House of Representatives
30 May 1977

30th Parliament · 2nd Session

Mr SPEAKER (Rt Hon. B. M. Snedden, Q.C.) took the chair at 2 p.m., and read prayers.

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The Clerk:

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

Public Libraries

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

That the public library services of New South Wales are inadequate both in quality and quantity and that the burden of provision is placed too heavily upon local government.

Your petitioners therefore humbly pray that your honourable House will ensure the implementation of the recommendations of the report of the Committee of Inquiry into public libraries as a matter of urgency.

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

Petitions received.


Petition to the Honourable the Speaker, and Members of the House of Representatives in Parliament assembled. The petition of the undersigned citizens of the Commonwealth humbly showeth:

That the undersigned are deeply concerned that abortion is the destruction of innocent human life.

That on 10 May 1973, the House of Representatives overwhelmingly rejected the Medical Practices Clarification Bill, which sought to legalise abortion on demand in the Territories controlled by the Federal Government.

That the Legislative Assembly in Canberra should consult Parliament again before discussing and debating the opening and operations of Population Services International and Preterm Foundation in Canberra.

That the situation regarding abortions in the Australian Capital Territory is the same as that in New South Wales where the statute prohibits abortion but allows a defence.

That the situation in the Australian Capital Territory has a great impact on situations in the States.

Your petitioners therefore humbly pray.

That the Federal Government will act immediately to prevent the establishment and/or operation of Population Services International and Preterm Foundation, and other private clinics, in the Australian Capital Territory.

That taxpayers’ money may not be used, through Medibank, to finance abortions.

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

Petition received.

Radio and Television Programs

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

That we believe that laxity in the control of broadcasting standards has given viewers:

  1. 1 ) poor quality programs
  2. 2 ) excessive violence
  3. 3 ) obsession with dehumanising sex and nudity
  4. an unrealistic presentation of life.

Your petitioners humbly pray that your honourable House will take steps to:

  1. 1 ) implement stricter quality control over Television and Radio to give viewers programs that are of a higher standard.
  2. ensure that the original official Program Standards Booklets are reinstated and their rules interpreted and enforced in accordance with the healthy social background of our traditional Christian culture and standards of citizenship.

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

Petition received.

Metric System

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled, The humble petition of the undersigned electors of the Division of Capricornia in the State of Queensland respectfully showeth objection to Metrics and request the Government to revert to the Imperial system.

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

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 Jarman.

Petition received.

Royal Commission on Petroleum

The petition of certain members of the Service Station Association of N.S.W. Ltd, and certain members of the motoring public of N.S. W. respectfully sheweth:

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 Dobie.

Petition received.


To the Honourable 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 on whale communication, behaviour and intelligence, and to the 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 Dobie.

Petition received.


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 Fife.

Petition received.

Television Programs for Children

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

That television is the single most influential medium for the dissemination of information and for the recording and development of our national identity and culture;

Children are the most important section of the viewing public in that they are most likely to be affected by the impact of television;

Australian children, on average, spend more time watching television than in school;

And believing that:

The basic problem behind the lack of programs designed for children is the fundamental divergence of aims between those primarily interested in the welfare of children and the commercial interests of television licensees and their shareholders.

We request:

The creation of an establishment to initiate, research, promote, co-ordinate, fund and produce material for children’s consumption through the medium of television, as recommended by Australian Children’s Television Action Committee in its submission to the Senate Standing Committee on Education, Science and The Arts 1973; The Australian Broadcasting Control Boards Advisory Committee Report 1974 and the Television Industry Co-ordinating Committee 1975, as a positive step toward providing better quality television for Australian children.

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

Petition received.


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

That the Charter of the United Nations clearly precludes it from interference in the domestic affairs of a country or from obstructing the free transmission of news and information between individuals and between nations.

That the United Nations, in apparent illegality, has imposed many restrictions and sanctions upon Rhodesia which has been remarkably free from the bloodshed and turmoil of Northern and Central African lands, even to the extent now of actively encouraging armed conflict against the legally elected Government of Rhodesia.

