate

page 1218

FINANCIAL INSTITUTIONS

Wholehearted support.

Welcomes initiative and lends full support.

Will co-operate fully with the program of voluntary restraint.

Supports initiative.

Members have been advised of Executive opinion that they should support the proposal in principle and seek to give practical effect to the pause.

Welcomes and endorses initiative.

page 1219

FOOD AND ALLIED PRODUCTS MANUFACTURERS

Represent all major manufacturers of package grocerieswish to co-operate in every way possible.

page 1219

HEALTH/MEDICAL ORGANISATIONS

Will comply with voluntary price freeze.

page 1219

INSURANCE ORGANISATIONS

Full co-operation.

page 1219

INDUSTRY ORGANISATIONS

Supports initiative- will encourage member companies to co-operate.

page 1219

METAL PRODUCTS AND ENGINEERING GROUPS AND ASSOCIATED INDUSTRIES

Anxious to support initiative and gives assurances of cooperation.

Full support of all units and subsidiaries of ACI.

Supports proposal- forwards copy of press statement re support and circular to member companies urging them to commit themselves to the plan.

page 1219

MINING INDUSTRY ORGANISATIONS

Supports initiative and will encourage member companies to co-operate.

Supports initiative and will urge other organisations to give support.

Will comply with price restraint.

Fully endorses price and wage restraint.

Supports initiative- circulated message to all members.

Supports initiative.

Gives assurance that Shell will exercise restraint during preliminary period and co-operate in pursuing necessary joint agreements.

page 1219

PAPER MANUFACTURERS

Supports 90 day price/wage freeze- will make a public statement of support on Monday 1 8 April.

page 1219

PETROLEUM PRODUCTS

page 1219

PROFESSIONAL GROUPS

page 1219

RETAILERS

Supports decision- prices will remain unchanged for 90 days.

Full support- have asked retail customers to observe the spirit of the freeze and all have indicated willingness.

page 1219

TEXTILE AND FOOTWEAR INDUSTRY GROUPS

Supports initiative.

Supports initiative and pledges co-operation.

Snap survey concludes members support proposal- one manufacturer prepared to consider freezing prices until the end of 1977.

Will support proposal in every way possible short of placing company in jeopardy.

Wholehearted support.

page 1220

TRANSPORT GROUPS

page 1220

QUESTION

OTHERS

  1. J. Davidson, Managing Director, The Commonwealth Industrial Gases Ltd, Telex, 15 April. Supports voluntary freeze.
  2. W. Vines, Chairman, Dalgety Australia Limited, Telex, 18 April. Total support.
  3. *J. Matheson, General Manager, Peanut Marketing Board, Telex, 15 April.

Supports ideals of price freeze.

  1. “Campbell Johnston, Chairman, The Australian Associated Stock Exchanges, Telex, 1 8 April.

Has not considered full ramifications but wholeheartedly supports initiative to curb inflation.

Mr BURR:

-I thank the Opposition. But what do we find despite all of the support behind the Prime Minister and the Premiers as a result of the Premiers ‘ Conference? We find that the trade union movement does not even want to talk about a wage-price freeze. What is it that the trade unions are after? Why do they not want to talk about a price-wage freeze. If all the heads of government throughout Australia can agree that such a proposal is necessary to bring about economic recovery why do the trade unions not want to talk about it? I think it is significant to recall some of the decisions taken at the December meeting of the ACTU executive. One of the decisions taken was as follows:

If the Commission fails to make indexation meaningful the trade union movement will then be forced to make claims upon individual employers and as was said in August 1976, to examine whether there is any further point in continuing to participate in such proceedings.

I believe this is getting closer to the core of what the trade union movement wants. For a start it does not want wage indexation. It does not want to be tied down to legal guidelines that will prevent it from exerting its political muscle over all the people of Australia

What is happening right now? Two things are happening. First, we have a most disastrous strike in support of decisions taken by the ACTU. That organisation makes the claim that it wants to come to a national conference and talk. That is all hot air. What is it doing in practice? In Victoria we find that just about every motor vehicle is tied up because there is no petrol. Why is this so? It is because the Transport Workers Union wants an increase of $5.70 to make up for increases that the Conciliation and Arbitration Commission, in its wisdom, decided would not be granted to some workers. But the TWU says: ‘No. We are not prepared to accept the decisions of a properly authorised court. We will go outside that. We will go back to the law of the jungle. We will use our industrial muscle and we will show the people of Australia who is really boss.’ What is happening in Victoria at the moment is anarchy- the law of the jungle. Health and emergency services are tied up. Doctors cannot obtain petrol to enable them to attend to desperately ill patients.

These are the measures to which those people are prepared to go, not because they want to go to a national conference but because they want to use their industrial muscle to force this Government into complete submission. They believe that they have some divine right to be able to tell the Australian people what it is they should or should not have without having the responsibility of going to the polls every 3 years as a democratically elected government must do.

This is what the trade unions are aU about. They do not want the wage indexation guidelines. They do not want to be restrained by courts of law. I believe that the honourable member for Gellibrand (Mr WilliS) really let the cat out of the bag during his speech when he made reference to the Opposition’s stand on the Industrial Relations Bureau and the amendments to the Trade Practices Act. That is what the trade unions do not want, and it is what honourable members opposite do not want. They are not concerned about a national conference to talk about the economy, wages and prices. What they object to is being forced, by legislation, to be as responsive to the law as every other section in society. I put it to the honourable member for Gellibrand: Why do the trade unions not want to respond to the law? Why do they want to be outside the law? Are they trying to set themselves up as some sort of dictatorship in this country?

I challenge the honourable member to answer those questions because I believe that if this country is to realise its potential and the standard of living that it promises to this generation and to succeeding generations, the only way that we can accomplish those things is by having everyone in this country pulling together in the one direction. 1 believe that the Prime Minister and the Premiers at the recent Premiers Conference showed statesmanship that we have not seen in this country for a long time. It was one occasion that proved to the people of Australia that party politics can be put behind them if it means that Australia will be a better country. Quite obviously, Mr Hawke, and the Australian Council of Trade Unions are not prepared to do that. They do not have any interest in the people of Australia or in economic recovery and they are prepared to undermine any elected government as long as it suits their own political persuasion.

Mr DEPUTY SPEAKER:

-Order! The honourable member’s time has expired. The discussion is now concluded.

page 1221

INSURANCE AMENDMENT BILL 1977

Second Reading

Debate resumed from 3 1 March, on motion by Mr Eric Robinson:

That the Bill be now read a second time.

Mr VINER:
Minister for Aboriginal Affairs · Stirling · LP

- Mr Deputy Speaker, may I have the indulgence of the House to raise a point of procedure on this legislation. Before the debate is resumed on this Bill I would like to suggest that it may suit the convenience of the House to have a general debate covering this Bill and the Life Insurance Amendment Bill 1977, as they are related measures. Separate questions will, of course, be put on each of the Bills at the conclusion of the debate. I suggest therefore that you permit the subject matter of the 2 Bills to be discussed in this debate.

Mr DEPUTY SPEAKER:

-Is it the wish of the House to have a general debate covering the 2 measures? I will allow that course to be followed.

Mr HURFORD:
Adelaide

-The Opposition is not opposing these Bills. It supports them as being all right as far as they go. The Bills deal with the regulation of the insurance industry. Before addressing myself to the specifics of the Bill I will refer to a number of general issues concerning the supervision of the insurance industry. After the Labor Party came to power in 1972 it established a comprehensive system of supervision of general insurance through the Insurance Act 1973. The necessity for such supervision had been evident for a long time. Frankly, previous Liberal and National Counry Party governments- let us face it- because of their conservative nature and philosophy, had virtually ignored that need. It was left to a Labor government to enact the necessary legislation. The previous governments obviously had felt that the industry could regulate itself, a concept which too rarely works out in practice, however much we would like it to do so. A graphic indication of the inability of the industry to apply any sort of self-regulation which could protect policy holders in the way that we would want them protected occurred in the period between July 1970 and March 1973. In this time provisional liquidators of some 14 insurance companies were appointed. These companies had estimated assets and liabilities of many millions of dollars. In the period between March 1973 and June 1976 a further S companies were placed in the hands of liquidators. The collapse of all these companies meant severe hardship for many thousands of people.

The financial loss and the mental anguish these people suffered must, I believe, be laid at the feet of those who were tardy in bringing legislation concerning insurance up to date. Those people, of course, are the LiberalNational Country Party governments who governed this country for those years until 1972. It was not as if collapses of insurance companies were a completely unheard of thing. Overseas experience, particularly in the United Kingdom, amply demonstrated the necessity for continual monitoring of laws and regulations applying to the insurance industry. I must here pay tribute to my colleague, the honourable member for Hawker (Mr Jacobi), another South Australian Labor member, for his persistent actions in drawing to the attention of governments and, indeed, to the attention of this House, all the hardships being caused by the collapse of certain insurance companies. He has done the nation a service in this speciality of his. It is to be hoped that in the future conservative governments, such as the one we have now, will have learnt from the past and will recognise this necessity for more than just self-regulation if people are to be secure from hardships caused by failures. The Opposition welcomes the fact that the present Government has seen fit to continue Labor initiatives in the supervising of the insurance industry, as witnessed in these Bills. I refer, of course, to the changes to the Insurance Act rather than the Life Insurance Act, which has been in operation since 1945.

This attitude is a welcome recognition that market forces do not always work in everyone’s best interests. It is the proper role of governments to intervene, for instance, where regulations are required, for protection of policy holders. I might say, however, that given the Government’s recent attempts at managing-perhaps mismanaging is the more correct word- the economy through a number of ad hoc, regulatory and interventionist measures, the free enterprise business community might be forgiven for wondering whatever happened to the Liberal Party’s commitment to the market. I am, of course, referring to the interventionism of the so-called wage and price freeze which is before us at the present time, particularly now that it is compulsory and no longer voluntary in nature. This is hardly a natural outcome for proponents of the free market economy, but I will return to insurance.

The 1973 Insurance Act was, of course, only a start. Much still needs to be done. Constant monitoring is essential in the fields of both general and life insurance. I was pleased to see that the Minister assisting the Treasurer (Mr Eric Robinson) recognised this in his second reading speech to the Life Insurance Amendment Bill. He said:

The Government views the current set of proposed amendments to the Life Insurance Act as a forerunner to a much wider review to determine what kind of supervisory legislation is best suited to Australia’s life insurance in the future.

Those words I believe could equally apply to general insurance. The Australian Labor Party has of course recognised the need for a wide review of all aspects of the insurance industry and has taken steps to provide the Government with an ideal forum for such a review. We have placed on the notice paper for a general business day a notice of motion to set up committees of this Parliament to study both the life and general insurance industries separately.

Mr Jacobi:

– That is long overdue.

Mr HURFORD:

– It is long overdue, as the honourable member for Hawker said. I commend the proposal to the Government. The Government should facilitate the setting up of those committees. Many aspects of the insurance industry in general could profitably be subjected to study. These include such things as the criteria to be fulfilled by firms wishing to enter the industry, the application of the restrictive practices legislation to the insurance industry, the extent of foreign ownership and its implications for the domestic economy, general management efficiency and increased means of protection for policy holders. Insurance policy holders appear to be a group of consumers who have received little attention in attempts to frame consumer protection legislation. For example, methods of selling insurance often have been called into question. The United Kingdom has legislation which provides for the regulation of insurance advertising. Hopefully the parliamentary committees proposed by the Opposition to which I have just referred will be able to study these and other aspects of insurance and assurance in great detail.

I now turn my attention to the specific measures included in the 2 Bills currently before the House. The Life Insurance Amendment Bill 1 977 is to amend the Life Insurance Act of 1 945, which is the Act under which Australia’s life insurance industry operates. As the Minister pointed out in his second reading speech, this Act has been singularly successful in preventing failures among life insurance companies. The present Bill contains some 39 clauses, many of a technical and complex nature. As I have said, the Opposition is supporting this Bill as it contains a number of provisions necessary for the updating of the 1945 Act. However, there are a number of clauses about which we have minor reservations, and I want to deal with these. Clauses 6 and 7 of the Bill deal with the rights of life insurance companies to carry on business that is not life insurance. As the existing legislation stands the Life Insurance Commissioner does not have the authority to scrutinise or to examine the noninsurance activities of life insurance companies, except when an initial application for registration is made.

This Bill inserts proposed new section 16a into the original Act. This proposed new section will require life insurance companies to seek the approval of the Commissioner before carrying on non life insurance business. Proposed new section 16a (2) will instruct the Commissioner to grant approval unless the new business concerned is likely to ‘prejudice the interests of persons who are or become the owners of policies issued by the company’. This is a welcome move in the direction of protecting the rights of policy holders. In the present Act section 39 (2) stipulates that assets held within statutory funds that life insurance companies are required to establish under the Act cannot be invested ‘directly or indirectly in any share or interest in any company or undertaking carrying on life insurance business in Australia or elsewhere’ without the courts’ approval. Clause 10 of the amending Bill omits that section and substitutes another.

The new section proposed to be substituted will allow life insurance companies to invest assets of statutory funds in other companies engaging directly or indirectly in life insurance without the Commissioner’s approval provided the share component of the investment is 10 per cent or less of the recipient company’s paid-up capital and that the total investment is 10 per cent or less of the value of the assets of the recipient company. I am a little concerned at the extent of the relaxation of this provision, although I understand the Minister’s point that because of the wide portfolio of investments held by all life insurance companies the original section was not practical. Perhaps the new safeguards which, as the Minister put it, ‘will enable the Life Insurance Commissioner to oversight certain investment outlets’ will prevent any problems of the type which section 39 (2) was designed to overcome. It would be appreciated if the Minister assisting the Treasurer (Mr Viner), who is at the table, in his reply could give us more details about the safeguards and perhaps indicate what are the ‘certain investment outlets’ which the Commissioner will oversee.

The general investment policies of life insurance companies are of great importance to the economy as a whole as well as to the policy holders of individual companies. At 31 December the statutory funds of life insurance companies in Australia had total assets of almost $8.8 billion. Their investments totalled $5.1 billion and in 1975 there was an increase of $367m in the value of investments. It is in the interests of all sections of the economy that these large amounts of capital be invested in the best possible manner. The interests of the community as well as the policy holders must be borne in mind. Clause 36 of the Bill has the effect of allowing the fourth schedule of the Act to be altered by regulation. The fourth schedule of the Act is concerned with, among other things, the valuation of liabilities and consequently the value of dividends and bonuses paid from statutory funds. The reason given by the Minister for this change is the necessity to allow greater flexibility in periods of changing interest rates. The argument obviously is that it is impractical to make many legislative changes simply to modify numbers. Once again I appreciate the problem involved. However, I am concerned at a general tendency of the Government to use regulation and not legislation to effect change. I draw attention to the editorial of 4 January 1977 of the Australian Financial Review which highlighted this characteristic of the Fraser Government. The editorial states:

It -

That is in this case the Parliament- is the only institution we have capable of acting as some check upon an arrogant Executive or a bumptious administration. It is being treated with contempt by both.

That is, the executive and the administration. Of course the danger on the other side of the coin is that if the Parliament is inundated with legislation, members- remembering the inadequate staff and other facilities we have in this placewill have insufficient time to study carefully any legislation. Indeed, still on that other side of the com, we have to take into account that the vital changes necessitated by raging inflation may not be put through at all, at enormous inconvenience to the community, if we are waiting for legislation rather than regulation. A middle course may be to limit changes made by regulation as much as possible and have changes which are made in this way subject to study by a committee of the House. The Senate has a Standing Committee on Regulations and Ordinances. Perhaps it is time this House had a similar committee to study regulations.

With regard to the specific use of regulation powers envisaged in this Bill before us, the Opposition requests details of what the Minister sees as the criteria or indices for valuation changes which would be effected. Many other changes are made by this Bill but in general they are changes consistent with the evolution of insurance practice. I believe that there is no need for me to make any further comments at this stage on the details of the Life Insurance Amendment Bill.

The other of the 2 Bills in this cognate debate is the Insurance Amendment Bill 1977. The purpose of this Bill is to amend the Insurance Act 1973, the significance and history of which I outlined earlier. Most of the changes to the 1973 Act contained in this Bill arise as a result of the experience gained by the Insurance Commissioner in administering the 1973 Act. Clauses 5, 6 and 9 of the Bill relate to the Insurance Commissioner. Clause 5 brings the Commissioner’s salary within the determination of the Remuneration Tribunal. This is in keeping with salary determinations for other statutory officers. Clause 9 removes final control over the termination of the Commissioner’s appointment for the Parliament. At present, if the Commissioner becomes bankrupt or engages in paid outside employment, or takes leave without the approval of the Treasurer, the Governor-General is required to declare by notice in the Gazette that the Commissioner’s office is vacant. Once this is done, as things are at present, Parliament must be notified of the grounds for suspension. Parliament may then move for the Commissioner’s reinstatement. Under clause 9, however, this will no longer apply and, instead, power to dismiss the Commissioner for misbehaviour or incapacity will lie with the Governor-General only. The Minister, in his second reading speech, gave us no reason for this change. It must be seen as a diminution in the direct parliamentary control along the lines of the use of regulation powers to change Schedule 4 of the Life Insurance Act to which I referred earlier.

No mention was made by the Minister of the changes embodied in clause 6 of the Bill. They remove from the Act a total ban on the Commissioner engaging in outside employment. He may now do so if he obtains the Treasurer’s approval. I am curious as to why this change has occurred. Surely the Commissioner is paid sufficient by way of salary and other emoluments to prevent him needing a part-time job outside his job as Commissioner. No doubt the Minister for Aboriginal Affairs and Minister Assisting the Treasurer, when replying to this debate, will address himself also to this question which I believe is a proper one for us to raise when considering this Bill. Clauses 27, 31 and 33 of this Bill strengthen the hand of the Commissioner in communicating with the industry. They have obviously arisen as a result of imperfections which experience has shown to exist in the 1973 Act. They are to be welcomed as a logical extension of the intent of the original Act. I shall have more to say about this matter of communications with the industry in my concluding remarks.

The Minister announced that the as yet unproclaimed section 1 13 of the existing Act is to be modified. This section deals with insurance being sent to unauthorised insurers overseas through agents in Australia. I am relieved to find that the modifications require that clients be informed when insurance is being transacted through insurers outside the scope of the Australian Act. However, I wonder whether more than the information may be required for the protection of policy holders. I should like to learn more about this as well in the Minister’s reply. Let us face it, at the moment we are removing a protection. Although section 113, I suppose for practical reasons, has not yet been proclaimed, we must assume that when the Act came into being there was the intention to proclaim that section. Why are we watering down this section now?

Mr Jacobi:

– Perhaps we can get that information in the Committee stage.

Mr HURFORD:

– I have covered a number of the 39 amendments in this Bill. No doubt my colleagues will cover others in specific terms. The honourable member for Hawker suggested that perhaps one aspect should be covered in Committee stage. I look forward to contributions from the honourable member in the second reading debate to see whether we do go to a Committee stage. If we cover the points we wish to cover during the second reading stage, unless we have specific amendments, I doubt whether we will go to a Committee stage of this Bill. Perhaps the honourable member would like to do both.

Before concluding my remarks, I should like to refer to what I regard as an omission from the Bill. Unlike the Minister, I believe that there is a necessity for proposals relating to the establishment of new insurance companies to be examined on the basis of national interest criteria. I doubt whether arrangements designed to ensure the financial soundness of companies necessarily covers the needs of the national interest. The Minister’s assurance that proposals by overseas interests will be subject to the Government’s foreign investment policy is of no great consolation. The insurance industry is of such importance that it requires more than this. I trust that this point will be widely examined in the deliberations of the parliamentary committee which, I repeat, I hope the Government will facilitate setting up.

There are many other aspects of the general insurance industry which need to be raised. For example, there is the question of a scheme of natural disaster insurance. The Insurance Commissioner, in his 1976 report, regarded progress towards a national scheme as very important for the industry. Employers liability insurance is another area of importance which needs thorough investigation. The Opposition looks forward to the establishment of the committees I have mentioned and that are in our general business motions which will be able to perform such functions.

I end my remarks on a more personal note. There are many excellent Australians working at all levels of the Australian insurance industry. On behalf of the Australian Labor Opposition, I pay tribute to them. Theirs is a vitally important industry for very many reasons. The provision of security for policy holders and the savings which they generate for investment in this developing country of ours are just two of the important reasons for that great industry. I am one who does not want more legislation if we can possibly help it. I certainly do not judge the success of government on the amount of legislation it puts through. But this is an imperfect world in which we live. Consumers- policy holders- have to be protected. The industry is only as good as the most unscrupulous people in it. That is why, on balance, I and my colleagues in the Labor Party have to opt for the best possible protective legislation to the greatest extent possible created with the help of the good people in the industry. But it seems to me that there are still some bad people in the industry and self-regulation does not adequately provide for their activities.

Two areas in particular which require careful scrutiny are marine insurance and insurance brokers. I have a particular case on my plate through my electoral office which applies to both areas. That case has all the ingredients to cause one to claim that there is something rotten in the State of Denmark. I am not going to name names behind the cloak of parliamentary privilege at this stage because all of those involved have not yet had the time to reply to me and give me their side of the story. But it does no harm to state the story briefly because it very much relates to the protective legislation we have before this House. It involves the insurance of a boat for a large sum- $750,000. A broker filled out the proposal form for the client, my friend who has approached my electoral office. The broker in this case is also the main insurer although other companies are involved in the syndicate. The boat was burnt; it was virtually a complete write-off. From memory, the incident happened at least 2 or possibly 3 years ago, I think, in this month of April. Not a cent has been paid. Even if it has been 2 years since the incident that is bad enough, but if it has been 3 years that is worse. Why has the money not been paid? It is because the proposal form allegedly was not made out absolutely accurately. Having studied the matter closely, I assert that the inaccuracies do not affect the insurance risk in any way. They relate to whether or not a new engine which had been purchased for the boat had actually been placed in it at the time of the fire. But that is not the main point. If indeed the proposal form is wrong, who filled it out? It was the broker, who is also the main insurer. As I understand the law- I believe that the Minister Assisting the Treasurer is a lawyer; perhaps he may take a personal interest in this matter and give me some free personal advice -

Mr Viner:

– Kerbside opinions are always dangerous.

Mr HURFORD:

– I would never suggest that any opinion from the Minister was a kerbside opinion. I am sure that it would be one of great value. But as I understand the law, my friendsthese small people who are dealing with powerful insurance companies- are unlikely to win the case because of the very strict business about every detail on the proposal form being correct.

It shows all the signs of unscrupulous people taking advantage of bad law and not facing up to their responsibilities.

I repeat that the industry is only as good as the worst people in it, which explains the need for this legislation. We in the Australian Labor Party always will be prepared to talk to the industry. We believe that there was an unnecessary breakdown in communications at the time of our simple proposal to establish an Australia government insurance commission. It was a modest proposal, the main aim being to rationalise on a national basis those State government insurance offices which were prepared to come into the rationalisation, the federation. In our view our desire for fair competition between the public sector and the private sector would have left the insurance industry in some States in a better position than it is at the present time. That argment developed into an emotional one with neither side trusting the other. We do not want that to happen again. We pledge ourselves to keep the doors of dialogue open between ourselves as the alternative government- the next government of this country- and the insurance industry. In that spirit the Opposition supports this legislation and, I repeat, seeks further communication with the insurance industry about future necessary changes.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– I was interested in the friendly discursion on the part of the honourable member for Adelaide (Mr Hurford) concerning the insurance industry, but, no matter now friendly it was, it should not hide the fact that this industry is a crucially important one and there are certain matters that have to be looked at very closely in relation to events in that industry not just today but over fairly recent years. It is also appropriate to observe that the insurance industry in this country- the life section of industry as well as the underwriting section of the industry- operates somewhat in the British tradition and that in that tradition it has always had a very proud history. That is perhaps best examplified by the fact that when well known European consultants were asked to depict the best and worst aspects of British industry for viewers on the European continent they chose as the worst industry, for one reason or another but not due to personalities, the British shipbuilding industry, which had run into immense and enormous difficulties for a variety of reasons, and they chose as the best industries operating in the United Kingdom from an economic point of view the city and the insurance industry. I would like to think that Australia operates somewhat in that tradition.

The second report of the Insurance Commissioner is a very valuable document. As the years go by the value of that document will become more and more apparent. That document makes it perfectly clear that over recent years- in this regard I am referring to the first piece of legislation before the House- the insurance industry has itself run into quite immense and-‘ enormous difficulties. I believe that those difficulties can be summed up in one proposition, that is, the difficulty of allowing for future provisions in terms of payments from the insurance industry. I am not referring to particularly great natural disasters, which I put aside and which are to be considered in a separate way. Cyclone Tracy, the Brisbane floods and so on are quite a separate matter. But the difficulty is one of providing and making assessments for future provisions in the industry. I believe that it is worth while philosophising on that for just one moment.

The difficulties of that industry occur because of the distance between the act of insurance and the claim on account of which the insurance was first negotiated. Insurance is negotiated at a certain moment in time. It is negotiated for a contingency. That contingency may or may not arise. The difficulty is that if it does arise it will arise for some undetermined payout and for an unknown amount. I believe that that is made perfectly clear by the Insurance Commissioner’s report that there are 3 areas of insurance that have been operating at very substantial losses. I refer to workers compensation insurance, motor vehicle insurance and compulsory third party insurance. For example, according to the Commissioner’s report, the losses in 1974-75 in respect of those areas of the Australian insurance industry amounted to $128m. That is an absolutely enormous amount. The difficulty is simply to relate ultimate benefits to payments that occur in order to enable those benefits to be met. Some of those benefits have been seen increasingly by governmentsvery much by State governments as well as others- as welfare payments. We come therefore to a very important principle, namely, to what extent is the insurance industry to be tied in terms of either its short term obligations or its long term obligations to the welfare principle? I do not believe that that can be totally ignored. It ought not to be ignored.

It is for those reasons that I am pleased with a couple of aspects of the Bills presented by the then Minister Assisting the Treasurer (Mr Eric Robinson) concerning which other questions will be asked during the Committee stage. I am delighted that some of the solvency provisions that affect the underwriting companies, if I can put it that way, are being liberalised and will in fact help a number of those companies. I refer to the Minister’s comment:

Thirdly, it is proposed that insurance companies be able to omit from the calculation of their annual premium income for purposes of the Act amounts they have collected for onward transmission to the States or Territories in the form of fire brigade levies, stamp duties and other similar charges.

I believe that is perfectly reasonable. What effect is that going to have on the capacity of these companies to meet their obligations? Their premium income is of the order of a couple of thousand million dollars a year. Their payments in terms of stamp duties, fire brigade levies and so on were of the order of $130m to $140m in 1975-76. That sum is to be omitted for the purposes of those calculations. When in addition to that one adds the 15 per cent solvency ratio one can see that it is going to assist them in terms of their payout by something of the order of $ 1 40m, $150m or $ 160m on the 1975-76 figures. So that much less in assets has to be provided for according to the legislation. That means that that much more is available to be distributed to those who will be the welcome and sometimes the unhappy recipients of the payments of these insurance companies. I believe that there can be greater explanation of some of those details in the legislation. The situation may be summed up by saying that the difficulties of this industry depend upon the overwhelming truism and simple fact that it cannot run an unfunded scheme and that the nature of the funding of that scheme lies at the heart of what one considers in relation to any insurance industry.

I would like to read into Hansard one or two appropriate comments from the second report of the Commissioner. I refer to page 9 -

Mr Jacobi:

– Which one- general or life?

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

-General. Life will receive attention in a few moments. Referring to the difficulties of the companies, on page 9 he said:

There are minor matters relating to the magnitude of adjustments made but -

This is the crucial point- in 2 years the private sector has increased its total provisions for meeting outstanding liabilities to policy holders in respect of claims from around $514m at 1 July 1973 to $691 m at 30 June 1 974 and to $987m one year later. These latter amounts represent 45 per cent of total liabilities in 1 973-74 and 52 per cent of total liabilities in 1974-75. Notably provisions to meet workers compensation claims have more than doubled from $200m to $438

In one or two sentences the Commissioner epitomised the very great difficulties and burdens of that industry. Therefore it needs help and reasonable supervision. It receives some significant help in this respect.

I turn to the Bill to amend the Life Insurance Act. The amendments in the Bill are only part of some much larger amendments which are foreshadowed by the Minister. We should not gloss over the enormous problems the life insurance industry has endured over recent years. It has endured enormous problems. Perhaps I am taking a risk in introducing some political content into this debate, but it has to be done. The Life Insurance Commissioner in his last annual report on page 8 said:

The total number of new policies issued continued to decline from the record number of policies written in 1 972. The rate of decline was only 2.3 per cent this year as compared with 7.5 per cent last year, and it is possible that over the next one or two years a definite upward trend will re-emerge.

We hope that it does. Unless I am a month or two behind, the monthly statements of the Australian Statistician on policies surrendered and discontinued show a disturbing propensity towards a continuing increase. That has to worry anybody concerned with the industry and what it can do for Australia. After all, it is some ways the largest single organiser of capital available or put on to the Australian market. Therefore it has to be treated sensibly and should not be made a source that can be plundered from time to time.

It needs to be repeated that a number of changes were made in the treatment of life insurance from 1972 on which were to the detriment of the industry and therefore of those who held policies. I will just go through some of the difficulties and problems. Firstly, under the actuarial liability arrangement the amount of assets exempt from tax was reduced from 3 per cent to 1 per cent. Secondly, the rate of tax on the companies was increased. As a result of these 2 provisions in the budgets of 1973 and 1974, on simple calculations in those years at least $2 1 5 m and $200m less was available for distribution to policy holders. I believe, and I say this without any emotion, that the previous Government made a severe mistake in making those provisions.

It also made a number of other taxation provisions to the disadvantage of life insurance companies. The proposition one which attracts most comment from the life insurance companies deserves to be mentioned because I do not totally agree with it. It is that the automatic tax rebate introduced in the 1975 Budget acts as a severe disincentive to those who would take out life insurance. I look at the matter itself. I am in favour of there being an automatic rebate of some size for taxpayers because there is evidence that those on lower incomes have not been utilising all the provisions available to them to claim taxation concessions. Therefore the automatic rebate deserves to be retained in some form or other. Whether or not it should be indexed is another matter to be determined.

The other proposition which attracts the attention of those concerned with life insurance concerns the $1,200 tax deduction for life insurance. These 2 propositions concerning the automatic rebate and the $1,200 tax deduction impinge on one another. It is alleged that the $1,200 tax deduction cannot be taken advantage of as much now as in the past, but this depends on the extent to which the tax concession of $1,200 was the principal reason for taking out life insurance in the first place. If some method could be found for separating the effect of a $1,200 deduction on insurance that was taken out with the concession in mind and the effect of an automatic rebate specially for those on low incomes, who quite obviously have been claiming less in tax concessions than one would expect they should be able to claim, not only would a service be done to economic equity, but also a significant service would be done to the life insurance industry itself. Above all, it needs to be remembered that the previous Government regarded the life insurance industry as an industry that could be raided and disadvantaged. It did not see it as an essential handmaiden of industry and people involved in industry. It should have done so.

There is one other provision in this legislation to which I would like to direct one or two comments during the Committee stage. It is the provision involved in clauses 36 and 16. They enable regulations to be made in terms of the Fourth Schedule. I am referring to the provision for the minimum valuation basis for judging the return on assets of life insurance companies. It is quite clear that at 3lA per cent that minimum valuation is too low, and because that is significantly below what is earnt on assets and investments by life insurance companies too little is returned to policy holders. On the facts of life it is less than what ought to be the return on premium incomes available to policy holders.

The proposed amendments in the Bill give too much latitude. They merely stated that the schedules can be amended. It does not have to be by legislation. The Fourth Schedule may be amended effectively by regulation. I pose this question: In what direction may the valuations be amended by regulation? May they be amended upwards or may they be amended downwards? It might be said, and no doubt it would be said: ‘We would not amend them downwards. We would have regard to the index of investment returns published in the Life Insurance Commissioner’s report. We would amend them in accordance with that’. But that is not provided for in the Bill. Those who have investments in life insurance companies ought to receive a guarantee as to the direction in which those amendments would be pursued. They have that right. They see it in accordance with common sense. The Insurance Commissioner develops a very useful index for the return on investments of the various classes of the life insurance companies, and it ought to be utilised.

Another part of the schedule is quite crucial and affects the returns to policy holders. The mortality tables are to be brought up to date and more recent mortality tables are to be utilised. I ask: Which mortality tables are to be utilised and how up to date are they likely to be? It is clear from the recent life tables put out by the Australian Government Actuary, Mr S. Caffin, who has about 25 letters after his name, that the rate of mortality for one period as a proportion of the mortality of previous periods can vary quite significantly. Therefore if one is over-conservative in utilising mortality tables which are dated policy holders can be disadvantaged and the maximum amount which should be returnable to them would not be returned.

I believe that both these Bills are very interesting and that they will attract a lot of comment at this stage and in the Committee stages. I will be interested to hear some assurances from the Minister in respect of their administration, certainly in relation to the numerical amounts involved in Schedule 4 of the Bill. In some ways they are clearly the key to the Life Insurance Amendment Bill. They give it substance and soul, and rectify some of the inequities of the past. I believe that policy holders in Australia, in an industry which has assets of $8,000m-odd, should be able to see that both these amendments are made in accordance with the most recent modern practice and experience in the field of investment and in the field of mortality tables.

Mr CREAN:
Melbourne Ports

– Whilst I might agree with my friend the honourable member for Lilley (Mr Kevin Cairns) in a lot of the things he said, I do not agree with his idea that there should be an extension of the amount deductible for income tax purposes for life assurance premiums paid.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– I did not say that.

Mr CREAN:

-He did not quite say that but he was getting pretty close to saying that $ 1,200 was not adequate. I point out that that is in the region of $23 a week, and I do not think that the proportion of the Australian public which is able to save that amount is very high. Equally I do not think that the honourable member acknowledged the advantages which have been given to life insurance by the fact that the tax deduction has been allowable. Candidly, if we were starting off in 1977 as though life insurance had never been invented, I am sure we would not embark upon it in anything like the same way. The life insurance industry collects something like $ 1,300m annually in premiums, and I take these figures from the most recent report of the Commissioner for Life Insurance. It collects $7 15m in annual premiums from ordinary business, $553m from superannuation business, and oddly enough it still collects $58m from that curious and highly expensive area called industrial business. That is about $ 1,300m in aggregate, and when one goes a little further into the tabulations one finds that the average interest rate earned on the vast funds which have accumulated over the years is 6.63 per cent; surely a very poor return these days. The next table shows the expense rates for the various types of business -

Mr Goodluck:

– It is very complicated.

Mr CREAN:

-It is complicated. Ordinary insurance costs 32.1 per cent of the premiums to collect, superannuation costs 13.4 per cent, and industrial 37.4 per cent. In other words, on the average it costs over 30 per cent to collect that $ 1 ,300m. When one looks at the revenue forgone by the Government in allowing the concessions for the subscriptions to the policies, the means of organising the funds collected are even less efficient. I do not want to canvass that point very much further, except to say that I hope in the major task of modernising the Life Insurance Act, to which the Minister referred in this speech, some consideration will be given to a wide public examination of the matter. Perhaps linking insurance premiums to tax deductions is the only thing that makes the industry viable, but I think that is a socially inequitable way of doing it. It has been the accepted way in the past, but irrespective of whether the taxation concession is varied I think that the life insurance industry has to examine closely its own future and the terms on which it is likely to be viable. After all, the original purpose behind life insurance was that there was no other provision for retirement or early death. Other arrangements are now made, and I suggest that perhaps the time is right for insurance companies to consider getting out of certain forms of life insurance and looking at more sensible new approaches. I think that the companies are tending to do that. After all, the biggest revolution which has taken place, and it is a very efficient change if one looks at the expense ratio, is that the insurance companies have gone into the superannuation business rather than the old form of endowment and term policies. It is interesting at least to note that gradually superannuation annual premiums are begining to overtake the rest, and that move has also been assisted by taxation because the contribution of the employer is tax deductible in his books, which makes the proposition much more viable.

I submit that there is a need for a very comprehensive re-examination of the role of life insurance in 1977. 1 got into some hot water with the insurance companies during my term as Treasurer because I urged this upon them. It is easy to say that the tax law can be altered. We could have altered the tax laws much more than we did. Candidly, what we did, arising out of the recommendations of the Coombs Task Force, was to remove what had previously been regarded as an anomaly, but all the belly-aching which went on amongst the insurance companies about that rather minor part of the total situation I think took their minds off the reality of how they are to survive in the next 25 or 30 years. I believe that there is a role for them, but 1 think it is very different from the role they have played in the past.

I want to talk mostly about the other arena of insurance in Australia. I do not think it is always realised that the premiums paid by individual policy holders to life insurance companies are far less in aggregate that the annual premiums paid by the same population for other forms of insurance- fire employers’ hability and so on. In fact, 3 categories mentioned by my friend the honourable member for Lilley and referred to on page 20 of the admirable report of the Insurance Commissioner, if I might agree with the honourable member, show a major loss. Motor vehicle insurance showed a loss of $40m for the year ended 30 June 1975, compulsory third party insurance showed a $36m loss and employers’ liability insurance showed a loss of $43m. The report of the Insurance Commissioner goes on to state:

Losses in these 3 classes accounted for nearly 90 per cent of the underwriting losses other than those arising from Cyclone Tracy. The figures show that in these 3 classes, for each dollar of earned premium, the claims and expenses absorbed:

The report cites the claims and expenses absorbed for every dollar of earned premium in the case of motor vehicle insurance as $ 1 . 1 3. So it is not a very viable form of endeavour unless the premium is increased. For compulsory third party, $1.74 was absorbed for each dollar of earned premium and for employers’ liability, $1.13 was absorbed for each dollar of earned premium. The report goes on to state:

These 3 classes accounted for more than 60 per cent of all the premiums earned by the private sector in Australia in 1974-75.

However, one of the greatest organised objections to the Australian Labor Party in the last election was on the part of employees of insurance companies. Candidly, I thought that the companies would have been glad to get out of these 3 areas of insurance -

Mr Jacobi:

– They are out of most of them now.

Mr CREAN:

– The companies are out of most of them and the Insurance Commissioner draws attention to that. Companies in the private area are not accepting compulsory third party insurance any more. What has not been said about employers’ liability insurance is that instead of compensating workmen, which is what the aim originally was, the people who are most compensated are the lawyers and doctors in the course of the proceedings. What the present Leader of the Opposition (Mr E. G. Whitlam) had in mind when he was Prime Minister was to pass an Act that would take this matter out of the insurance area. My friend opposite, the honourable member for Lilley, thinks that he could somehow separate the welfare part from the rest. Candidly, I do not believe this can be done. I think that accidents in Australia are becoming what might be called ‘uninsurable risks’. They arise out of incidents, primarily concerning motor cars and the bad social habits of many of their drivers. I do not know how we can insure against this. Surely there ought to be pity for the innocent victims at times. He should not have to turn to the law to prove what were the obstacles that caused his downfall. I think that one of the most sensible things suggested for the Australian community is national superannuation that would at least cover everybody through life and in retirement. If people want to insure their lives in other ways, they can do so. But they should not expect assistance from the taxpayers generally for so doing.

I believe equally that in this area of employers ‘ liability the matter is a social one now rather than an insurable one. I am afraid I have a somewhat different view in this respect than some of my colleagues on this side of the House and the Insurance Commissioner who is the author of this report- about national disaster. I do not think that it is insurable. It occurs and when it does occur its effects are cataclysmic. Living in the area in which I live- 50 yards from the beach- I will not insure against drought. Those who live in the Mallee are not likely to insure against flood. Fortunately cyclones never occur where I live. Their effects would not be felt in Hobsons Bay even if they did. When we talk about natural or national disasters, we must remember that is what they are. They are things that happen that cannot be insured against. In my view, inevitably, it will be the Government that has to pick up the tab when they occur. To think that somehow it can be made a new area of insurance is beyond me. I know that my friend, the honourable member for Hawker (Mr Jacobi) does not agree with me on this. I agree with him on most things. This whole area has been talked about very glibly. Unfortunately, Cyclone Tracy occurred and was preceded very shortly by the Brisbane floods. Certainly, such disasters threw the reinsurance area in Australia into a tailspin.

I also want to draw the attention of honourable members to the table on page 28 of the Insurance Commissioner’s report. He gives the total underwriting expenses to premium income for the various forms of insurance. For every $ 1 paid in premiums for fire insurance, expenses took up 53 cents. For house owners and householders insurance, 53.2 cents of the underwriting dollar was absorbed as expenses. The position in regard to contractors’ insurance was a little better at a shade under 40 cents in the dollar. In maritime insurance, underwriting expenses for each dollar of premium amount to 29.27 cents. For motor vehicle insurance, the figure is 26.9 cents and for compulsory third party insurance, it is 18.27 cents. The reason that latter figure is lower than the others is that nearly all such insurance is now taken out with government insurance offices which have a much lower rate of expense to premium income. For employers’ liability insurance, 22.49 cents expenditure was incurred for each dollar of premium collected. For public liability insurance, the figure is 40.28 cents and for other categories of insurance, it is 41.33 cents. Does not this sort of thing point to the need for further rationalisation of insurance other than life insurance?

One good thing has happened because of the insurance legislation to which the Insurance Commissioner draws attention. Previously, there were approximately 400 operators in the general insurance area. That figure has now been halved and is down to about 200 operators. Perhaps there is a case for that number to be even less. What can be more silly than a television advertisement telling people that somehow one company has, for example a better form of fire insurance? Insurers at least ought to ask what is the cost of that advertisement and how many cents from each dollar will be taken out to pay for it. But I am afraid that members of the public are still unduly influenced by the blandishments of advertisers who persuade them that commercial television cost them nothing. These advertisements cost consumers a great deal of money in terms of the end prices.

These areas are sensitive and I would not like to say at the moment what I think is the overall position of the insurance industry, other than life insurance. I simply ask honourable members to read carefully the total assets of all these 200 non-life companies and at the same time the total liabilities. The difference between them is in the region of $430m. The industry has lost that sum totally in the last 2 years. Whether this gives it a sound margin if it continues to operate in all the areas I leave to the imigination of honourable members. However, I agree with my friend, the honourable member for Lilley, that at times we should have more opportunity to debate this matter in detail. I have no objection to most of the proposed amendments. However, I point out one with which I do not agree. I do not agree with putting what is not the Insurance Appeals Tribunal under the more general control of the Administrative Appeals Tribunal. It might sound nice and tidy to do that. But the idea of an Administrative Appeals Tribunal was a body for the ordinary citizen to approach when he is aggrieved about something that happens in some government department. But the disputes that arise in insurance are of a technical nature. A tribunal that might be a good one for a general administrative difficulty might not be the right sort of tribunal- certainly it is not in my mindfor a complicated difference of opinion between an insurance company and the Insurance Commissioner. I suggest that the Government ought to have a look at that. Perhaps it was carried away with the euphoria of giving the Administrative Appeals Tribunal something to do. Perhaps it has not had as much work as it was thought it would have. That is a specialist area for dispute and it ought to be so treated. So, I leave it at that. I understand that there is some hurry to finish the second reading debate and to proceed to the Committee stage. However, it does seem to me to be a very large and a very complicated area.

Mr Bourchier:

– Would you like an extension of time, Frank?

Mr CREAN:

-Yes, I would not mind it. I could speak for 20 minutes first on life insurance and then on general insurance. But perhaps serious attention ought to be givn to the proposition that there be a general inquiry into the future of insurance in Australia in all its aspects. Such an inquiry could take a year or two to complete, but it could begin to answer sensibly some of the questions that have been raised by my colleague, the honourable member for Adealide (Mr Hurford), and which will be raised by the honourable member for Hawker (Mr Jacobi) from South Australia and which have also been raised by an honourable member from the other end of the continent, Queensland.

Mr DOBIE:
Cook

– I rise to speak on the 2 Bills before the House, one of which amends the Insurance Act of 1973 and the other of which amends the Life Insurance Act 1945. 1 believe that the honourable member for Lilley (Mr Kevin Cairns) gave a very good account of the background of the insurance industry. Before I address myself to the Bills I would like to say that in general terms I support my friend, the honourable member for Lilley, in his statement about the principle of maintaining a tax rebate system in one form or another- I underline the words ‘in one form or another ‘-for those on low incomes. I do not know that the present form or that introduced in the 1 975 Budget in any way meets any ideal, but the system as described by the honourable member for Lilley does in fact encompass my views.

I was a little surprised when I heard the previous speaker in the debate, the honourable member for Melbourne Ports (Mr Crean), talking about the use of advertising in the insurance industry. Although it was not my privilege to sit in this House during the 3 years period that he occupied the front bench on this side of the chamber, I must say that between 1972 and 1975, as an ordinary citizen I was constantly amazed at the amount of advertising that was done by the then Labor Government in regard to monopolistic governmental activities in the community. I had difficulty in relating the level of government advertising for something that was provided only by the government of the day with his comments today about the costs involved for policy holders in the private insurance industry. If we had a monolithic, central, monopolistic government insurance corporation, which the Labor Government tried to achieve, I venture to say that there would have been as much advertising for that as the socialist government used for all its purely governmental activities between 1972 and 1975.

Mr Bourchier:

– And the taxpayer would pay for the lot.

Mr DOBIE:

– As the honourable member for Bendigo says so properly, the taxpayer and not the user would pay for it.

The Bills before the House are interesting in the sense that one is designed to amend one old Act and the other is designed to amend a new Act. A further interesting aspect is that both Acts were introduced by Labor governments. I can only hope that the Insurance Act 1973 proves to be as good an Act as the Life Insurance Act 1945. That has been proven to be a good Act. It has been, I believe, an effective supervisor of the life insurance industry. We have not seen the collapse of any life insurance companies during the period of its operation. Despite the aberrations of the 1972-75 period-I venture to say that for insurance purposes we cannot classify that period as a national disaster- I suppose it would be fair to say that there has been a need to update some aspects of the Life Insurance Act.

It is not my intention to deal with that matter at length at this stage. I believe it will be taken care of during the committee stage. However, I am pleased to see that it is proposed to increase the amounts governing payments of policy proceeds from $2,000 to $6,000. For the benefit of those people who read Hansard and those people who may be listening to the broadcast of these proceedings at the moment, that means that the amount of a policy that can be paid without taking probate or letters of administrationthat involves a long process for beneficiarieshas increased from $2,000 to $6,000.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– Is that large enough?

Mr DOBIE:

-I take the point made by the honourable member for Lilley. The amount of $6,000 is below the level of the average policy being taken out today.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– And the surrender value too.

Mr DOBIE:

– The honourable member mentions the surrender value as well. I think the point to be made is that the increase is a step in the right direction. I believe that it will cover a very large proportion of policies already held. So, to that extent, I believe it does have merit. Like my friend from Lilley, I hope that we will move to larger amounts as time goes by.

Another proposed amendment to the Actprevious speakers have touched on it- is to be found in clause 36, which will enable changes to the minimum valuation basis in the Fourth Schedule to the Act, which covers the valuation of liabilities under policies, to be made by regulation. Although I can understand the honourable member for Lilley wanting some indication of the direction which the amendments will take, I do support the principle of the regulation-making power being brought into this Act. I think there are advantages to be gained from it. The point is, I think, that we have to keep up to date with interest rates and mortality tables and the expenditure made on selling policies. As most honourable members would realise, that would mean that policy holders would benefit in the sense that the life insurance companies would have larger surpluses. Although it will be the responsibility of individual life assurance companies to determine these matters, it should manifest itself in better bonuses for policy holders. I take the point raised by the honourable member for Lilley: It is important to know which mortality tables are going to be used.

I think that we should bear in mind that these Bills are essentially technical. I do not believe that the second reading debate is the occasion to become involved in their detail. However, I point out that I support totally the updating and improving of what has been a very successful Act, namely, the Life Insurance Act 1945. 1 support also the principle of moving the appeals machinery to the Administrative Appeals Tribunal. Obviously I disagree with the previous speaker in that regard. Although I would like to bow to his greater experience, I am afraid that I cannot. I support what is proposed.

I shall take only a short time to deal with the other Bill which is concerned with general insurance. The amendments proposed are even more technical than those proposed to the Life Insurance Act. I believe that they will strengthen the administrative machinery and overcome a number of weaknesses to be found in the 1973 Act. They will have the effect of allowing the Government to collect information on the amount of business being sent overseas by, for example, brokers and agents. While I am informed that that is essentially an informationgathering exercise, I can only hope that it does not frighten off the continued practice of sending premium business overseas. As was shown by the cyclone Tracy experience, that practice does work very heavily to Australia’s advantage. I think it should be realised that something like two-thirds of the cost of the Darwin disaster was borne by overseas reinsurers. I think that people of all political persuasions have to be very careful in introducing legislation which may damage the close relationship we have with overseas reinsurers, particularly British reinsurers.

I ask the Minister for Aboriginal Affairs (Mr Viner), who is sitting at the table, to be cautious in any future moves that may take place which could damage the practice of Australian brokers and agents re-insuring overseas. It is very easy to be nationalistic and to talk about insuring ourselves and keeping our premiums. But Darwin has shown the dangers in such thinking. I would like to take the liberty of quoting from the second annual report of the Insurance Commissioner. I doubt whether he has been quoted more often than he has on this occasion. I refer in particular to page 34 of the report where he refers to the national disaster insurance scheme which, of course, is what everyone in this place should have in mind when talking about general insurance. There may be differences of philosophy in regard to general insurance. I almost said ‘theology’ because insurance has been put into the ranks of theology by some people on both sides of the political scene in this country -

Mr Crean:

– In this secular age not so many people blame God.

Mr DOBIE:

– Which God does the honourable member have in mind? The scene is such that even the Insurance Commissioner makes certain that he mentions in his report the great difficulties in establishing a national disaster insurance scheme. One of the things that gives me hope is his statement that the insurance industry representatives have co-operated closely in the work done towards developing a suitable disaster insurance scheme.

I think that what we have to bear in mind and what we have to be very sensible about is the proposition that the insurance industry is perhaps the best vehicle we can use to come to a solution in regard to natural disaster insurance. I put it to the House that I do not believe that any government department will ever have the real expertise to find a solution itself. I believe that we cannot find a suitable natural disaster scheme complex and difficult as it will be to find, without the full and continuing co-operation of the insurance industry itself. If we want any reminder of that we need only look at the damage that was caused in Darwin by cyclone Tracy. We need look no further than even the occasional earth quakes that occur in Western Australia. the State from which my friend the honourable member for Swan (Mr Martyr) comes. Overseas re-insurance has been to our great advantage.

Mr Deputy Speaker, I resist the temptation to speak further on the Bills we are now discussing. I have given an undertaking to my Whip that I will limit my remarks. I believe in essence that the amendments to the legislation are necessary. They have been introduced to overcome the teething problems of the 1973 Act which was brought in sincerely. Although we are proposing regulation making powers in this legislation this House, and hopefully more honourable members than are sitting here at the moment, will have to take a greater interest in this area because, as the honourable member for Lilley said, insurance cannot be looked at in isolation; it has to be regarded as part of our general economic situation. Any economic policy of this country needs to include a solution to the problems of insurance. I strongly support both Bills.

Sitting suspended from 5.59 to 8 p.m.

Mr JACOBI:
Hawker

-Whilst I support the amendment to both Bills, I must confess that I do so with some sense of concern and reservation, particularly with regard to some of the matters raised by the honourable member for Lilley (Mr Kevin Cairns). I am not impressed with the transfer of many of the provisions in the Act, particularly the Life Insurance Act, to regulations. I would prefer them to remain subject to parliamentary scrutiny. However, I indicated earlier that there are a couple of matters dealing with clauses 28 and 113 that I want to raise during the Committee stage. I warn the Minister for Aboriginal Affairs (Mr Viner) in advance of my intention to do so. I was interested in some of the comments made by the honourable member for Lilley. I might say at the outset that we are dealing with an industry which in this country is as large as, if not larger than, the vehicle building industry and which has very important consequences whichever way we look at it. The honourable member made the observation that in Britain there are 2 industries, one good and one bad, the bad one being the shipbuilding industry, the inference from his analysis being that the good one is the insurance industry.

I think there are some pretty cogent reasons why the insurance industry is rather well established in Britain so far as its invisible earnings are concerned. I think it is the largest industry in Great Britain in terms of invisible earnings. I think one of the reasons is that it is not subject to the same tax imposts as we have in this country with our rather constructive federal system. Apart from that, I commend to the honourable member a study of the recent rather voluminous amendments to the Acts in Britain in 1973. I must confess that until then the industry in that country was not all that good. I think the industry itself might have been all right, but the surveillance in Britain was not quite so good. Regrettably, the provisions were rather fragmented between the Insurance Act and the Companies Act. It was because of the collapse of companies in the insurance industry, such as the vehicle and general companies that the amendments came about. The lack of surveillance provisions in the British Act largely resulted, I think, in the collapse of vehicle and general companies in Great Britain and this had after effects in Australia also.

They found in 1973, as undoubtedly we found, that both Acts had been overlooked and forgotten until a crisis stage was reached. It is one of the tragedies in this country that we pass Acts and then consider that we have finished our obligations. I suggest to the Minister that this is one industry where we should not be permitted to do that. It is an industry that should be subject constantly to surveillance. The other observation which the honourable member for Lilley made was with regard to workmen’s compensation* compulsory third party and motor vehicle insurance. He knows as well as I do that it is a dictum of private enterprise that you socialise your deficits and capitalise your profits. This is what is termed in the insurance industry as ‘the sink end of the market’. In nearly every State that deficit end of the market is being handed over to government insurance commissions.

I would like briefly to make some constructive comments on some of the measures contained in the Bill. I think the honourable members for Melbourne Ports (Mr Crean) and Adelaide (Mr Hurford) covered what I think is the necessity to liberalise some of the solvency provisions of the Act, so I do not intend to canvass that point. But one matter upon which I would like to pass some comments concerns stamp duty and fire brigade charges. As I understand it, Australia and New Zealand are the only countries that levy fire brigade charges on policy holders. Frankly, I think it is high time the procedure was updated as such charges ought to be taken from Consolidated Revenue. To do so would be more effective and efficient, and certainly more equitable. Above all, the States would have to justify the increases in costs if the charges were taken from Consolidated Revenue. At present there can be an increase in the levy with no attention at all being given to efficiency. Stamp duty is an unfair imposition on policy holders and I intend to deal with that when I come to clause 1 13. I think it ought to be understood throughout the length and breadth of this country that an impost such as the fire brigade levy is borne by the insured and not by the insurer.

At the moment, in my State of South Australia at any rate, fire brigade levies constitute about 22 per cent of the premiums. I think it is time that that aspect was looked at constructively throughout Australia. The same thing could be said of stamp duty which is a source of income to the States but again, is an imposition that is borne by the insured not by the insurer. I have undertaken to cut down my time as much as possible so I would like to make only a couple of other quick observations. May I draw the attention of the Minister to the fact that I find it rather odd that the surveillance provisions, in terms of investment, will apply to life companies and not to general insurance companies. I find that a gross omission. I do not find anything in the Minister’s second reading speech as to whether the Government will have the same surveillance over investments for general insurance companies as it will have over life companies. My analysis of the some 16 companies that have gone into liquidation is that their situation has been as a result of 2 things- managerial incompetence or investment incompetence. I think that is an area at which the Minister should look.

The other matter which I raise briefly is that I agree wholeheartedly with the honourable member for Melbourne Ports in that I do not think the Administrative Appeals Tribunal is an appropriate tribunal to deal with appeals in this area. I think they are far better and more adequately catered for under a more independent tribunal. I turn to that part of the second reading speech of the Minister which deals with life insurance and I would like to put 2 questions to the Minister. The speech states:

It is proposed to strengthen the supervision over registered life insurers. The Bill requires them to seek permission from the Life Insurance Commissioner before they commence a form of business other than life or general insurance. However, the Commissioner will not be able to refuse an insurer permission to enter non-insurance area unless he is satisfied that such entry would be to the detriment of existing or prospective policy holders.

The question obviously to be asked is: What is the situation if the insurer is satisfied that it will not be to the detriment of policy holders? Will the decision of the Commissioner in this case be final and irrevocable? If not, what procedure will take place in that circumstance? The second part of the Minister’s second reading speech states:

The existing legislation provided that a life insurance company shall not invest directly or indirectly in another such company.

The statement goes on. As I understand it, most investments by life office companies in particular have never reached the stage where they have felt obligated to undertake directorships. I want to deal briefly in the limited time I have available to the question of investments. Since I entered this place in 1970 I have tried to get 2 areas covered legislatively sufficiently to protect policy holders, whether of general or life insurance. One area is the need for greater surveillance over investments by insurance companies and the second is to have legislative reform in the area of competency of directors or actuaries attached to insurance companies. I suppose it is fair to say that experience overseas of policy holders has shown that poor management and speculative investment has cost policy owners very dearly in this country, the United Kingdom and the United States. As the honourable member for Melbourne Ports pointed out, the average return on investments to life companies is approximately 6.6 per cent. I suggest that is not good investment policy. It is a characteristic of life offices that their investment performance leaves a lot to be desired. Unfortunately it is not possible to demonstrate this by published statistical information. We may get that in some years to come.

The type of inefficiency probably can be best indicated by examining the activities of life offices over the past years in 4 main areas of investment. I suggest that the Government ought to have a look at them. Those areas are: Public securities, fixed interest lending, ordinary shares and property. If we take those four together and analyse them the record does not stand up well at all. The Income Tax Act does not oblige life offices to invest 30 per cent of their assets in government or semi-government securities. It is correct to pursue a policy where such investments are long dated because the liabilities of the offices are of a long term nature. However, if it is anticipated that long term interest rates will rise proper investment management principles would indicate a shift from long dated to short dated stocks with a shift back to long dated stocks once the increase had been achieved. Whilst the nature of the Australian capital market precludes switching of the large amounts of stocks already held there is no reason why an office, when subscribing to a new government loan, should not restrict itself to the short end if it thinks those rates will rise. Over the last decade there has been a pattern of steady rise in interest rates. Yet except perhaps for a few exemptions in the last few years all offices appear to have invested automatically in long dated stock and have suffered a substantial fall in capital values as a consequence.

I suggest that the following ought to be noted: In the case of fixed interest lending a significant consideration often has been whether granting of the loan will facilitate the writing of new life insurance business. I think that is worth repeating. In such cases loans have been made on terms less remunerative than in alternative situations available in the market place. As is explained elsewhere, far from being a compensating factor for this lower return the additional business so obtained is a further drain on the emerging profits of the office. How often have we witnessed that? Such sketchy information as is available about life office investments in ordinary shares indicates something of the propensity for buying at the top of the market and selling at the bottom.

Mr Kelly:
Mr JACOBI:

-I am delighted that the honourable member for Wakefield agrees with me. He has heard that view before, no doubt. Where it has been possible to compare the investment performances of funds managed by life offices with those managed by, say, a merchant bank, the latter ‘s performance is superior. I am delighted that the honourable member would concede that. Life office property investments have been characterised by a late and massive jump onto the band waggon signposted earlier by more enlightened investors. The appropriateness of property investment in the Australian climate should have been obvious to life offices 10 to 15 years ago. A steady program of property investment over that period, instead of the mad scramble of recent years, would have greatly benefited both the life offices’ policyholders and the national economy as a whole. Surely nobody would disagree with that assessment.

I turn to general insurance. This is the area about which I am very concerned. The nature of these companies’ investment is somewhat different from that of life offices as their liabilities are of a much shorter term nature. However, their published earnings generally indicate a much lower return on assets than should be expected of the average, efficient investor. Much of this again would be due to the propensity to make loans on the basis of business connections rather than their intrinsic investment merits. One ought to have a look at some of the decisions of liquidators in this area to see just how true that is. The main cause for poor investment performance of both life and general offices alluded to is the calibre of people administering these policies. The explanation of this lies within the ways that offices are currently organised, and have been for many years. It is only fair to point out that the same weakness is currently inherent in all large financial institutions in Australia. For example, I cite the investment performance of those administering the Commonwealth Superannuation Fund. I am delighted to note that this is now in far better shape than most insurance companies so far as investments are concerned.

Finally, I turn to the question of technical management, particularly of general insurance companies. The man in the street tends to believe that general insurance premiums are ascertained after high powered analysis of all statistics available relating to the risks of being an insurer. Whilst for some decades in Europe this has been true there has also been substantial research into the size of adequate reserves for general insurance companies, in Australia little use has been made indeed of acturial or other skilled mathematical or statistical advice by general insurance companies, although I know of one in New South Wales which has done this extensively and has paid handsome dividends to it. The failure of the management of the industry to utilise or perhaps even to be aware of the body of expert advice available regrettably, is characteristic of the general inefficiency of the industry. I turn briefly to the last matter with which I wish to deal before the Committee stages of the Bills; that is, the question of the provision dealing with fit and proper persons. Since the British Act was changed in 1973 I have tried to get a similar provision put into both Federal Acts. As recently as last week in relation to this matter I received a reply from the Treasurer (Mr Lynch) to question on notice No. 364. He replied: ( 1 )-(4) The Government is yet to be convinced that the highly controversial provisions contained in the United Kingdom insurance legislation in relation to the control of investments and oversight of the suitability of directors are necessary or appropriate in Australia. Insurance legislation is, however, kept under continuing review and I refer the honourable member to amendments recently introduced.

The amendments that have been introduced since the 1 973 Act have been largely machinery. The 2 areas where insurance companies are most vulnerable are in managerial incompetence and bad investments. I do not know how many honourable members in this House have any conception- I noticed the remark made by the honourable member for Lilley before the suspension of the sitting for dinner- of what happens to policyholders in Australia following the liquidation of an insurance company. How many have gone into the Minister’s office? How many have gone into the office of the honourable member for Lilley? I can tell honourable members that many have come into mine. Liquidation is a tragedy and a disaster. Any piece of legislation that can constructively overcome that sort of situation ought to be entertained and adopted in this Parliament. It was found in Great Britain that because of the very nature of the insurance industry different criteria applied in that industry from those applying to an ordinary company on the stock exchange. I do not know of any honourable member in this chamber who has any conception of what happened to many people between 1969 and 1973. Literally tens of thousands of people throughout the length and breadth of Australia suffered hardship, anxiety, breakdowns and bankruptcy because of the liquidation of insurance companies. There is no recourse or access at all to those people. An article in the London Times states:

Fortunately only about 10 cases a year come up for review under the fit and proper persons criteria. And that, considering the fact that the department’s 120 insurance staff are monitoring thousands of people in 800 registered insurance companies, is perhaps some source of comfort. The Department has no power to order the removal of an unfit person but as it has power to stop his company taking on a new business if he does not go voluntarily this amounts almost to the same thing. Most people served with notices that the Department considers them unfit go quietly, particularly if they are managers, when their company does not have to be informed of the official action against its servant. In the case of a chief executive or controller though the company does have to be informed. At all events, the Department of Trade stresses that it tries to preserve the utmost confidentiality. Such confidentiality, it is argued in Whitehall, would not be assured if the action were a judicial instead of an executive one. Someone who feels that he has been wrongfully dismissed can appeal to the courts for a ruling that the Department has acted ultra vires-

Mr DEPUTY SPEAKER:

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

Mr DEPUTY SPEAKER:

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

Mr O’KEEFE:
Paterson

-This is a cognate debate. I shall address my remarks to the life insurance aspect of it. Life insurance in Australia is regulated by the Life Insurance Act 1945-1973 which restricts the business to corporate bodies registered by the Life Insurance Commissioner. A high standard of entry is maintained. Applicants for registration must show that they can conduct a self-contained, wellorganised operation in Australia with experienced management and adequate financial resources for development. Registered companies are required to establish one or more statutory life insurance funds to secure policy liabilities and to lodge with the Commissioner audited accounts and balance sheets, actuarial abstracts and other returns, by means of which the Commissioner can supervise the companies and protect the interests of policy holders. Most of the returns are available for public information. No life insurance policy may be issued unless the premium rates for its class have been certified as adequate by an actuary and each company is required to have an actuarial valuation made regularly of its policy liabilities on a basis which is at least as strong as the minimum basis prescribed under the legislation.

The Life Insurance Amendment Bill 1977 amends the Life Insurance Act 1945. It will update and improve existing supervisory machinery established by the Act to take into account changes in money values and business practices. These have altered considerably since the original Act became law. The previous Act of over 3 1 years ago has been most successful in preventing failures among life insurance companies in Australia. This can be classed as an industry with few rivals in this field throughout the world. The present Bill brings modifying provisions in the light of experience since the Act came into full operation on 1 August 1974. The main provisions of the Act are stated clearly in the second reading speech of the Minister for Post and Telecommunications and Minister Assisting the Treasurer (Mr Eric Robinson).

Life assurance companies play a great part in the economic growth of Australia and are easily the largest investors in this country. I cite the Australian Mutual Provident Society which alone has close to $300m each year to invest. These investments, along with other substantial life assurance companies, assist in developing all kinds of industries across Australia and play a very large part in our way of life. These funds contribute to natural resources development in industries such as iron ore, steel, pastoral, petroleum, natural gas, aluminium, fertilisers, chemicals, timber, mining and quarrying. Assurance funds are playing a major part in the growth of primary and secondary industry, the provision of housing finance, new suburban shopping centres and housing estates and redevelopment of central city areas. It can be seen that life assurance plays a significant role in the lives of many Australians.

Unfortunately, the number of life policies surrendered has accelerated sharply since the former Labor Government virtually destroyed the tax incentive on premium payments. This was a tragedy and a great national loss because the loss of family security and cover could mean financial hardship for thousands of families should a breadwinner suddenly die. On inquiry, the main cause of complaint was related to the amount offered or available as surrender value. Inquiries on this subject have been largely responsible for the increase in the total number of inquiries in the last 2 years and are undoubtedly associated with the substantial increase that has occurred in the surrender of policies since 1975. Policies are surrendered for a variety of reasons, but it is evident that a contributing factor to the increased surrenders of recent times has been the concern on the part of policy owners as to the loss of value of policy in real terms during periods of high inflation. As the owner of a policy is always likely to suffer some loss of equity on surrender of the policy, it is encouraging to note that the rise in the volume of surrenders now appears to be slowing down significantly. Latest figures issued by the Life Insurance Commissioner show that at 31 December 1975, 5 635 000 life policies were in existence in this country for a total insured sum of $39,2 14.8m with annual premiums of $7 15.6m. On the superannuation side there are 660 000 policies in operation for an insured sum of $20,885. 6m with annual premiums of $553,430,000. Industrial policies total $2,011,000 for the sum insured of $l,597.7m. The annual premium amounts to $58.74m. This represents a total of 8 306 000 policies for sums insured of $6 1,698.1m at an annual premium of $1,327. 17m. Superannuation business sums continued to increase during 1975 although the rate of increase was only 29.3 per cent as compared with 43.2 per cent during 1974. There was substantial rise in the sums insured which were discontinued. The rate of increase in discontinuance for 1975 was 4 1.3 per cent. In 1974, it was 5.5 per cent. These results have probably been influenced by the difficult economic conditions which existed in those years. Of course the superannuation amounts have been increased on behalf of the contributors to take care of inflation.

Life companies do an awful lot of good for low income groups. Payments to widows and orphans are in many cases the only assets that those people possess. These companies should not be knocked for their activity in the life insurance field in Australia. Life insurance meets a basic human need- the necessity to protect a family against loss of income through old age and death. By joining a common pool of people concerned about the same issues, a person can provide for himself or herself and for dependants, financial security which would otherwise be impossible to attain. Under the Act still in force, 30 per cent of life companies’ funds are required to be invested in Commonwealth, local and semi-government loans. We know what great benefit these investments are to the community right across the board. The industry is anxious to have the Act modernised. It realises that changes have taken place in conditions, the forms of policies and public demand, making it desirable to modernise some areas of the legislation. The then Minister Assisting the Treasurer stated in his second reading speech that new problems have arisen which are not covered by the Act.

Under those circumstances it would appear that there will have to be a much wider review to determine what kind of supervisory legislation is best suited to Australia’s life insurance industry in the future. We should be prepared for further legislation in this field to take care of this situation.

The real worry of the industry is the tax problem. The 1973-74 Labor Budget increased the tax burden of life offices by 350 per cent. Its burden increased more heavily than that of anyone else. It has fallen into the category of being the only taxpayer not allowed to claim operating expenses as a tax deduction. It is the only business operation in this country that is not allowed to do so. It is not allowed to claim a deduction for its selling expenses. Approximately 15 per cent of the clerical expenses are allowed as a deduction by life companies. This has the effect of reducing the bonus payments that are made to policy holders. There are virtually no shareholders in these companies. So the policy holders certainly must be the ones to lose out.

The 1975 Hayden Budget introduced a general rebate of $540. As I have mentioned previously, this has been a disaster to the insurance industry and a disaster to the taxpayers of this country.

Mr McVeigh:

– It taxed the pensioners, too.

Mr O’KEEFE:

– Yes. The amount of $1,350 in deductions has to be reached before substantial income earners can receive a deduction of 40 per cent on amounts spent in the allowable area. Most people receive the rebate irrespective of whether they have life insurance. The limit of $1,200 has not been increased since 1967. It should now be of the order of $3,000. The $1,200 allowance covers $800 for life insurance and $400 for superannuation. It is possible that those figures should be reversed and that it should be $800 for superannuation and $400 for life insurance. An old anomaly is the fate of the self employed. An employee is allowed $1,200. An employer is allowed exactly the same amount. A self employed person morally should be entitled to a greater benefit than $ 1,200.

Mr Lusher:

– It is cheaper than paying pensions.

Mr O’KEEFE:

– That is right. An increase in the limit certainly would be of tremendous value to the small businessman. I support this legislation, which will be of great benefit. As I mentioned previously, we can expect further legislation to be introduced which also will be of benefit to the industry and to the holders of the policies of these splendid life offices which mean so much to Australia’s development and to the safeguarding of family life.

Mr VINER:
Minister for Aboriginal Affairs and Minister Assisting the Treasurer · Stirling · LP

– The honourable members who have participated in this debate have raised a number of matters concerning the 2 Bills that we are dealing with cognately. I will endeavour to deal with each of those matters or at least the substantive matters that have been raised by individual honourable members. Some have been raised by more than one honourable member. Hence I will deal with those matters collectively.

I shall take first the speech by the honourable member for Adelaide (Mr Hurford), who spoke of a proposal of which notice has been given by the Opposition for the establishment of a committee to examine the insurance industry. I point out to the honourable member that the industry is currently being examined in detail by the Australian Law Reform Commission following a reference by the Attorney-General (Mr Ellicott). Furthermore, the Government is consulting with insurance consultative committees and the question of general revision of the Life Insurance Act is being examined by the Government, as was indicated by the then Minister Assisting the Treasurer (Mr Eric Robinson) in introducing these Bills. So I think it can be seen from that that the Government is active in the field of revision of the law dealing with the insurance industry. Whilst those inquiries and that act of revision are going on within the Government and outside the Government there would not appear to be any need to take on an examination by a committee of the kind proposed by the Opposition.

The honourable member for Adelaide also spoke of some concern about the granting of regulation-making power under this legislation. The Government does not blithely go into the authorising of actions by regulation. It appreciates that government by regulation can be overdone. The honourable member has quite properly referred to the vigilance of the Senate Regulations and Ordinances Committee. It serves a very useful purpose in seeing that no government- neither this Government nor any other one- is granted too much regulationmaking power. Certainly the Life Insurance Amendment Bill will enable a number of changes on detailed matters by regulation, such as monetary limits governing payments under policies. This will allow the legislation to be kept up to date on those detailed matters and ensure that the legislation is not the cause of hardship because of a delay in the payment of policy proceeds. If the matter is looked at fairly by honourable gentlemen I think it will be seen that there is to be no excessive use of the regulation-making power.

The honourable member for Adelaide also asked why the Insurance Commissioner has been given authority to take other employment. As the proposed amendment provides, if that employment is to be taken it has to be taken with the permission of the Treasurer. The amendments in this respect are in line with current practice in relation to statutory office holders. So there is nothing unusual or sinister in what is proposed. Another matter that was referred to by the honourable gentleman, particularly in regard to the Life Insurance Amendment Bill, concerned investments by life offices. I shall comment briefly on that. As has been pointed out by other honourable members, particularly those on the Government side, life offices are amongst the largest investors in Australia, particularly on the stock exchanges. The purpose of the amendment is to avoid investment being unduly inhibited where a company in which a life office is investing has only a small or remote interest in another life office. Under the existing provisions of section 39 sub-section (2), even a miniscule interest of a life office in another life office is prevented. This has been a constant source of difficulty for life offices in carrying out their proper investment role. I am sure the honourable gentleman will appreciate this point and the fact that life offices are such substantial investors in the stock exchanges of Australia. The amendment specifies what are considered to be reasonable limits which are considered to be in the interests of policy holders. So there is nothing unreasonable in the proposal which is put forward.

The honourable gentleman, as did also the honourable member for Cook (Mr Dobie), referred to clause 32 of the Insurance Amendment Bill dealing with section 113 of the Act. That amendment is proposed because the present section has been found to be not workable. Indeed, it has not yet been proclaimed for that reason. The variations that have been made will benefit Australians who cannot obtain satisfactory insurance cover in Australia. It does not prevent, as would have been the case under the application of the present section, Australians from obtaining insurance overseas, but it does protect those overseas insurers who have obtained authorisation to operate within Australia. The honourable member for Cook particularly spoke of the British insurance industry. Lloyds, which of course is one of the greatest, if not the greatest, re-insurers in the world, is authorised to take insurance in Australia from

Australians. The other provisions of the amendment deal simply with the obtaining of statistical and other information and to see that there is no abuse of the exemptions provided for. It is purely for information gathering and ought not to be a source of inhibition of those Australians who wish to obtain insurance with overseas insurers.

Mention was made of the decision to remove from the Insurance Act the present provisions dealing with national interest tests for the establishment of new insurance companies. Very briefly, it has become quite clear that the life and general sectors of the industry are already subject to very close supervision under the insurance legislation. Proposals for overseas investment in the industry in Australia are subject to examination under the Government’s foreign investment policy. Very clear guidelines are laid down there with respect to investment in the insurance industry. The industry is also subject to trade practices legislation. So within the existing framework of Government policy and legislation it is clear that there is no need to include in insurance legislation itself this national interest test. Within the existing policy and legislation it is felt that criteria relating to financial soundness can be met and that market forces should be allowed to determine the structure of the industry rather than any artificial structure imposed by government.

A number of honourable members mentioned the transfer of jurisdiction from the Insurance Tribunal to the Administrative Appeals Tribunal. Under clause 24, particularly sub-clause (U), non-presidential members hearing an insurance appeal are required to have expertise in the insurance industry. So the Government is aware of the need for specialist members to sit on insurance appeals.

A number of honourable members, including the honourable member for Adelaide, the honourable member for Lilley (Mr Kevin Cairns) and the honourable member for Cook referred to the minimum valuation basis and changes that will be provided by regulations pursuant to clause 36 of the Life Insurance Amendment Bill, particularly relating to interest rates, mortality tables and the expense allowance for the selling of policies. The purpose of this is to allow these tables and hence the minimum valuation basis to be kept up to date rapidly as circumstances change. That necessarily will require close consultation with the Life Insurance Commissioner, the Australian Government Actuary and industry representatives. So, while indices provide a useful guide in assessing whether the basis is up to date, it is necessary in view of the long-term nature of life insurance that liabilities are valued conservatively, thus ensuring stability of the industry. It is stressed that regulations to change the basis will not be brought forward until the matter has been fully discussed with representatives of the industry. That should provide both the industry and policy holders with a clear understanding of the concern of the Government to safeguard their interests.

The honourable member for Hawker (Mr Jacobi) mentioned a number of matters. I will deal very briefly with two of them. He referred to clause 6, the proposed new section 16a, dealing with a company carrying on another form of business. I point out to the honourable gentleman that if the Life Insurance Commissioner refuses permission to carry on some other form of business then the company has a right of appeal to the Administrative Appeals Tribunal. Furthermore the honourable gentleman in referring generally to both Bills asked why there is a suspension of certain life insurance investments when there is no similar investment supervision for general insurance. Might I shortly say to him that the types of investment undertaken by life insurers differ greatly from those undertaken by general insurers. Experience has shown that certain investments by life insurers need to be supervised in the manner which is proposed and there is not the same requirement for general insurance.

In closing my comments on the contributions to the second reading debate might I say that it was with a great deal of irony that I heard the honourable member for Adelaide speak of the interest of the Australian Labor Party in the insurance industry. His memory must be short, but I am sure that the industry’s is not, because as was pointed out by honourable members on the Government side- the honourable member for Lilley and the honourable member for Paterson (Mr O’Keefe)- great damage was done to the insurance industry by the former Labor Government during such a short period in office. I would just ask the insurance industry to beware of the honeyed words of the honourable member for Adelaide. They are no better than the doctrinaire approach taken by Labor Treasurers under the last Government. I noticed with great interest that the honourable member for Melbourne Ports (Mr Crean) in speaking in this debate did not retract one iota from the things which he and other Labor Treasurers did. It is a matter that ought to be of great concern to the insurance industry itself to hear these words but then to reflect on the experience it had under the former Administration.

Question resolved in the affirmative.

Bill read a second time.

In Committee

The Bill.

Proposed new clause 34A.

Mr VINER:
Minister Assisting the Treasurer · Stirling · LP

– I move:

The purpose of this amendment is to overcome a substantial weakness in the Insurance Act 1973 which has become apparent since the Bill was introduced. A number of authorised companies have persistently offended against section 44 by not lodging returns required within the period specified, and it is desired to prosecute the worst offenders. However, advice from the Crown Law authorities indicates that in their present form the provisions of the Insurance Act regarding a prosecution for late lodgment of documents are unworkable for all practical purposes and thus do not provide an adequate basis upon which to institute proceedings. It is emphasised that the requirement that companies make detailed returns and statements at specified intervals is fundamental to the effective administration of the legislation. Thus, the amendment will enable the Commissioner to prosecute in appropriate cases for late lodgment of returns. It has been drafted along the lines of section 12 (4) of the Companies Ordinance of the Australian Capital Territory and will facilitate the Commissioner’s task of proving the non-lodgment of documents to the satisfaction of the court.

Mr HURFORD:
Adelaide

-The Opposition supports this amendment. We are very glad to learn that the Government found this improvement in time for it to be made before the Bill became an Act. As the Minister Assisting the Treasurer (Mr Viner) outlined, the fact is that prosecutions which should be made for the better supervision of the industry by government have not been lodged because of this weakness. It would be interesting to learn, of course, why this amendment was not included when the Bill was drawn rather than at this stage, but perhaps that is a story which will come out on some other occasion. I am not going to speak for much longer. My colleague the honourable member for Hawker (Mr Jacobi), who I told the House, if the House did not already know, during my speech in the second reading debate is an expert in this field of insurance, is to be congratulated for the interest he has taken and the valuable work he has done in making sure that there is more security for policy holders, particularly in the general insurance field. He will be joining the Committee stages of this debate for a very short time to apply himself to section 113.

Whilst thanking the Minister for dealing with the details of the points I raised in my speech, nevertheless I must say that his reply was spoiled by the last couple of minutes of gratuitous nonsense. He need not be worried about the Labor Opposition’s relationship with the insurance industry. What he should be worried about in drawing up legislation is bis own Party’s relationship with the insurance industry. I am glad to say that the Labor Opposition now has a very good relationship with the insurance industry. Communications have been established in both directions, and that is the way they will continue while I am Opposition spokesman on economic affairs. I believe that the insurance industry knows it was misled for political reasons by the Liberal and National Country Parties during the time of the Labor Government. It was misled into emotional arguments concerning Australian Government insurance corporations, believing that they were hidden monsters. But I can assure you, Mr Deputy Chairman, and I know that you will be very happy to learn this, that indeed those misunderstandings are now being cleared up and proper relationships have been restored with the insurance industry. Dialogue will continue and the Labor Opposition will communicate with the insurance industry on occasions such as this concerning legislation in relation to that industry.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– I shall address myself for a very few moments to clauses 16, 32 and 36 of this Bill, since we are considering it in a Committee of the Whole. Clauses 16 and 36 rather hang together and give the capacity for regulations as to valuations and the minimum rate of interest to be determined. They can be determined by regulation, and I shall consider those 2 clauses together. I am not satisfied with the explanation given by the Minister Assisting the Treasurer (Mr Viner). I raised this matter during the second reading debate, and the Minister indicated that in these matters the

Government would consult with the Commissioner and with the industry and that something would then be done. What will be done and how will it be determined? That explanation does not satisfy me, nor could it satisfy anybody. If there are going to be consultations with an industry, on whom does the initiative lie with respect to the decision to consult? When will it occur? Above all, what is the nature of the decisions which will come out of that consultation in terms of the interest rate for the assessment of the minimum rate of value of liabilities in the various statutory funds according to Schedule 2? What is the interest rate to be?

I suggest that that kind of proposition ought to attract the Minister so that some assurance can be given that the interest rate, according to which the minimum basis of valuation of the aggregate liabilities of a statutory fund shall be determined, shall be one per cent, say, below the return on assets as determined by the Commissioner for that year; or if the interest rate has to be determined in a year for which the Commissioner has not determined the rate of return on assets, one could go 2 years earlier and catch up in that way. One has to have assurances as to the way in which minds are going to work in determining what that interest rate will be. I assume that that is simple common sense, and that a variety of formulae are available when there is a lag between the year for which the interest rate return can be determined by the Commissioner and the year at which he has to determine the value of liabilities. With a little bit of flexibility of mind, there are many ways in which that can be assessed. But the assurance needs to be given, and I believe it deserves to be given. After all, a difference of one per cent in the interest rate could make a difference of $200m to $400m being returnable to policy holders over a period of four or five years, and that is on a very conservative assumption. It also determines the extent to which the benefits will accrue to policyholders in the future as against policy-holders today, who want to receive the benefits today or who want to receive the bonuses. I do not believe it is a proposition to be put aside as having no value whatsoever. That is my comment in respect of the minimum rate of interest to be determined under the Schedule.

Returning again to the matter of the life tables, I do not know whether the Minister responded to that in his reply.

Mr Viner:

– No, I did not.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

– The Minister did not indicate what life tables were to be utilised.

There is a whole host of good reasons why the life tables to be utilised- again, they are nominated in Schedule 2 and are governed by clauses 16 and 36- should be as recent as possible and not ones which are rather dated. One only has to look through the Schedule at the moment to see that some of the tables to be utilised lie in the period of the 1930s. The difference in mortality rates in all age groups and sexes varies very much as between the 1930s and today and differs very substantially as between the 1950s and today. For example, statistical bulletin number 4.3 1 was released by the Commonwealth Statistician only recently and gives the Australian life tables for 1970 to 1972. 1 will quote Mr Caffin in his comments on the life tables as they are today:

The decline in the rates of mortality which has been shown in each of the Australian Life Tables this century except for the Australian Life Tables 1 965-67, has again taken place in the present Tables for the years 1970 to 1972.

When we refer to appendix D it is quite clear that there is a significant gradation over the period of time. So we ask: What life tables is it the intention to apply for the purpose of these calculations according to the regulations? Some assurance needs to be given. Again, that affects very significantly and cogently the return that is to be given to people who are either policy holders or who will receive bonuses from the life insurance companies.

The third point which I want to mention to the Minister- I hope that he would consider it- concerns clause 32. 1 refer to clause 32 ( 13) which is dealt with on page 13 of the Bill. This determines the membership of the tribunal that shall be considering certain appeals. From line 13 onwards, certain people are debarred from being members of the Administrative Appeals Tribunal. The sub-clause states:

A non-presidential member of the Tribunal shall not sit as a member of the Tribunal for the purposes of a review of a reviewable decision . . . if he is a director or employee of a company, body corporate or body carrying on ( whether in Australia or elsewhere) life insurance business or insurance business.

That exception is fair enough and the intention of it is quite clear. But I ask the Minister: Would not it be appropriate for him to consider that insurance brokers also be debarred from sitting on the Tribunal? Insurance brokers, even in the example I cited this afternoon, and from one’s experience tend to develop a relationship with an insurance company or an organisation- even a predominant relationship with an insurance company or a particular organisation. I suggest that insurance brokers should be considered as falling into the same category of being debarred as is suggested in clause 32 ( 13). It would make a number of the people in the industry rather happier than they would be with what I think is just a simple oversight. I hope that it will be considered carefully by the Minister. So the 3 clauses to which I want to refer -

The DEPUTY CHAIRMAN (Mr Giles)Order! Would the honourable member for Lilley explain to me what clause of the Bill he is now debating?

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

-I am debating clause 32(13).

The DEPUTY CHAIRMAN- Is not that a clause of a Bill the Committee is yet to consider?

Mr Bourchier:

- Mr Deputy Chairman, we are considering the Bill as a whole.

The DEPUTY CHAIRMAN- Yes, but we have 2 Bills to deal with. I have a feeling that the honourable member for Lilley is debating the second Bill and not the first Bill.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

-I am sorry, Mr Deputy Chairman. I am speaking to the Life Insurance Amendment Bill. Are we debating the Insurance Amendment Bill?

The DEPUTY CHAIRMAN- Exactly.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

-Nevertheless, I ask the Minister to consider my comments when replying. I would not dare repeat them when we come to deal with the Life Insurance Amendment Bill. It has been rather obvious what I have been speaking about. I have been speaking to the Life Insurance Amendment Bill. I think that my remarks have been self-explanatory.

The DEPUTY CHAIRMAN- Before I call any other honourable member, there is another small problem I wish to raise. I put the question to the Committee a while ago: ‘The question is: That the new clause proposed to be amended be so amended’. In fact, the honourable member for Lilley was out of order in not debating the amendments. Might I get an indication as to whether the other 2 speakers in the debate wish to debate the amendment?

Mr Jacobi:

– No- I do not wish to debate the amendment to clause 24.

The DEPUTY CHAIRMAN- I think in this circumstance I will call the honourable member for Denison to debate the amendment.

Mr Bourchier:

- Mr Deputy Chairman, I rise to order. The Committee may have 2 Bills before it. But you asked the Committee whether it wanted to take the Bill as a whole. I think that the honourable member for Hawker (Mr Jacobi) wished to talk about the major Bill that is before the Committee which includes the amendment.

Am I correct? If so, I think that you should call the honourable member for Hawker first.

The DEPUTY CHAIRMAN- I will clear up this matter. I do not think I have gone far enough in my explanation to the Committee. The question before the Committee at present is ‘that the amendment be agreed to’. Having disposed of that argument in a Little while on the vote of the Committee, the next question I put is ‘that the Bill, as amended, be agreed to’. Quite frankly, that is the more legitimate area for debating the sort of issue raised by the honourable member for Lilley, if he were talking to the right Bill, which he was not. I would think that a direct debate on the amendment such as the honourable member for Denison says he is about to present would be proper to call on after which I will put the question and then I presume that the honourable member for Hawker would be prepared to debate the question that the Bill, as amended, be agreed to. Is that how the honourable member for Hawker would wish it?

Mr Jacobi:

– Provided I can speak to clause 32 ( 1 3 ), I am delighted. But I ask the honourable member not to take too long.

The DEPUTY CHAIRMAN- I call the honourable member for Denison.

Mr HODGMAN:
Denison

– I find this amendment offensive though not to the extent of leading to a revolution. It is yet another example of the Parliament writing into the statutes a provision that a certificate shall be deemed to be prima facie evidence of the matters specified in that certificate. I have consistently opposed such provision in State and Commonwealth legislation because I believe it is wrong to bring a defendant before a court and instead of confronting him with witnesses whom he can crossexamine, confronting him with a certificate. The situation under section 124 as it stands at the moment is that a certificate under the hand of the Commissioner certifying as to certain matters shall be received in all courts as evidence of the matters certified. This takes it further and states that for the purpose of the prosecution a certificate is, ‘prima facie evidence of the matters specified in the certificate ‘. This means that unless a representative of a company goes into the witness box and gives evidence- and having given evidence he can be cross-examined at large- a conviction must follow because the certificate will not have been answered.

I lodge what is probably a protest 20 years too late. For the last 20 years parliaments have been putting this iniquitous provision into legislation, even in the case of a man who fails to vote. If he goes along to court to defend that prosecution, he is not confronted by witnesses. He cannot say: ‘I told the electoral officer what my explanation was on the day in question’. He is confronted by a certificate. I do not believe it is good law. In fact, I believe it is bad law. Having made that protest, let me say that the provisions of the legislation are such that we are dealing with very substantial fines. We are dealing with the reputations of life insurance officers. I believe that we are dealing with the integrity of the managers of the insurance profession of this country. I want to place on record my opposition to a situation in which we facilitate prosecutions by producing certificates instead of producing witnesses. I believe that it works injustice. I certainly believe it does not save time. There are nearly as many arguments about certificates as there are about witnesses who come into court.

Lastly, I ask the Minister rhetorically as an old friend at the bar: Why is there not a provision in this amendment for a defendant to give notice that he requires the signatory of the certificate to be present for cross-examination? I believe that if we create a situation in which a certificate can be

PUt in as evidence the Government should at east give the defendant, whether it be a company or an individual, the right to give notice that he desires to cross-examine the man who made out that certificate. I hope that in future if we are to put these iniquitous provisions into legislation we at least remember that there are 2 sides to every prosecution. There is the prosecution and there is the defence. I believe that the defendant has inherently a basic right to confront the man who accuses him, not to be confronted by a printed government certificate.

Dr JENKINS:
Scullin

-The honourable member for Denison -

Motion (by Mr Bourchier) agreed to:

That the question be now put.

Proposed new clause agreed to.

The DEPUTY CHAIRMAN- The question before the Committee now is: ‘That the Bill, as amended, be agreed to’. I call the honourable member for Hawker.

Mr JACOBI:
Hawker

– I wish to make 2 quick observations before I deal with section 1 13. 1 remind the Minister for Aboriginal Affairs (Mr Viner) that the consultative committee to which he made reference was a compromise between me and certain individuals rather than an in depth inquiry. The second point concerns the Law Reform Commission dealing with contracts. I believe that I gain some prestige by the fact that it was because of my efforts that that matter is before the Law Reform Commission.

I turn now to section 1 13 of the Insurance Act. In his second reading speech the Minister said:

Fifthly, it has become apparent that a considerable amount of insurance is being sent to unauthorised insurers overseas . . . which has not yet been proclaimed . . .

I would like to be very specific and somewhat circumspect when dealing with this particular matter because it is important. I assume that when dealing with ‘unauthorised insurers overseas’ the Minister is referring to insurers overseas who are not authorised under this Act. The Minister will recall that during my speech on the last number of amendments to these Bills I raised the question of the irresponsible actions by overseas companies operating within the Australian market and the adverse effect that they would have on Australian companies.

I make 3 observations. Firstly, section 1 13 has yet to be proclaimed. Secondly, it has been decided to allow exemptions from the prohibition for so-called flexibility purposes. Thirdly, the amendments make for more information on business transactions to overseas unauthorised markets. I have very strong reservations about the Government’s proposed manipulation of this section of the Act. I believe that the section should be retained and its full force brought to bear to ensure that the maximum business is retained within the Australian market. As I understand it, if an insurance broker cannot on behalf of a client obtain an acceptable rate in this country, he may be obliged, and indeed is often obliged, to place it on the London, New York, Amsterdam or Switzerland market. That means placing that business with overseas insurers not authorised under the Australian Act.

As I understand it also, unauthorised insurers are not prohibited from a slice of the market, subject to certain criteria. That authorisation should be granted, I believe, very sparingly. It should be granted only where cover is not obtainable within the Australian market, and that is where there is a shortage within the Australian market to enable it to underwrite a risk. It should not be used to underwrite, or rather to undercut, the Australian market and thereby create an unstable situation amongst authorised insurers who are obliged to comply with and meet the provisions of the Insurance Act and to pay their due proportion of income tax, stamp duty and fire brigade levies, which is largely the source of funds for fire brigade maintenance throughout Australia. The Minister ought to remember that when he applies this section of the Act.

Other countries, in particular the United States, certain of the countries in the European Economic Community, South Africa and not the least Mexico- I ask the Minister to note this point- have seen fit to legislate to prevent plunder by overseas companies of their own indigenous markets. We ought to be doing exactly the same. This dispensation must be sparingly granted if for no other reason than to enable the maximisation, as far as it is practicable, of protection from exploitation of the Australian market by Australian companies.

I raised in this Parliament very early the proposition that Australian companies ought to get a bigger slice of marine hull insurance. As a result of that and as a result of the actions of the former Labor Government, we got at least a proportion of the market. We went from almost ml to 20 per cent. I believe that a lot more can be done by this Government to galvanise the Australian market to capture a greater proportion of insurance business that we are losing rapidly to overseas markets day after day.

The other factor which I think ought to be shed in this context is regrettably the stamp duty impost. We in this country do not seem to realise what a marked effect that impost has in forcing underwriting work on to the overseas market. As I said, much underwriting is placed overseas to obviate the stamp duty impost and the fire brigade levies. One cannot gauge precisely to what extent that occurs, but unquestionably those imposts represent a very large contributing factor. Again it depresses and it obviously creates additional burdens on Australian companies or companies authorised within the Australian market.

I wish to raise another matter. Perhaps technically I should not raise it when dealing with section 113, but I raise it in connection with the final amendments to both Bills. I suggest to the Minister that it is well known throughout Australian insurance circles that Guardian Royal Exchange, which is a London based company, has for some time been cutting rates to an uneconomical level. If it continues its price premium cutting war, there will be one ultimate result: If Australian companies are forced to compete with that company on its terms some Australian companies could well face liquidation. For instance, recently a State insurance company in South Australia lost a large parcel of underwriting insurance with the State Bank of South Australia because it was undercut by that London company by as much as 50 per cent.

Australian companies just cannot meet that competition. I am reliably informed also that in London, for instance, pressure is being placed on Guardian Royal Exchange in the insurance market to act more responsibly in this competitive field.

I impress upon the Minister and upon the Government the fact that we ought to realise that Australian companies are underwriting in an extremely limited market and we ought to do what overseas countries do; we ought to structure our legislation to protect our own indigenous market. We have failed to do that. In the interests of market stability in this country, I ask the Minister to have my allegations thoroughly investigated with a view to ensuring that the irresponsible activities of Guardian Royal Exchange are minimised as far as possible. I conclude by impressing upon the Minister the proposition that if the Government intends to apply section 1 13 it ought to do so very sparingly if it wants to protect the Australian market.

Mr VINER:
Minister for Aboriginal Affairs and Minister Assisting the Treasurer · Stirling · LP

– In dealing specifically with the matter raised by the honourable member for Hawker (Mr Jacobi) concerning section 1 13, it ought to be pointed out that the original intention of the section was to forestall the establishment of unauthorised overseas insurers through agents in Australia and thereby to protect those who are conducting authorised business in Australia and to protect Australian insurance companies. As the clause was drawn, it would have defeated the intention of the legislation. Brokers and others are not restricted in placing business directly with unauthorised insurers, providing they act on their own behalf or for others in Australia and not as agents of these insurers. But, of course, if an Australian resident places business with an unauthorised overseas company he must make his own judgment as to the security of the insurance which he places. What the Government is doing by means of the amendment is to bring into operation the true intention of the legislation. It is seeing also that information is provided so that it knows the extent of that business overseas. The exemption which is provided for by the proposed amendment to section 1 13 is necessary to enable the section to be brought into operation without undue disruption to current arrangements in relation to placing business overseas, whilst still protecting the Act from evasion by unauthorised insurers overseas.

Against that background I do not think it can lie in anybody’s mouth to accuse the Government of setting up the amended section 1 13 so as to manipulate the insurance industry in Australia in favour of overseas insurers. In fact, if the honourable gentleman has proper regard for the foreign investment guidelines which must be applied in relation to the legislation, it will be seen that the Government is seriously concerned about preserving the interests of Australian insurers while at the same time allowing Australians proper access to overseas insurers.

Bill, as amended, agreed to.

Bill reported with an amendment; report- by leave-adopted.

Third Reading

Bill (on motion by Mr Viner)- by leave- read a third time.

page 1245

LIFE INSURANCE AMENDMENT BILL 1977

Second Reading

Consideration resumed from 31 March, on motion by Mr Viner:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

Mr VINER:
Minister for Aboriginal Affairs and Minister Assisting the Treasurer · Stirling · LP

That the Bill be now read a third time.

In moving that the Bill be now read a third time might I briefly refer to a matter raised by the honourable member for Lilley (Mr Kevin Cairns) concerning the nature of decisions upon which alterations will be made in interest rates under the Fourth Schedule and the life tables. Might I say that I am not in a position now to say to the honourable member just what rates will be applied, what new rates will be applied or what particular life tables will be adopted. It is obviously impossible for me here at the table now to say what might be done in the future in order, as I pointed out during the second reading debate, to update the tables and the rates provided for in the Fourth Schedule. The very purpose of the amendment which will enable this to be done by regulation is to allow the speedy updating as there are changes, for example, in mortality rates and interest rates.

I think the honourable gentleman would appreciate that I am not in a position to give such information. I am not able to do so for very good reason. As I have said earlier, any changes would, of course, be made only after the closest consultation with the industry and the Life Insurance Commissioner.

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

-I think the Minister for Aboriginal Affairs (Mr Viner) may have misunderstood what I was trying to convey earlier. I do not want him, nor would I want him, to indicate the minimum interest rate which should apply to the basis evaluation etc. I do not want him to nominate whether it be 3.5 per cent, 4.5 per cent, 5 per cent or any other figures. I merely wanted the Minister to indicate the basis upon which the judgments are to be arrived at after consultation with the Insurance Commissioner and the industry. As a matter of fact, more power and less assurances will exist now as a result of the amendment than existed previously. Previously the interest rate could not be varied other than by an amendment to the Act. If the Bill is passed, as obviously it will be passed, the interest rate will be able to be varied by regulation. But there is no guarantee as to where this will end or the basis upon which the judgment will be applied.

I appreciate that the Minister would not want to be trapped into making a year by year random judgment, for example, on the return on assets. The latest report of the Insurance Commissioner sets out the return on assets of all classes and all companies for the 5 years to 1974. The report shows that the returns were 6.68 per cent, 6.7 1 per cent, 6.78 per cent, 6.9 1 per cent and 7.4 1 per cent respectively. There are some variations in these figures. Of course, we may be speaking in respect of the returns of a company for the year 1975-76. So one could easily get rid of odd random movements by a number of techniques which would be available to the Minister. Techniques such as moving averages and so on would certainly be available to the honourable member for Adelaide (Mr Hurford). I suggest to the Minister that there needs to be some guarantee that the interest rate will have a relationship to what I call the index of returns which is in the Life Commissioner’s report and which can be applied to the year in question.

I would like to draw to the attention of the Minister once again- he may have forgotten what I said previously because of the confusion that arose in relation to the 2 Bills- clause 32 of the Life Insurance Amendment Bill which deals with the membership of the Administrative Appeals Tribunal. I mentioned the people who were debarred from membership of that body. I suggested that the Minister might consider insurance brokers being appointed to that body.

I think it is appropriate that the Minister should consider such appointments.

I come back to the question of interest rates. This is an important matter in respect of which there are no principles or guarantees whatsoever. Under this legislation there is less restriction on what can be done without regard to any interest rates than existed prior to the amending Bill being passed. Therefore I suggest that the Minister might consider those principles very carefully.

Question resolved in the affirmative.

Bill read a third time.

page 1246

TERTIARY EDUCATION COMMISSION BILL 1977

Second Reading

Debate resumed from 2 1 April, on motion by Mr Staley

That the Bill be now read a second time.

Mr VINER:
Minister for Aboriginal Affairs · Stirling · LP

– May I have the indulgence of the House to raise a point of procedure on this legislation. Before the debate is resumed on this BUI I would Uke to suggest that it may suit the convenience of the House to have a general debate covering this Bill and the Commonwealth Teaching Service Amendment Bill as they are associated measures. Separate questions will, of course, be put on each of the Bills at the conclusion of the debate. I suggest, therefore, Mr Deputy Speaker, that you permit the subject matter of the 2 Bills to be discussed in this debate.

Mr DEPUTY SPEAKER (Dr Jenkins:
SCULLIN, VICTORIA

-Is it the wish of the House to have a general debate covering the 2 measures? As there is no objection, I shall allow that course to be followed.

Mr LIONEL BOWEN:
Smith · Kingsford

– These 2 pieces of legislation have already been debated in the Senate where amendments were moved. It is proposed by the Opposition to move similar amendments here. At the outset honourable members will notice from the amendments that are being circulated that the Opposition has some reservations in the sense that it now appears that the Technical Education Commission is to be absorbed in what is now known as the Tertiary Education Commission. I propose to address my remarks almost in toto to the Tertiary Education Commission BUI. However, as honourable members know, we are also dealing in cognate fashion with amendments to the Commonwealth Teaching Service Act to which the Opposition has no objection. As I have confirmed, the Commonwealth Teaching

Service Amendment Bill has already been passed by the Senate. This Bill makes special long service leave provisions for New South Wales technical teachers who joined the Commonwealth Teaching Service between 31 December 1976 and 1 April 1977 and who were engaged in full time teaching duties in a technical instution in the Australian Capital Territory. The BUI allows former members of the New South Wales teaching service who were teaching in the Australian Capital Territory technical institutions in 1976 and who elected to join the Commonwealth Teaching Service after 31 December 1976 and before 1 April 1977 to preserve their long service leave conditions that applied under State legislation in force immediately prior to their joining the Commonwealth Teaching Service and to treat future teaching service as if it were State service for the purposes of that legislation. I will say no more about that matter except that the Opposition has no objection to that amendment.

With regard to the Tertiary Education Commission Bill, I remind the House that it provides for the constitution of a Commission which will have a chairman and 8 other members. It will be noticed from clause 10 of the BUI that there are full-time and part-time commissioners. So, out of the nine members, there are 4 full-time commissioners and S other commissioners. That is for the Tertiary Commission itself. The Bill also provides for what are deemed to be councils for each segment of the tertiary area, that is, university councils. The council also is comprised of a chairman who shall be a commissioner as referred to in clause 10, and 8 other members. Whilst it is not expressed as such in the Bill, the other members are obviously part-time. A similar situation applies to the advanced education Council and what is known as the technical and further education council. It follows from the various clauses of the BUI that the chairmen of those councils themselves become members of the Commission, so there is direct liaison between the Tertiary Education Commission and the advisory councils. That is worth noting.

It is worth noting also that only the chairman of the council gets to the Commission level and that there are 8 other members. It is expectedindeed it is included in the BUI- that reports of the councils would also be available to the Minister and, I take it, to the Parliament because the Parliament would want to know that the decisions made at the Tertiary Education Commission level are in accordance in the main with the recommendations made by the advisory councils. I know that the Minister for Aboriginal

Affairs (Mr Viner) will want to do so. A tertiary institution is now denned in the Bill as meaning not only a university or college of advanced education but also a technical and further education institution or a prescribed Commonwealth institution. Therefore, it is all-embracing. The Opposition feels that it would have been better to retain the independent status of the Technical Education Commission. I remind Government supporters of their own policy which was known as the education policy. Under the heading ‘Tertiary Education ‘ it says:

The Liberal and National Country Parties established the Australian Universities Commission and the Australian Commission of Advanced Education.

It then goes on to say:

We recognise the need to seek greater co-ordination between the bodies involved in tertiary education and we believe much of the value of the 2 Commissions has stemmed from their distinctive nature. We would therefore examine closely the Labor Government’s proposal to establish a Tertiary Education Commission.

The Labor Government’s proposal was that there would be a commission that consolidated those 2 commissions into one. In its education platform at the last election the Government said that it would have a close look at that and that it felt there was a lot of merit in the distinctive programs of each of the commissions. In other words, I would read into that that it felt that the commissions should remain virtually separate. What do we find in this legislation? The commissions are being amalgamated. This is happening not only to these 2 commissions but also the Technical Education Commission is being absorbed. The opening words of the policy speech of the Government in respect of technical further education states:

We will retain the technical and Further Education Commission.

Of course, that policy has gone out of the window because the Commission is being absorbed in this piece of legislation. But it is worth noting why it is felt that the Commission ought to be retained. The policy speech states:

The Commission’s work has drawn attention to the neglected areas of education, its activities and its recommendations, and they will receive our close and detailed consideration. Seeing education is a life long progress we will emphasise continuing education and re-training programs which while enabling Australians to fully develop their individual potential will prepare them for the challenge of a changing society.

It goes on to mention a number of reasons why technical education has been neglected, why it will cater for retraining positions, why it will cater particularly for women re-entering the work force and states that there is a great need to retain that Commission in an independent status.

That, I believe, is the view of the Opposition. The Opposition feels that it would have been worth while to do that because it is the Cinderella of education in the tertiary field. It is the area which obviously has the greatest need. Technical education applies to everybody in the community in one form or another. It appears at the moment that only the very brightest people are able to enter university because entry is on a competitive basis associated with high marks and only the very select few are making it there. In the advanced education field it is again very competitive. But the great wealth of the community with all its talents untapped and untrained have a chance to further their education and to assist this nation by undertaking technical courses which are quite wide and well adapted to a large number of people. The Opposition is therefore moving amendments on the basis that whilst it is not opposing the provisions of the Bill, it does not want to see technical education disadvantaged and it wants assurances that adequate financial resources will be made available to the technical sector to raise its standards to the level envisaged in the Kangan report, that further measures will be taken to ensure that technical education is not further isolated and that every effort will be made to ensure full provision for the development of further education.

Why would the Opposition say that if there was not some evidence to the contrary as to what might happen? I refer to the Budget Speech of the Treasurer (Mr Lynch) last year under the heading ‘Education’ with regard to the Government’s proposals for planning and minimum expenditure. He said:

As announced in my statement in May the planning guidance for universities, colleges and schools- 2 per cent growth in real terms- and for technical and further education- 5 per cent growth in real terms.

That sounds very impressive and important and the statement says that it can be seen that there is a growth in real terms. But when one looks at what is actually happening in a monetary sense, one finds, because it is obvious from the mathematical tables, that there is not really growth in real terms. Let me harken back to the question I asked the Prime Minister (Mr Malcolm Fraser) this morning concerning the new federalism policies of the Government. The only direct promise is a 33.6 per cent return of personal tax reimbursement. That, if one looks at the mathematics of the situation, gives back to the States only $3 billion out of a total of $8 billion. The residue of $5 billion payments to the States is made up of general revenue funds and specific purpose payments for recurrent purposes. Unless that ratio of three to five is maintained, in other words, unless the States are promised that that ratio will be maintained, there will be a diminution in standards of education at the tertiary level. This will occur perhaps not so much at the university and advanced education level, where it has already been undertaken to accept full responsibility, but in the technical education field. At the present time the States are bearing the burden for 83 per cent of the cost.

So it follows that unless that standard of grant is maintained with indexation added, in the inflationary sense, there could well be a diminution in standards. I emphasise this point because federalism will not work if it means there must be State taxation. I am very fearful that that is the position. If there is to be State taxation it will be at the minimum level, so it could well be that technical education will be the sufferer if programs are to be cut. In Budget Paper No. 7, which deals with payments to or for the States and local governments, it will be seen that under specific purpose grants recurrent, very considerable amounts of money are available for the universities and colleges of advanced education. I am happy to say this is also the case in the area of technical and further education. This can be seen in the recurrent area and it can be seen in the capital area. With regard to the capital area, it will be noticed that in the last Budget Papers, when we were dealing with capital expenditure advances for universities and colleges of advanced education, the capital expenditures were reduced. Expenditure on technical education was maintained but not at the level that is required. Thereby comes the criticism of the present financial position.

The report of Dr Kangan makes the quite obvious remark that the Commission set up to advise the Government for the triennium had to abide by the guidelines. For the first time the Federal Government was not looking at the needs of education as found by the respective commissions but was directing them as to the sum of money available to apply as best they thought fit. In other words they could not go outside the guidelines in respect of the quantum of money that was to be made available. That can be inferred from the 2 per cent growth in one area and 5 per cent in the technical education area. As I said, that growth figure did not take into consideration all the other problems facing the commissions. For example, the Universities Commission- I am not limiting it just to technical education- said that the Commission’s understanding of this system of triennial funding was that each year it would be given guidelines in real terms which would consist of firm expenditure figures for the following year and guaranteed minimum figures for the succeeding 2 years. That means that there is no effective triennium funding because each year these figures are to be given. These are insufficient guidelines for technical education in the States. If they are to plan new projects, ideas, courses and buildings in technical education the lead time is a minimum of 2 years. No State government will have the opportunity to plan these additional projects within the triennium guidelines position. All the States are facing this situation now.

I notice that the Prime Minister has written to the Premiers on this issue saying that there will be an opportunity to have conferences and to coordinate policies. I am not aware of the date on which he wrote that letter. I think it is recent. The letter is noted in Hansard as having been written but the date is not supplied. I understand that at present the State Ministers are not really aware of what has been offered by way of assistance in this regard. I am prepared to say that the State Ministers want an assurance that if they have to involve themsleves in planning proposals which could cost them many hundreds of thousands of dollars they want to know that those projects will be funded. They cannot be left in a hiatus where they must say: ‘We have planned a project but we encounter a guideline position which means that next year money will not be available and therefore that planned project has to be removed from the program’. That situation is not good enough for any State. Therefore something has to be done about that issue.

One comes to the nub of the argument when one looks at that part of Dr Coughlan’s report dealing with the problems of technical education. One wonders whether this report was too honest, too open, too critical of the Government because it said that the Commission could not possibly allow for the proper needs of education if it had to stick to the guidelines. Perhaps that is why the Technical and Further Education Commission is now being obliterated. I hope not. Nevertheless it is being extinguished despite the fact that in the Government’s policy speech it said that it would be retained. Despite the fact that technical and further education was known to be the Cinderella of education, the Commission is now being absorbed. Is it because the report of Dr Coughlan and his colleagues was too open and direct as to the needs of technical education and stated that the guidelines directed by the Government went nowhere near meeting those needs?

The report states that there is a lack of sufficient skilled manpower and an imbalance of resources available to those who want a skilled labour force. In other words perhaps too much emphasis has been placed in the wrong area and certainly too little has been placed in the technical education area. The report said that it was foolish to restrict enrolments in needed vocational courses. Who could disagree with that? But is this not to be the position? As the report stated, to maintain technical education there would need to be a minimum objective for enrolments. The report states:

It would be irresponsible to plan for an increase of less than 85 000 additional enrolments over the triennium.

Dealing with the situation at present within the current guideline structure the report states:

Thirty-four thousand additional students should be provided for. Under the guidelines capital provision will fall short in 1 977 by more than 6000 places.

There comes the criticism. The Commission then had to offer optional programs and suggest that the Government should have another look at this situation it was creating for technical education. Commencing at page li the Commission set a summary of recommended expenditure which would go somewhere toward meeting the problems it sees as facing technical education. Firstly, the Commission gives the guideline expenditure available for 1978. For capital expenditure the amount is $37. lm. But the amount the Government should provide even to maintain 1976 standards is $49.4m. The amount provided fails by some $12m to maintain that limited standard. But if the Government were to achieve the 1974 standard- that should be significant to the Government opposite because it was in Opposition at the time- it should provide $6S.4m. But one sees that the amount provided for 1 978 is only $3 7m, as against an obvious need of about $65m. With respect to recurrent expenditure the Committee put it on 2 bases, the guideline basis and the needs basis. Surely one would think a needs basis ought to be the guideline basis. But when one looks at the mathematics of the situation one sees that that is not the case. The amount provided for recurrent expenditure for 1978 is $39.S4m. Under the needs basis it ought to be $49.3m- a discrepancy of some $10m. If one looks at the 1979 program one sees that $40m is provided under the guidelines and under the needs basis the figure is about $55. 8m- a widening gap of a further $ 1 5m.

It is for those reasons that we take this point and we propose this amendment that says that we are very concerned with all this evidence and, having all the background information that we are now getting about the new federalism policy and how it can well restrict growth of financial aid to the States in the large sums of money that are no longer to be maintained by way of specific purpose recurrent or capital grants, if aid is in any any diminished it will have a serious effect, to say the least, on technical education. Dr Coughlan and his Commission pointed out what was needed to maintain the impetus and how this gap has to be met. We find now that this Commission has been done away with altogether. This virtually signals that it was an embarrassment to the Government. But we do not want it thought that this new Tertiary Commission will be so tame that it just goes along with government guidelines. We want criticism of government guidelines. Worse still we look like facing a situation in which, as the Tertiary Education Commission will be dealing with a lump sum volume of money in toto to be applied across 3 different sectors, there will be somewhat of a scramble as to who will get what share of the cake.

It follows, does it not, that those representing universities and colleges of advanced education fairly and properly would want to maintain standards? If they are to do that with the problems that are now highlighted both by the Universities Commission report and the Technical and Further Education Commission report which say that there is virtually no growth and that there will be problems to maintain existing commitments, technical education could well be even more the Cinderella than was envisaged by Dr Coughlan. It is elementary, is it not, that to meet the needs of technical education the Treasurer (Mr Lynch) in his Budget and in his supplementary appropriations now should be giving greater allocation of funds to the State governments for technical education? That is where the great capacity is to absorb the money. That is where the great need is for the skill. Perhaps there is so much unemployment at present because there is a shortage of skilled personnel in certain areas. They are not being trained. If the Government is allocating resources in the wrong area how will it possibly find additional funds to meet technical education needs? In our view as an Opposition the Technical and Further Education Commission should have been retained with its separate identity, separate purpose and its separate application of its duty to the functions of technical education which have many difficulties, many problems. It is virtually still likely to be the infant partner against the 2 major groups already existing.

Is it not a fact that a sense of elitism arises when we are dealing with skills, who has the most mental intellect and who has the best to offer the community? Those running universities, in the main, are training people who, they say, will be lecturers in and virtually administrators of technical colleges. It is important when we look at the courses available to see that there is some co-ordination. I find constituents who engage in the technical field coming to me and saying that they have undertaken courses, particularly courses in accountancy, but that they are deprived of ever getting the necessary qualifications to be recognised as fully qualified professional accountants. It is a bit ridiculous in New South Wales at the present time to have so many people apparently undertaking courses which are deemed to be at the middle level in accountancy and who, having qualified in that course, will never be accepted by the appropriate institutes. Yet if we look at those who are the head of the schools in the accountancy field and those who are lecturing in accountancy, we find that the people involved are qualified at university level. Apparently they are not able to impart adequate knowledge to their students to give them the same level of entry into that profession. So, we have a whole group of people coming out of technical colleges and in some areas not being able to realise the extent of their capacity or their talents. We must be critical of that state of affairs. It would follow, of course, that those in a tertiary commission might be prone to say that adequate courses are provided in universities and colleges of advanced education but that, as we all know, entry is limited by restrictions on numbers, whereas in the technical colleges opportunity to enrol is spread on a much better basis through regional development, particularly country development. Students should be able to get the qualifications that they need if the courses are adequate and expanded on that basis. Perhaps this is a State matter to the extent that State governments themselves have a duty to look at it. But we do not want this discrimination not only in funding but also in courses so that we have a third grade tier. A very good lecture was given recently on education and what could be achieved. It suggested that perhaps we have created too many tiers of education and that perhaps we should look at it from the point of view of a very high quality second course other than a university course. We should not just be training people for factory employment. We should be training them in skills to enable them to use their intellect so that they might develop other talents of their own and not become just mere employees, but inventors and employers.

We do not want to have education provided in a form of machined study on the basis that industry has particular needs.

I mention again that, whilst not opposing these pieces of legislation, which of course have already been decided upon by the Government when it has not really given its clear views as to what it is going to do with respect to technical education, we are very concerned at what we now find being absorbed into the tertiary education field. Accordingly, I move the following amendment to the motion for the second reading of the Bill:

That all words after ‘That’ be omitted with a view to substituting the following words: ‘whilst not opposing the provisions of the Bill, the House is of opinion that-

the disadvantaged position of technical education in Australia be recognised and that adequate financial resources be made available to the technical sector to raise its standards to levels envisaged in the Kangan Report;

further measures be taken to ensure that technical education in Australia is not further isolated from secondary education; and

every effort be made to ensure full provision for the development of further education. ‘.

Dr Jenkins:

– I second the amendment and in deference to the honourable member for Franklin (Mr Goodluck) reserve my right to speak.

Mr CHAPMAN:
Kingston

-Firstly, I oppose the amendment moved by the honourable member for Kingsford -Smith (Mr Lionel Bowen) and wish to address a few remarks to his speech this evening. He mentioned that the States are currently funding 83 per cent of technical and further education. Of course this is the case because the primary responsibility for technical and further education remains with the States. Notwithstanding this fact, the Commonwealth has provided the largest real increase in its overall funding for education to the technical and further education sphere- an increase of 5 per cent on recurrent expenditure- and has also maintained the capital level at its existing rate. This is despite the fact that in many areas of government expenditure cuts have been introduced in recurrent and capital expenditure. These cuts have been brought about because of the economic chaos created by the Labor Government during its term of office.

The honourable member for Kingsford-Smith also mentioned that he believed this Government was downgrading technical and further education by incorporating that sector within the Tertiary Education Commission. The real situation is that technical and further education will have a more effective voice than previously because of its participation in the Tertiary Education Commission. In this Commission it will be able to argue its relative merits against the merits of both the College of Advanced Education aspect and the university aspect of tertiary education. By incorporating technical and further education within the Tertiary Education Commission the Government is not downgrading but is in fact enhancing the capacity of technical and further education to obtain government assistance.

Both education Bills before the House this evening, I believe, have importance as far as vocational education is concerned, that is, education directed specifically towards obtaining employment.

The Commonwealth Teaching Service Amendment Bill concerns long service leave for New South Wales technical teachers joining the Commonwealth Teaching Service. Therefore, it will have some impact on technical education at the secondary level- that form of education which I believe is of greatest direct relevance to obtaining employment. This is particularly true in today’s employment situation. Despite the unemployment created by Labor’s disastrous economic policies there is still a shortage of tradesmen over a wide range of jobs.

The Tertiary Education Commission Bill will have a direct impact on technical education at the post-school level. This is becoming an increasingly important area. It is an area of real importance to Australia’s future development, productive capacity and growth in prosperity. The Tertiary Education Commission Bill will establish the Tertiary Education Commission to develop and recommend policies on the basis of Commonwealth financial support for institutions in the whole post-school sector of education throughout Australia. The Commission will be concerned with balanced and co-ordinated development and encouragement of diversified opportunities in post-school education. The new Commission will play a significant role in shaping and influencing the future character of postschool education in Australia. In the Bill tertiary education encompasses a wide range of courses in the technical and further education area. The new Commission is designed to overcome problems of co-ordination between the existing commissions.

Several reasons make this Bill a major advance on earlier proposals. One is that it includes -. the important area of technical and further education. This shows an appreciation by the

Government of the inevitable working interface between colleges of advanced education and institutions of technical and further education and the continuous need to rationalise functions between the 2 areas. It demonstrates the Government’s awareness of the need to upgrade technical and further education in the post-school sector. The Government is committed to devoting special attention to technical and further education. For too long it has been the area receiving least consideration from governments in postschool education, particularly as far as the allocation of resources is concerned. The new Commission has an important role in the development of these resources and of co-operative arrangements with the States for the support of technical and further education.

I should like to return for a few moments to addressing some remarks to the importance of the secondary sphere as far as employment is concerned. I particularly wish to emphasise the importance of the secondary sphere in preparing people for employment. Of course education is important in playing its role of preparing people for life and of providing the opportunity to learn about self-fulfilment, about a satisfying life style and about how to make an overall contribution to the community. However, the best contribution that can be made by any individual to the community is to be gainfully employed in a productive capacity. Unless the education system ensures that school leavers are competent in the basic skills they need for employment so that they can obtain a job, they will not be able to contribute in this way. Also of course, without a job, their opportunity to enjoy a satisfying life style is considerably diminished, although the deliberate dole bludgers in our community may dispute this assertion.

The basic skills required for employment and on which others may be built are the old 3 Rsreading, writing and arithmetic- which may be summarised as literacy and numeracy. Evidence recently collected on levels of literacy and numeracy among Australians demonstrates that there is great cause for concern. Lack of competence in those areas is particularly evident among young people. Illiteracy is now most common among the 1 8-year-old to 23-year-old age group. A number of reports published in 1976 drew attention to the problems of literacy and numeracy in Australian society in general and within the education system in particular.

It has been estimated that more than 225 000 Australians do not have the level of literacy demanded of most 10-year-old children. A New South Wales Department of Education survey has provided that information. A White Paper now being prepared in South Australia shows that 1 7 000 English-speaking residents of Adelaide are illiterate. In schools the illiteracy problem has become acute. Education authorities in Victoria have estimated that 40 per cent of secondary school children have extreme difficulties in reading, while 20 per cent cannot read at all. Many such people are very skilful at covering up their illiteracy, making it more difficult to detect the real extent of the problem in this area. At least 20 per cent of first year apprentices have a reading ability below that required to follow trade manuals and text books.

When the Printing and Allied Trades Employers Association of New South Wales advertised for apprentices earlier this year- for the first time in its history, I might add- the senior industrial officer of the Association, Mr Peter Allen, said that employers were worried by the shortage of adequately educated young people. He went on to say:

Our members had 40 apprenticeship vacancies this month but out of the 80 or so who applied none met the educational requirements.

About half the students in the arts faculty of the University of Adelaide have minor difficulties with spelling and pronunciation and an occasional lack of clarity in written expression, according to a recent survey. I can see that that is of as much concern to the honourable member for Wakefield (Mr Kelly) as it is to me. The most disturbing comment of all, however, was that in one department the worst English was written by school teachers doing part time courses.

Mr Lionel Bowen:

– He is very modest, of course.

Mr CHAPMAN:

– The honourable member for Wakefield is a very modest member of Parliament, as we all know. The Australian Council for Educational Research took a survey of 10- year-old and 14-year-old students and found that many had learning difficulties that were related to poor literacy and numeracy. The Council’s findings were published in a report to Schools that highlighted the problems. It must be pointed out that it made no attempt in that report to identify the problem areas. Indeed, there was little information in the report to identify the problem areas in the school system. Most of the blame seemed to be attached to the student himselffor example he travelled so much that he missed school, he had a prolonged illness or some such reason. However, regardless of the various qualifications and explanations that might be advanced to mitigate this picture, there is no escape from the fact that over the past 10 years or so, despite the tremendous increases in the amount of the taxpayers’ money spent on education, standards in this country have dropped. That is a major reason for the startling rise in illiteracy.

Furthermore, many people who are involved in education are in agreement about the major reason for the decline: It has been caused by the increasing incursion into our schools of what is called the progressive system of education. The bright child with ambition will impose selfdiscipline on himself, even in a very free atmosphere of learning. The children who suffer most from the new, less formal methods of education are those of average ability and limited selfdiscipline. In a class in which there is free or almost free expression the child will tend to reject what does not come naturally. There must be, and fairly shortly, a major re-think of our present system of teaching the 3Rs to overcome the faults inherent in the progressive system.

Apart from its inadequacy at the secondary level, the progressive system of education has also has a detrimental effect at the tertiary level, specifically in the training of teachers. An increasing stress on academic, sociological and theoretical aspects of education has been to the detriment of the more specific training in practical techniques. The Schools Commission chief, Dr Ken McKinnon, recently put the situation bluntly when he said:

The stress on academic performance in the training of teachers has devalued practical skills so that insufficient time is given to practical techniques of teaching reading and teachers are accordingly less well prepared.

The problem has been highlighted by a recent report by the House of Representatives Committee on Specific Learning Difficulties, which was a very good report. It reported that teacher training programs contain an inadequate amount of compulsory course work in such subjects as the teaching of reading, basic numeracy and coping with learning difficulties. Such statements will not surprise those who believe that some teacher training institutions have concentrated more on empire building processes than education. The House of Representatives Select Committee was critical of the fact that the number of hours devoted to the teaching of reading in teacher training colleges is nowhere near the minimum recommended by the British Bullock report or the International Reading Association. However, it was unable to determine whether Australia’s education standards were improving or deteriorating. Apart from the Australian Council for Educational Research’s study of 10-year-old and 14-year-old students there is limited reliable national data on the overall incidence of learning difficulties or of particular difficulties. The Committee said that the survey confirmed, however, that there is a considerable problem in Australian schools and a significant number of children are failing to reach adequate levels of literacy and numeracy.

Apart from inadequate teacher preparation, evidence suggests that the age structure of teachers is a contributing factor to our educational problems. The bulk of teachers are now in the twenties age group. There are relatively few in the senior age brackets. No matter how good they are as far as ability is concerned, their lack of experience in terms of years spent as a practical teacher will restrict the capacity of these young teachers to identify and correct learning difficulties in school children. Children can be stretched in their capacity to absorb and learn effectively. One headmaster of my acquaintance believes that young teachers lack the experience to assess and use this capacity that is inherent in school children. These problems are very real and urgently need to be reviewed.

There is an urgent need for specific programs to overcome problems of literacy and numeracy. In Adelaide the Department of Further Education is conducting literacy courses for 130 students. Eleven hundred people are enrolled in a course run by the New South Wales Education Department. This course began in 1971. But much more needs to be done to overcome the problems of the 225 000 Australians who cannot read or write. One of the real problems in this area is that many people avoid remedial courses of this nature because of the embarrassment that may be caused to them personally. A campaign was launched in this regard yesterday by way of an advertisement in the Australian that I see the honourable member for Wakefield is giving very close attention.

Mr Kelly:

– I am trying to read it.

Mr CHAPMAN:

-I hope that the honourable member for Wakefield does not need to take a remedial reading course. I see that he is giving it very close attention. I hope that he is learning something from it. This advertisement launched a campaign to raise the level of debate as far as remedial training is concerned in the very important areas of literacy and numeracy. I believe that it is a very important step in the right direction to overcome the reticence of those needing help. Some of the people in the community who see this advertisement may be aware of people with difficulties in this area. I hope that they will direct them to the appropriate people from whom they may obtain assistance. However, I believe that more needs to be done in the first place by giving close attention to the problems I have highlighted in our education system to ensure that the problems of literacy and numeracy do not arise. Unless the literacy and numeracy problems are overcome employment opportunities will remain limited. Young people also will be prevented from taking advantage of the expanded opportunities in technical and further education which are provided for by the Tertiary Education Commission Bill and to which I would now like briefly to refer.

In October 1975 the Liberal-National Country Party policy statement on technical and further education stated that the Technical and Further Education Commission’s work has drawn attention to a neglected area of education activity and that its recommendations will receive the coalition’s close and detailed consideration. It went on to state that the Liberal and National Country Parties would consult with the States to determine methods by which they could promote and attract appropriately qualified persons into technical education. In August 1976 the first Technical and Further Education Commission report for the 1977 to 1979 triennium was presented. The amount of money available to the Commission for 1977 was $73m, an increase in real terms of 5 per cent. Instructions were given by the Government to the Commission that this was to grow by at least 5 per cent per annum in real terms for 1978 and 1979. 1 again stress strongly that despite the fact that the Government has had to cut back on expenditure in so many areas to overcome the problems it inherited from the spending sprees of the previous Labor Government, in this very important area it has made a significant increase in spending in real terms. This demonstrates the Government’s very definite commitment to this area of education. Senator Carrick in his ministerial statement of November 1976 stated:

It should be emphasised that the Government continues to give technical and further education a high priority . . .

In January 1977, in announcing the arrangements for the new post-secondary education commission, Senator Carrick said that it was the Government’s firm intention to pay special attention to technical and further education, particularly in the allocation of resources. I think that gives the lie to the statements made earlier by the honourable member for Kingsford-Smith. In March 1977, in Wagga Senator Carrick made a significant statement on the whole tertiary education system. It should be noted that once again the thrust of the statement was directed to technical and further education. Senator Carrick said that Cabinet had authorised him to announce that it was the Government’s firm intention to pay special heed to technical and further education, once again with particular reference to the allocation of resources. From these statements we see that the Government is giving a high priority to this important area of education. Of course, as I mentioned earlier, it is a very significant area.

At the moment Australia is not obtaining sufficient skilled craftsmen to continue with its development projects and to carry on in other important areas of industrial activity where skilled craftsmen are necessary. Unless we have an increased enrolment in technical and further education, an increased opportunity in that area and an increased output from these institutions, Australia ‘s industrial productivity and’ ultimately its future prosperity will lag behind that of competitors overseas. Therefore this area should continue to receive the high priority which the Government has demonstrated both in the legislation being debated in the House this evening and in the allocation it provided for this area of education in the last Budget. I commend this legislation to the House. I urge its speedy passage, and I certainly oppose most strongly the amendment moved by the honourable member for Kingsford-Smith.

Dr JENKINS:
Scullin

– It is very interesting to follow the honourable member for Kingston (Mr Chapman). He is one of those young honourable members who came into Parliament on the tide. He has absorbed the mottoes that are being mouthed by his colleagues. I heard him use the term ‘dole bludger’. I guarantee he has not found one. He is like the rest of his colleagues. There has been a complete absence of any proof for that phrase that has been bandied around so much. He talked about the profligate spending of the Labor Government; yet this area of education is the very area where so much of that expenditure occurred. So much was needed to solve the problems present. He said that his Government’s commitment to education is undoubted. There were mass meetings of teachers and parents recently in most capital cities. If he heard the derision with which the televised comments and the guarantees of the Minister for Education (Senator Carrick) were received he would not be too happy.

I return to the legislation before the House. Like the honourable member for KingsfordSmith (Mr Lionel Bowen) and the honourable member for Kingston, I think we are agreed that the Commonwealth Teaching Service Amendment Bill is a necessary measure to preserve the right and benefits of those teachers who have transferred. Having said that, we can concentrate on the Tertiary Education Commission BUI. My first attitude to this was that we should completely oppose the inclusion of the Technical and Further Education Commission in this Tertiary Education Commission. My attitude has somewhat softened since the proposal was put forward. One of the reasons why, whilst the Opposition is critical, it is prepared to give the BUI a go is that it gives recognition to technical and further education as a field of tertiary education. I suppose one could comment that this is more than has happened before in the real legislative sense. The Minister for the Capital Territory (Mr Staley) in his second reading speech, as reported on page 1154 of Hansard of 2 1 April, said:

To exclude technical and further education from the coordinating mechanism would be to fail to appreciate the inevitable working interface between colleges of advanced education and institutions of technical and further education and the continuous need to rationalise functions between the two. It would ignore also the need to upgrade the role of technical and further education in the post-secondary sector.

I do not know that the argument is necessarily a valid one, but it raises a matter which makes this Commission believable and makes one hope that perhaps with the warnings the Opposition has given in its amendment something might be achieved. One of the questions we have to ask is whether the 3 groups to be included in this Commission are compatible. One would have thought that the universities and colleges of advanced education fitted into a compatible group because of a similarity in structure and in many of their courses; but I would remind the House that only last year when the matter of academic salaries for staffs at universities and colleges of advanced education was brought before the Academic Salaries Tribunal the General Secretary of the Federation of Staff Associations of the Australian Colleges of Advanced Education was moved to comment in writing to the Minister for Administrative Services (Senator Withers) that in August he had advised the Minister of the serious educational implications that would flow from tacit acceptance of the Tribunal’s findings. He said in the letter that there should be an immediate review so that rebuttal evidence could go forward. Referring to the Tribunal’s remarks, he said:

These remarks, often unsubstantiated, will do serious harm to the colleges of advanced education and therefore to the community, which looks to the colleges to provide an alternative form of tertiary education which must not be seen in their eyes as being in any way inferior to a university education.

That illustrates that there will be some difficulties in marrying even the universities and colleges of advanced education in this sort of set-up. The universities, through the Universities Commission, have a much longer history of operating in the political and educational field of getting grants. They know the tricks of the trade.

Mr Martin:

– They are also more elitist.

Dr JENKINS:

– They are elitist in many ways. They have a clout that perhaps the colleges of advanced education do not quite have. Certainly the technical and further education institutions do not have this experience. They do not have this clout. One is concerned that technical and further education may be the Cinderella and may become submerged in this Commission. After all, the question of the States providing 83 per cent of the finance has been nonchalantly shrugged off. It is a pretty important factor in the matter. It means that technical and further education is one area of tertiary education that has some differences from the other 2 areas, that there is this greater State involvement, and so much will depend on the performance of State governments. State governments are not necessarily good performers. Those are some of the questions we raise, some of the reasons why we suggest in our amendment that there must be adequate financial resources to raise the standards of the technical sector to the levels envisaged in the original Kangan report.

The other aspects of the amendment are no less important, and I refer to the measures to be taken to ensure that technical education in Australia is not further isolated from secondary education. I notice that the term ‘post-school education’ is being used to describe tertiary education. It is very easy to see the stream of secondary education leading to the universities and colleges of advanced education. It is much less easy to see a consistent stream in the secondary field leading to technical and further education. If one compares developments in that field in the various States there is a very marked difference. For example, I submit that Victoria has a much more clearly defined system for secondary education in the technical field leading into this area, and I am concerned that we might lose sight of this problem if technical and further education in the tertiary sense becomes submerged in the Tertiary Education Commission.

Finally, there is the matter of the term ‘further education’, and much of this is concerned with adult education. One does not hear it talked about too much in parliamentary circles, in political circles, or even in education circles, yet in the past it has shown fuckers of becoming a very fruitful field for enabling the continuance of lifelong education. One would like to feel that there is a possibility that it will be properly followed through. In speaking to the amendment, the honourable member for Kingsford Smith gave some notice that in the Committee stage the Opposition would be moving amendments requiring not only the new Tertiary Education Commission to present an annual report to the Minister for Education which he must then present to Parliament, but that the 3 advisory councils should do so also. The reason for that is that decisions in this field must eventually be political. It is the Government’s responsibility to take the decisions. It is the parliamentary responsibility to oversight those decisions. But when the Government pre-empts the Commission’s findings, or the Council’s findings, as in this case, by giving it strict guidelines within which to work, we have no way of assessing the real needs in the field and applying ourselves to questioning in parliamentary oversight whether the Government’s decision was responsible or correct. It is up to the councils and the commission to be able to report freely, as the Technical and Further Education Commission did on the 1977-79 triennium, and to be able to report critically on the needs, as the TAFE Commission did, battling against guidelines which were laid down. Such reporting is necessary so that we know what the needs are in a particular field, whether it be universities, advanced education or technical and further education, and can analyse for ourselves just how bad or how good the Government’s decision on expenditure and encouragement in certain areas will be.

There is much in the report of the TAFE Commission for 1977-79 that leads one to be concerned about the joining of the Commissions. One wonders whether the extent of technical and further education is really realised. I refer to some of the attitudes of the Commission. In paragraph ( 10) on page xxv of its summary of conclusions the Commission acknowledges that there is a need to continue to co-operate with the tertiary commissions in examining the overall provision but it comments that there is an equally strong need for action at the State level to ensure rationalisation of educational resources in the post-school sector. One would like to know who will report on that, who will give us the information on that and what is the extent of the technical field.

Paragraph ( 1 3 ) of the summary of conclusions reads:

Interpreting available data conservatively, the Commission estimates that the equivalent full-time student enrolments of the State TAFE Departments/Divisions in 1975 were some 163 500 as compared with some 126 900 in universities and some 98 200 in colleges of advanced education. Put another way, TAFE is meeting rather more than 40 per cent of the total institutional load of post-secondary education.

As to funding, it says:

Relating student load to resources available reveals that the public sector has been providing per equivalent full time student in TAFE only 37 per cent of the funds provided per equivalent full time student in the tertiary sector.

That leads me to have some concern as to what will happen when the 3 areas in tertiary education are put up against one another. As I mentioned previously, one concern is that there is a much greater State financial involvement in the area of technical and further education. In its report the Commission comments as follows: . . . most States have been able to do little in recent years towards meeting TAFE’s needs for accommodation and for programs to improve its efficiency.

So one sees technical and further education going into this new Tertiary Education Commission not in quite the same way as universities and colleges of advanced education, because of the differences in responsibility and financing and because of the greater involvement in it of State initiatives and State programs. It is difficult to see how a combined Commission will be able to give a fair picture of what is needed because there will be many factors outside the control of that Commission, whereas those factors are much more readily controlled in the field of universities and colleges of advanced education.

I think that covers the 4 points in the amendments. There are 3 amendments to the second reading of the Bill and 2 proposed for the Committee stage. My colleague the honourable member for Kingsford-Smith has dealt with the first part which points out the disadvantaged position of technical education in Australia and which requests that its recognition not be overlooked. I know that assurances were given in the second reading speech by the Minister for the Capital Territory, but we are faced with the inherent problem of an inbuilt elitist attitude that this area of education may be disadvantaged. If none of the amendments are carried, I hope at least that in the Committee stage we will insist that annual reports from the Commission and the 3 councils are presented to enable not only governments to make decisions but also the Parliament to exercise oversight.

Debate interrupted.

page 1256

ADJOURNMENT

. Government Economic and Foreign

Polices- Australian Labor Party- Question on Notice: Superannuation-Pritchard Steam Power Unit-Public Service

Mr SPEAKER:

-Order! It being 10.30 p.m., in accordance with the order of the House of 10 March 1977 1 propose the question:

That the House do now adjourn.

Mr MORRIS:
Shortland

-In the few minutes available to me this evening I want to say something to the Parliament of the ruses and the ploys that have been used by the present Government to try to distract public attention away from the real issues that face the nation. Those real issues are runaway inflation and record unemployment. Despite all the wishing of the Ministers assisting the Treasurer (Mr Lynch), by the Treasurer himself and by the Prime Minister (Mr Malcolm Fraser) those problems will not be wished away. I thought that the remark made in the chamber last Wednesday about the wishing-well policy of the Prime Minister in relation to the prices-wages freeze was an excellent way of describing what he was about. The nation faces a very difficult time. In particular, those people who are unemployed, who are unable to get work, who have families to support face a far more difficult time than other persons in the community. At a time like this what is needed more than anything else is a government, an administration and legislators with compassion and understanding for people in difficulty.

I think that everybody in the nation recognises that irrespective of the government, whether it is a State government or a Federal government, governments have problems in trying to find solutions to the difficulties that beset our nation and people. But all of those people would like to think, ‘particularly at the Federal Government level, we had administrators who had some compassion and some concern for the difficulties people find themselves in and for which they have no responsibility whatsoever. The contrast to be drawn is, on the one hand, people looking for compassion, looking for understanding and looking for sympathy and on the other hand a government that is devoid of compassion. There is no need for the Government and Government back benchers including the oncers to be callous in their approach to the needs of the community.

I mentioned in my opening sentence the ruses and the ploys that have been used by the present Administration in trying to direct attention away from those difficult problems of unemployment and inflation. Last year, we had the first big diversion- the threat from the Indian Ocean. The hordes were, going to row across in their rowing boats and invade our western shores. That exercise went on for some time until it was disputed in the Government ranks as to whether or not that threat existed. But it was a callous exercise in directing attention away from the real problems.

Then we have the continuing saga that has gone on from the 1880s and 1890s of unionbashing. Down through the decades, whatever ails the nation is the fault of the unions. Despite this, the capitalists and the nation have become wealthier. The wealthy families have done better. The nation has progressed. We have fought in a number of international wars. The unions have developed. But the trade union movement has always been said to be at fault.

Now we have the latest brainwave. I do not know whether this idea came from the McKinsey stable or whether it came from Treasury advice. It seems to me that the Prime Minister oscillates from the advice given by McKinsey and Co. Inc., the management consultants, on the one hand, to that given by Treasury on the other hand. I would be very interested to know whether this week will be McKinsey week or whether it will be Treasury week. I am sure that the Government back benchers and oncers would like to know.

The most cruel, inhumane and callous exercise of all is that conducted against those people who are continually unemployed, those people who through no fault of their own do not have any say over the job opportunities that are available to them, who have families to keep and who are persecuted by the Government and its back benchers as being some kind of bludgers. I draw the attention of the House to the fact that if we are to deal with people who cheat, let us look at the tax cheats- the supporters of honourable members on the Government side- who have got away with far more revenue than the minuscule amounts obtained by those people who are less honest than they should be in making claims for assistance in times of difficulty. I ask honourable members opposite to have some sort of compassion and some kind of sensitivity for the people in desperate need today who need a government with compassion and concern, not a government that is based on a callous attitude towards its material possessions and gains in the community.

Mr GRAHAM:
North Sydney

-! think that some words of reply should be tendered towards the compassionate member for

Shortland (Mr Morris). I do not propose to treat him as though he is utterly devoid of intellectual integrity. I do not propose to suggest that he himself is not a person of compassion, but I feel that in the Party political sense it is necessary for me to point out one or two things that indicate the history of his own great political Party and its relationship to the term ‘compassion’. I think that the people here will remember that in 1974 when the Vietnam war concluded there were a number of persons living in Saigon who had been long in the service of the Australian people- persons who had been associated with the Australian Embassy and Australian military personnel and who were identified and known by the communist forces in that country. But in spite of all the applications made to the Prime Minister of the day, Mr E. G. Whitlam, and his Government these persons were turned away in a manner utterly bereft of compassion, utterly bereft of any recognition of service that they had rendered and most of them are by this time deceased.

I would also point out to the honourable memberand he may well recall- that in August 1968 when the forces of the Warsaw Pact invaded Czechoslovakia, criticism by the political party from the other side was not forthcoming. It is perfectly true that the honourable member for Reid (Mr Uren) and the honourable member for Lalor (Dr J. F. Cairns) and I think on a number of occasions my friend the honourable member for Hindmarsh (Mr Clyde Cameron) made critical comment about what the Russians were doing at that time but there was no widespread indication of a stricken conscience. There was no widespread demonstration of compassion. There was no widespread criticism of what the Government of the Union of Soviet Socialist Republics and the governments of the other nations of the Warsaw Pact were doing to the government in Prague.

The reference with the most callous expression of all related to people who were guilty of cheating in relation to social services is one that I can well understand and I have no doubt that the millions of dollars that are milked from Consolidated Revenue each year by clever people ought to be chased and ought to be investigated with a view to improving and increasing Consolidated Revenue and getting at those taxation cheats who have been successful in the past. I would point out that the records of the MenziesFadden Government got better and better as the years went by. I am not without some view that when the Whitlam Government was in office there were still methods being introduced to catch these people and I have no doubt that in the Treasury in 1977 there is as much vigilance as you could wish for.

I also have no doubt that the techniques of taxation cheating to which the honourable member for Shortland has referred will probably be improved from time to time in the most unusual manner. I would remind the honourable member that that usually happens when a former Commissioner for Taxation or Deputy Commissioner for Taxation retires after a long and distinguished career and then writes a book that says ‘These are the loopholes in taxation,’ and taxation avoidance then becomes more simple for those who seek to pursue it. One cannot hope in the moment or two available in this debate to deal with all of these matters but I would hope that one can refute the suggestion from the honourable member for Shortland that all compassion resides on one side of the Parliament and there is none on the other side. I refute that suggestion as being absolute and utter nonsense. I believe that the Labor Party ought to face up to the fact that its responsibility for the unemployment situation is undeniable. It is undeniable that it, by its profligacy, its stupidity and its way of spending public money as though it was going out of fashion, is largely responsible for the situation of misery in this country today. I believe that the bulk of the people of this country will recognise that fact and that it Will be demonstrated at the next Federal election.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I wish to refer to the devious and dissembling reply that I have received to question on notice No. 61.1 seek leave to incorporate the question and answer in Hansard.

Mr SPEAKER:

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

The question and answer read as follows-

Parliamentary Retiring Allowances Fund (Question No. 61)

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

asked the Treasurer, upon notice, on 9 March 1977:

  1. 1 ) Have the particulars sought in question No. 864 (Hansard, 14 September 1976, page 1027) ever been required by a member of the Parliament prior to the date upon which I placed that question on notice. If not, what is the justification for his statement that it is not the practice to supply the information sought.
  2. Is it possible for a public servant who retired now with a salary of $21,250 per annum, having attained the age of 65, and having completed 20 years of service, to receive a lump sum refund of all of the contributions that he has ever made to the Superannuation Fund plus a wholly Governmentfunded pension of 50 per cent of his salary.
Mr Lynch:

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

  1. As far as can be established, prior to 14 September 1976 no member had asked for details of the contributions paid by, or the benefit entitlements of, another currently serving member by way of a parliamentary question. My office and my Department from time to time receive inquiries, including some from representatives of the media, about the entitlements of particular members. The practice followed has been not to provide such personal details on the ground that they relate to personal financial affairs. Every request by a member or former member for advice as to his own entitlements or on the interpretation or application of the provisions of the Parliamentary Retiring Allowances Act 1 948 is, however, fully met.

  2. A public servant retiring at age 65 after 20 years service would receive a Government-financed pension of 50 per cent of his salary at retirement provided that:

    1. his 20 years service was a ‘period of contributory service’ for the purposes of the Superannuation Act 1976;
    2. he was an ‘existing contributor’ for the purposes of the Superannuation Act 1976; and
    3. as at 30 June 1976, he did not have any rejected units of pension under the Superannuation Act 1922.

In addition, the employee would be entitled to an additional age retirement pension, the annual rate of which would be determined having regard to his accumulated contributions (the amount of his stake in the Superannuation Fund as at 30 June 1976 and the amount of contributions paid to that Fund since 1 July 1976, including interest on those amounts since 1 July 1976) and his age on the last day of service. The maximum rate of additional pension allowed is an amount equal to 20 per cent of the employee’s final annual rate of salary; should the accumulated contributions be more than sufficient to provide a 20 per cent additional pension, the excess would be refunded to him. An employee may elect to receive a lump sum payment of his accumulated contributions in lieu of the additional age retirement pension.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I shall read that part of the question which asks:

Is it possible for a public servant who retired now with a salary of $2 1,250 per annum, having attained the age of 65, and having completed 20 years of service, to receive a lump sum refund of all of the contributions that he has ever made to the Superannuation Fund plus a wholly Governmentfunded pension of 50 per cent of his salary?

I do not blame the Treasurer (Mr Lynch). I blame the officer responsible for preparing the reply to that part of question on notice No. 61. The question was a straight forward one. The reply should have been straight forward. It could have been answered with one word- the word ‘yes’. Instead, the reply consists of no fewer than 222 words which are deliberately designed to obscure the simple fact that a level 6 officer of the Australian Public Service Will be entitled to a superannuation pension of $338 a week for life, plus every cent that he has paid into the Superannuation Fund since he first started his employment 20 years earlier, plus interest on moneys that have been paid by him into the Superannuation Fund after last year. Some permanent heads Will receive a pension of $375 a week for life, plus aU that they have paid into the Fund given back to them in a lump sum. No wonder the Minister for Administrative Services (Senator Withers) was moved to describe senior officers of the Australian Public Service as the ‘modern mandarins’.

Why was the author of the reply so dissembling in this matter? Why did he not give a straightforward answer to my straightforward question? Was he too ashamed to give a truthful and unequivocal answer, or was he just incapable of doing so? Perhaps he was embarrassed by the fact that if every employee in the Australian work force were to be given a noncontributory superannuation pension equal to 50 per cent of the retiring income the cost would total $4,000m a year. That would have to be placed upon the shoulders of private enterprise, alternatively, it would have to be met by the general taxpayer. Why go through the charade of paying a 5 per cent levy on salaries if the public servants are to have it all returned to them in a lump sum, plus a life pension equal to 50 per cent of their salary when they retire?

But the position is even worse than that. Now the Administrative and Clerical Officers Association, the union which represents the third and second divisions of the Public Service, has announced that it wants more. It says: ‘This is only the start. We want the rest of what we originally asked for, and we are going to campaign until we get it’. It is not getting enough. It wants the weekly pension indexed by 1.4 times the movement in the consumer price index so that if those officials are in that situation in 20 years time the automatic adjustment of the superannuation pension by 140 per cent of the CPI will put them even further ahead. I do not mind what they get, but they have got no right to ask the general public to give its servants something that the general public cannot afford to give itself. If the Australian Public Service is prepared to pay the extra taxes needed to extend its superannuation benefits to everybody else, I am all for a generous superannuation scheme for every Australian man and woman in the work force. If they are not prepared to do that, I will oppose any proposal that is put forward by public servants to put them in a better position than the public they are supposed to serve.

Mr BRAITHWAITE:
Dawson

-My concern tonight is to bring to the attention of this House the matter of the production of a steam engine by Mr Ted Pritchard. The name of the engine is the Pritchard steam power unit. This engine which has been fitted in a conventional motor car is capable of producing speeds of up to 150 kilometres per hour. It is a water boiler, fired by a petroleum based fuel, kerosine, diesel oil or alcohol. This is not the original, so far as a steamed powered motor car is concerned. In 1902 the Thompson steam powered car in Victoria travelled a distance of some 400 miles, which was a record for distance covered at that time. Unfortunately with no foresight, which is equivalent to our own generation’s lack of appreciation of the benefits of steam uses, little was done in technical, research or improving on this type of mobilisation. With such varieties of fuel bases available, this power unit should excite the interest of our engineers and planners, particularly as it is a locally produced unit and also in view of our diminishing reserves of fuel.

But little attention has been given to its potential. A few years ago Mr Pritchard drove this car to Canberra and demonstrated it to several Labor Ministers and parliamentarians. However, the favourable comment on its possibilities did not eventuate in any financial assistance. On 15 July 1975 it was reported that 3 prototypes of the engine and body were being built by the Federal Government at the Bendigo Ordnance Factory. In 1973 the Russians approached Mr Pritchard for details of the test run. Development of a steam engine in the United States of America are going beyond the preliminary stage. But out of loyalty to Australia, the inventor has no present desire to go out of Australia to sell or share his invention. Production of this unit may never be achieved. In a letter to a friend, Mr Pritchard in reference to an Australian Broadcasting Commission news item on the support for the project by the Australian Sugar Producers Association, said:

Actually we heard from friends that the resolution of the ASFA featured on the ABC news on Friday 1 8 March 1977.

It was a great boost for us to learn of this- particularly on that day, as that was the last day our company was liquid. We now have no funds at all and unless the Government comes forward with a grant the project will have to cease.

Other governments are helping national car manufacturers. Recently reported on 13 April 1977 was the French Government’s assistance and support to Renault’s new car manufacture. Every day we live, we live closer to or we bring our next generation closer to the crunch of the energy crisis. The end is already reliably estimated for our fossil fuels, particularly oil. We have in the Pritchard steam power unit an alternative source of power or fuel which will allow future generations to eke out our known limited reserves. One of the sources of power is alcohol which is derived from the plant sugar cane. It is an alternative by-product from sugar and manufactured from molasses. This is already being manufactured so that there is nothing new in its process of manufacture on a large scale. Certainly production costs are dearer at present but given the limit of time in which our normal source of fuels will be available, that is in 10 or 20 year’s time, in comparison this alcohol manufacture could be cheaper particularly when it is estimated that the cost of imported oil will be $70 per tonne. Power alcohol certainly is cleaner, and in an environment now facing heavy pollution it could be the answer to the problems of the exhaust fumes which are spread high and wide by uses of conventional fuels. The engine could, in time, be adapted for use in larger vehicles and tractors for rural industry and would bring all its advantages to a wider variety of users.

Mr Pritchard ‘s faith in his car, which has wide support, is complete. He is losing faith in a nation’s government that is not prepared to give his project support, particularly at a time when his own financial resources are finished. The ABC program last weekend demonstrated the need of Mr Pritchard and Australia to bring this project successfully to a conclusion. I add my voice tonight to spur our Government to give financial and technical help to this Australian project. This help is required immediately. Whilst I know that the matter is under consideration, I ask that the Minister for Productivity (Mr MacPhee), the Minister for Science (Senator Webster) and the Minister for National Resources (Mr Anthony) give this matter urgent attention.

Mr SCHOLES:
Corio

– I want to raise a matter which must be of serious concern to most members of this House. We have been told over a considerable period of time of the efficiency with which the Public Service has been able to operate despite staff cuts. I would suggest that some of the Public Service departments in which staff ceilings have been rigidly, or more than rigidly, applied have reached a point of collapse as far as service is concerned. The public is suffering because of the way in which staff ceilings have been applied. It seems to me that if the Public Service Board is advising the Prime Minister (Mr Malcolm Fraser) in respect of the statements he is making it is doing so from an ivory tower mentality and not on a practical basis of the actual effect of staff ceilings and the manner in which they are being applied, which is quite irrational and has no respect for efficiency or any other criteria.

This problem has quite a number of segments to it. For instance, it has been brought to my notice that Telecom Australia is now contracting out its typing work to Drake International, the most expensive organisation in Australia with which to have contract work done. Telecom has done this because it does not have sufficient staff in this area. The Department of Social Security has had to contract out its computer programming because it does not have sufficient staff to carry out this function itself. Waiting periods of up to 14 weeks are becoming regular in the child endowment processing section of the Department in Victoria and complicated cases are taking longer to be satisfied. People are being asked to wait by Public Service departments which are under-manned, especially in the technical area, sometimes due to staff being on annual leave or maternity leave, or other forms of leave. The Public Service is not able to perform efficiently because of staff cuts resulting from staff ceilings. The rigidity of staff ceilings has cut the level of administrative efficiency. There is also the serious problem that work which is required to be done, such as the processing and analysis and comment on documentation which should go before senior public servants in a refined form, is not able to be done. There is also the serious problem that public counter services and other public services are reaching a breakdown point. For instance, people who urgently need to be naturalised can expect to have their applications processed by the Department of Immigration and Ethnic Affairs within a reasonable period. A ‘reasonable period’ is defined as being a year, which seems to me to be an exorbitantly long period for persons wishing to become Australians to be held up.

As I have said, near breakdown conditions exist in the Department of Social Security. Officers of the Department of Employment and Industrial Relations face a hopeless task in seeking to match job vacancies to persons and to counsel persons who need counselling. This is not a quick process. It is one which often needs much time. But the staff is not available to undertake these tasks.

We hear a lot of nonsense, such as that which the honourable member for Riverina (Mr Sullivan), by way of constant interjection, has been trying to put. We have heard abuse of officers of the Public Service. My experience has been that officers, especially those who deal with the public, work very hard. Despite what some people outside Parliament and some people in this place might suggest, these officers are very conscientious in the work that they perform. But they are only able to do what is physically possible as individuals or as a group in any one day. It might interest the honourable member for Riverina to know, as a former Army officer, that the audit section of the Army has reached the stage where some files which it has ordered will never be found again because the staff is not available to return them from the places in which they are located.

Mr Sullivan:

– Sack the lot and it would be more efficient.

Mr SCHOLES:

-I think that the Army’s efficiency went up very greatly when the honourable member was elected to this Parliament. I am not sure what other measures can be taken to help. But I am making a serious charge and I suggest that it is about time that we looked at the reality of the situation rather than the public relations side of it.

Mr HODGMAN:
Denison

– Honourable members and certainly the people of Tasmania will be interested to hear that the honourable member for Shortland (Mr Morris) has found his voice again. He found it tonight in a spirited attack claiming that our Government is lacking in compassion, but the question which had been asked in Tasmania is why did we not hear his voice last week when our State was totally isolated from the mainland as a result of deliberate industrial action which he knew, or ought to have known, would have the most disastrous effect on the people of Tasmania, the individual travellers whose travels were interrupted and on the tourist industry.

This man, the shadow spokesman on transport- I suggest he is not a shadow, he is a phantom- did not say one word about the situation in Tasmania, and he has not said one word about the situation in Victoria. He seems to have lost his voice. He has a classic case of laryngitis. The question I ask is this: He holds the important shadow portfolio of transport. He is the Opposition spokesman on transport. Why is he not speaking up? Is it because the nulla nulla has been laid on him by Mr Hawke? Is it because he is frightened to offend the left wing industrial gangsters? Is it because he does not feel, representing the electorate of Shortland, that he can wear 2 hats? The point I make is one of great seriousness because the honourable member knows very well that a so-called gentleman’s agreement was entered into in 1971 whereby the Australian Council of Trade Unions guaranteed that Tasmania would be exempt from the disastrous transport strikes which have blighted our island for far too long.

Mr Neil:

– You cannot trust them.

Mr HODGMAN:

-The honourable member for St George knows full well that you cannot trust them. While that strike was absolutely strangling Tasmania, isolating us, disrupting us, cutting off our life links with the mainland, not a squeak did we hear from the honourable member for Shortland. The Minister for Transport (Mr Nixon) put the matter very well when he said that as far as Tasmania’s problems were concerned Mr Hawke did nothing and Mr Neilson did less.

The point I raise is this: Why is it that our friends in the Labor Party suddenly go silent while their trade union colleagues rape State after State? Last week it was Tasmania’s turn; this week it is Victoria’s turn. What is wrong with honourable members on the other side? Are they not prepared to stand up and say it is about time that certain industrial gangsters ceased using these sorts of tactics on the people of Australia? Are honourable members opposite not prepared to stand up and tell the truth because they are frightened about their pre-selection or their endorsement? If the honourable member for Shortland is not prepared to stand up and say something constructive about the future of Australia, I suggest that he should hand in his shadow portfolio- or rather his phantom portfolio. He ought to resign. We in Tasmania are sick and tired of a situation in which Tasmania is raped and violated with monotonous regularity by these industrial gangsters aided and abetted by the deafening silence of the honourable member for Shortland. I raise the question that I have raised previously and will continue to raise: How long can Australia put up with this situation? How long can we tolerate a situation in which we are held to ransom by an irresponsible few?

As I have said publicly- I repeat it now- the sooner we get the Industrial Relations Bureau legislation on the statute book, the better. The sooner section 143 of the Conciliation and Arbitration Act is amended, the better. The sooner we take the stock whip to unions which deliberately and unlawfully interfere with free trade and commerce between the States, the better. What a farcical situation it is that section 92 of the Constitution guarantees free trade, commerce and intercourse between the States.

Mr Jacobi:

– Do not talk rubbish.

Mr HODGMAN:

-Friends of the honourable member for Hawker- he is urging them on- are raping Tasmania whenever they feel like it. The situation has now reached the point where the people of Tasmania have absolutely had enough. We have had a gut full of these people. The sooner we get this legislation on the statute book, the better. Tasmania is part of the Commonwealth of Australia. None of the left wing industrial gangsters will cut us off.

Having said that, let me congratulate the Tasmanian members of the Transport Workers Union who voted unanimously to go back to work. They were not prepared to see Tasmania crucified. When their secretary went to a conference in Melbourne and asked for exemption for Tasmania he was told that Tasmania could go to hell, that it was just like any other State. On the credit side, I believe it might well be possible that the air traffic controllers might be prepared to adopt a more reasonable attitude and might be prepared to grant an exemption, at least in part to our State. But it will not be any thanks to the honourable member for Shortland and his parliamentary colleagues who stand by and permit industrial gangsterism to flourish, dishonouring not only their pledge to the Party and to the Parliament but also creating a situation where the only honourable thing the honourable member for Shortland can do is resign his shadow portfolio. He is a complete failure.

Mr MORRIS:
Shortland

-In the seconds remaining might I refute the tirade of hysterical abuse from the honourable member for Denison (Mr Hodgman). A Government’s role is to resolve problems, not create them. I say to Government supporters that if this is the way they set about managing Australia it is no wonder that Australia has problems. They do not convince or win the support of anybody in that way.

Mr SPEAKER:

-Order! It being 1 1 p.m. the House stands adjourned until 2.15 p.m. tomorrow.

House adjourned at 11 p.m.

page 1263

ANSWERS TO QUESTIONS UPON NOTICE

The following answers to questions upon notice were circulated:

Domiciliary Nursing Care Benefit (Question No. 26)

Mr McVeigh:

asked the Minister for Health, upon notice, on 9 March 1977:

Will he consider extending domiciliary nursing care benefits to all persons irrespective of age who need home nursing care and who fulfil all present conditions except the age qualification.

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

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

The domiciliary nursing care benefit has been the subject of examination by 2 Government established enquiries in the health and welfare fields- the Committee on Care of the Aged and the Infirm and the Task Force on Co-ordination in Welfare and Health.

Reports of these enquiries were tabled by the Prime Minister on 17 February 1977. The report of the Committee on Care of the Aged and the Infirm included a recommendation that a Community Care Program should be established. The Committee also recommended that ‘no new beneficiaries should be accepted under the Commonwealth Domiciliary Nursing Care Benefit after the introduction of a Community Care Program but the Committees advising on this Program should consider whether or not there is a need for some cash benefits’.

The Task Force on Co-ordination in Welfare and Health proposed in its report that the domiciliary nursing care benefit, with envisaged possible modifications, be included in a Community Health and Care Program.

When tabling the reports of the enquiries on 17 February 1977, the Prime Minister stated that the Government had not taken any firm decisions on the recommendations of the enquiries and that views expressed about the reports will be taken into account in the Government’s continuing examination of them.

I would like to thank the honourable member for raising this question of the statutory age eligibility criterion for the Domiciliary Nursing Care Benefit at this time and to assure him that this matter will be taken into account as appropriate by the Government in its consideration of the benefit and the recommendations in the reports of the enquiries.

Allowances: Overseas Travel (Question No. 53)

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

asked the Prime Minister, upon notice, on 9 March 1 977:

  1. 1 ) Is it a fact that he subscribes to the view that Ministers should use simple and precise language and avoid abstract generalisations.
  2. If so, will he have another look at his reply to question No. 1035 (Hansard, 9 December 1976, page 3720) with a view to giving me a simple and precise answer to the simple and precise questions contained in paragraphs ( 1 ) to (4) of that question.
Mr Malcolm Fraser:
LP

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

  2. I do not consider my earlier answer to be lacking in clarity, but for the benefit of the honourable member I provide the following details.

The current rates of overseas allowances used to calculate advances to Ministers and Opposition office-holders with an entitlement to overseas travel were approved by the previous Government on 20 June 1975. Advances based on these rates are normally paid to Ministers before they leave Australia, and on their return Ministers are required to repay any unspent portion. Under this Government, special attention is being given to this requirement.

Ministers may elect which of the following 2 options will apply:

  1. S75 a day, or SI 10 a day when accompanied by spouse- to meet all accommodation, meals, porterage, gratuities and other expenditure, or
  2. $35 a day- to meet porterage, gratuities, and incidental expenditure only- whether accompanied by spouse or not. In this case accommodation and meal costs are paid by Australian overseas posts and are recovered from the Department of Administrative Services.

There is within the advances paid to Ministers a minor component for hospitality. Where necessary, however, further hospitality expenses incurred by Ministers are met by Australian overseas posts and recovered from the Department of Administrative Services.

Alternatively, a Minister may seek a specific sum for hospitality from the Department of Administrative Services. This procedure is normally confined to visits to countries in which there are not Australian posts. As with other advances, any unspent portion of the sum must be repaid to the Department.

The maximum permissible expenditure on hospitality during any one overseas visit by a Minister is currently $1,000, unless a larger sum is specifically approved by the Minister for Administrative Services in respect of that visit.

Vietnamese Refugee Survey (Question No. 198)

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

am asked the Prime Minister, upon notice, on 9 March 1977:

Has consideration been given to resuming assistance, approved in July 1975 and terminated in February 1976, for Dr Jean Martin, within the aegis of the Academy of Social Sciences, to conduct a longitudinal survey of Vietnamese refugees resettled in Australia.

Mr Malcolm Fraser:
LP

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

I am advised that the Departments of Immigration and Ethnic Affairs and Social Security are examining the question of the longitudinal survey of Vietnamese refugees, originally proposed to be undertaken by Dr Martin, in the context of considering a much wider survey of refugees in Australia. However, no decisions have yet been made regarding this matter.

International Capital Market (Question No. 202)

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

am asked the Treasurer, upon notice, on 9 March 1977:

Can he say what were the conditions under which Venezuela, Mexico, the Philippines and Spain have in recent months each borrowed amounts of some one billion United States dollars overseas (Hansard, 1 December 1976, page 3021).

Mr Lynch:
LP

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

On the information available to my Department each of the countries mentioned by the honourable member had substantial recourse through orthodox channels to international capital markets during 1976.

Spain and Venezuela undertook individual borrowings as large as $US1 billion. Both of these borrowings were undertaken through international banking groups in the mediumterm syndicated loan market and carry variable or floating interest rates which are fixed at pre-determined intervals throughout the life of the loan and which are therefore subject to fluctuation during the life of the loan. The Spanish borrowing for $US1 billion for S years was arranged in August 1976 and carries an interest cost 1.37S percent above the London Interbank Offered Rate (LIBOR) for $US. The $US 1 billion loan for Venezuela for 7 years was arranged in October 1976 and carries an interest cost 1.125 per cent over LIBOR.

Mexico raised in excess of $US 1 ,000 million, in aggregate, during 1976, including a SUS800 million medium-term syndicated loan last November. This latter loan was in 2 tranches, comprising SUS400 million for a 5-year term carrying a spread of 1.5 per cent over LIBOR, and SUS400 million for a 7-year term with a spread of 1.75 per cent over LIBOR.

As far as I am aware, the Philippines has not borrowed substantial amounts in international capital markets in recent months although a number of Philippines public sector authorities undertook substantial borrowings (exceeding SUS665 million) in the medium-term syndicated loan market during the calendar year 1 976.

I am unaware of any special conditions associated with any of the loans obtained by the countries mentioned above.

Opium Poppy (Question No. 342)

Mr Bungey:
CANNING, WESTERN AUSTRALIA

asked the Minister for Business and Consumer Affairs, upon notice, on 10 March 1977:

What measures have been adopted by Commonwealth and /or State authorities to ensure that opium grown in Australia does not enter the illegal narcotic drugs market.

Mr Howard:
LP

– The following information is provided in answer to the honourable member’s question:

Cultivation of poppies for the extraction of medically valuable alkaloids and the by-products oil and seed is a well established industry in Australia. In 1 97 1 Commonwealth and State Government Ministers approved a recommendation of the National Standing Control Committee on Drugs of Dependence that, for the purposes of control and security, cultivation should be limited to Tasmania. This decision has been re-affirmed on several occasions since.

The United Nations Single Convention on Narcotic Drugs 1961 requires strict controls over opium poppy cultivation. The production and consumption of narcotics are supervised by the International Narcotics Control Board which requires estimates and returns and monitors the accountable documents required for every international narcotics transaction.

The process used in Australia involves harvesting the unincised poppies and extraction of alkaloids by chemical means.

Morphine extracted is either exported or converted to the far less abusable analgesic codeine. Opium is not produced.

Under the Narcotic Drugs Act 1967, my colleague the Minister for Health has powers covering the licensing and control of manufacture. My responsibility under this legislation relates to security of manufacture and handling. The companies involved are required to furnish detailed returns covering acreages, quantities harvested, morphine content and alkaloids produced after further processing. Officials authorised under the Narcotics Drugs Act carry out regular inspections of company records and security measures. With the close co-operation of local authorities, appropriate steps are taken to ensure that diversion does not occur during cultivation, harvesting, storage, manufacturing and transportation stages.

While I am not prepared to disclose actual details you may rest assured that all possible measures are taken to minimise the risk of diversion to the illicit market.

Telecom: Rural Telephone Extension Charges (Question No. 507)

Mr FitzPatrick:
DARLING, NEW SOUTH WALES

asked the Minister for Post and Telecommunications, upon notice, on 23 March 1977:

In the light of the extremely successful half-year to 31 December 1976 of Telecom Australia, is he prepared to request Telecom to review charges for rural telephone extensions.

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

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

The half-year trading surplus reported by Telecom Australia is applied to help in funding the current capital program of the Commission. Under the Telecommunications Act 1975 the Commission is required to fund a minimum of 50 per cent of its capital expenditure in any year from internal sources which include the trading surplus.

The policy in providing line plant for rural telephone services was reviewed last year when the free line plant entitlement was extended from 8 km to 12 km. Thus, those that reside beyond 12 km from the nearest exchange had their contribution payment reduced by $ 1280. Those located in the 8 to 12 km radial distance from an exchange now make no contribution at all. The contribution rate beyond the free line entitlement distance has been retained at $160 per ‘A km, although there have been substantial increases in cost since this figure was fixed in 1973.

When the charges for Commission services are being reviewed the needs of people who reside or conduct their business in rural areas are given particular consideration.

Foreign Fishermen: Unauthorised Landings (Question No. 345)

Mr Bungey:

asked the Minister for Health, upon notice, on 10 March 1977:

  1. 1 ) How many reports of landings on the north-west coast of Australia and adjacent islands by foreign fishermen have been received since 1 July 1975.
  2. Have any of these reports been substantiated. If so, what are the details.
  3. Did any reports refer to animals accompanying the fishermen; if so, were any such reports substantiated.
Mr Hunt:
NCP/NP

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

  1. 1 ) and (2) Only one substantiated report of an unauthorised landing by foreign fishermen on the north-west coast of Australia and adjacent islands has been received since 1 July 1975. The details of this incident were reported by the Minister for Primary Industry in response to Question No. 1765, Hansard, page 72 of 15 February 1977.

Evidence of human activity has been reported on two occasions at Browse Island and on two occasions at Scott Reef during the period concerned. Reports have been received on five occasions (other than the occasion referred to above) of landings or of evidence that landings have occurred on Ashmore Reef. Traditional Indonesian fishermen are permitted to land on Ashmore Reef to take on supplies of fresh water. As each of the five reports resulted from air surveillance, it was not practical to confirm whether traditional Indonesian fishermen were involved.

  1. No reports have been received that animals have been landed by foreign fishermen.

Model Food Legislation (Question No. 418)

Mr Lloyd:
MURRAY, VICTORIA

asked the Minister for Health, upon notice, on 17 March 1977:

  1. 1 ) What progress has been made with the compilation of model food legislation for application throughout Australia.
  2. What stage has been reached with the implementation of this model Act by the States and the Commonwealth.
  3. Has the unco-ordinated introduction of date stamp legislation by certain States upset the orderly introduction of, and contradicted the detail of, that model legislation.
Mr Hunt:
NCP/NP

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

  1. 1 ) and (2) The first draft model food Act, formulated by a joint Commonwealth/State Task Force, was referred by my Department to the States, Territories and, other appropriate Commonwealth departments for comments at the end of 1976. Comments are still awaited from some States and when these are received, a revised draft will be prepared.
  2. No. The intra-State pressures for the early introduction of date marking legislation have been recognised by the Food Standards Committee of the National Health and Medical Research Council (NHMRC) which has formulated a Standard for Date Marking of Packaged Short Life Foods. The Standard has been elaborated upon in close collaboration with State Food Advisory Committees, industry, consumers and other bodies.

I understand that date stamping legislation introduced by some States is interim legislation. I would expect that the NHMRC Standard, when finally approved by Council, will be adopted by States and Territories m a uniform manner.

Australian Citizenship (Question No. 520)

Mr McLean:

asked the Minister for Immigration and Ethnic Affairs, upon notice, on 24 March 1977:

  1. 1 ) Is it a fact that, at all citizenship ceremonies, applicants for citizenship of Australia are required to take an oath of loyalty to The Queen.
  2. When was the decision taken to remove the photograph of The Queen from the Certificate of Registration as an Australian Citizen which is presented to each person on his or her achieving citizenship.
  3. Why was this decision taken.
  4. Will he take action to re-instate the photograph to the certificate.
Mr MacKellar:
LP

– The answers to the honourable member’s questions are as follows:

  1. 1 ) Yes. Certificates of Australia Citzenship do not become effective in the case of grantees sixteen years of age and over until they take an oath or make an affirmation of allegiance to The Queen.
  2. The decision to remove the photograph of The Queen from Certificates of Australian Citizenship was taken in 1 973 by the then Minister for Immigration, when amendments to the Citizenship Act, including the design of the certificates, were under consideration.
  3. I am informed the decision was taken on the grounds that the Certificate should be distinctively Australian.
  4. I will see that the matter receives consideration when the design of the Certificate is next under review.

Cite as: Australia, House of Representatives, Debates, 26 April 1977, viewed 22 October 2017, <http://historichansard.net/hofreps/1977/19770426_reps_30_hor105/>.

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