Lord Graham, as Minister of External Affairs and Defence has said ‘International Communism is our enemy, all this talk of political advancement and majority rule is no more than a smokescreen in the early skirmishes of an assault upon the whole of Africa … It is even difficult to see this enemy because it is not merely attacking us, but on a broad front is attacking the whole world order, it’s standards, it’s law and order, it’s moralities, it’s churches, it’s patriotisms, it’s philosophies and even much of it’s learning . . .

That Communist Chinese infiltration in much of Africa over many years, and Cuban Communist troops reported to number 25 000 are dominating nearby Angola and possess modern missiles etc.

It is urgent that Mozambique, now under Communist domination and which has a common border with Rhodesia, does not receive any further aid from the Commonwealth Government of Australia, which has benefited mainly the terrorist guerilla movements that are responsible for the deaths of many Rhodesian people. It is urgent for Australian people to determine for themselves the actual facts of the Rhodesian struggles.

It is urgent that the House of Representatives in the Parliament assembled, will observe common justice and proper humanity by inviting only authorised representatives of the present Government of Rhodesia, to do what they have been deprived to do previously, present their case fully and publicly so that this can be examined and tested, without interference, and so that the eventual impact on Australia’s own security and defence alliances can be gauged with better accuracy.

Your petitioners request urgent action to be taken immediately.

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

Petition received.


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

  1. 1 ) That the use of uranium as a source of energy is currently unacceptable as it presents problems including radioactive waste, military implications and environmental degradation.
  2. ) That there can, at present, be no assurances that radioactive materials exported for peaceful purposes will not be used in the production of nuclear weapons.
  3. That there is not, as yet, any known safe method of disposing of radioactive wastes, nor is there likely to be.
  4. That the export of uranium from Australia is internationally irresponsible and is not, in the long term, of benefit to Australia.
  5. That export of uranium from Australia discourages importing countries from investing research and development funds in finding viable alternatives.
  6. That only the overdeveloped industrial nations will benefit from Australian uranium and the gap between these countries and the energy starved third world will increase yet further.
  7. That the securing of land rights by Australian Aborigines, promised by successive governments, is prejudiced by uranium mining.

Your petitioners therefore humbly pray that the Australian Government will immediately cease the mining and prohibit the export of uranium until perfectly safe methods of final disposal for radioactive wastes have been guaranteed; will greatly increase expenditure on research into safe, clean and inexhaustible source of energy; and will aid underdeveloped countries in their efforts to secure a fair share of the world ‘s energy resources, while at the same time honouring its obligations to the future of humanity.

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

Petition received.


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

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

  1. Be faced with complicated variations in his or her personal income taxes between States; 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.


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 although we accept the verdict of the Australian people in the 1 975 election, we do not accept the right of a Governor-General to dismiss a Prime Minister who maintains the confidence of the House of Representatives.

We believe that the continued presence of Sir John Kerr as Governor-General is a cause of division among the Australian people.

Your petitioners therefore humbly pray that your honourable House will call on Sir John Kerr to resign as Australian Governor-General.

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

Petition received.

Industrial Action

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 Cowper respectfully showeth:

That we:

  1. Are deeply concerned about the action of the Australian air traffic controllers engaging in an illegal strike,
  2. Are dismayed by the inconvenience being caused to the public travelling locally and overseas,
  3. Are concerned about such irresponsible strikes continuing to damage Australia’s credibility overseas in both commerce and industry,
  4. Think there is little reason for special treatment for such a ridiculous request as a 36 per cent rise when almost the whole of the Australian work-force has been prepared only to receive indexation awards because of the difficult economic conditions,
  5. Regard the Federal, State and local government bodies as the democratically elected organisations to run the country, and think that other organisations must be restrained from further damaging the economy and be made to pay for disruptive strikes,
  6. Feel the Australian economy must be protected from further loss in revenue, and
  7. Suggest in the present situation that defence personnel should be used to carry on the functions of the striking unionists, a law should be enacted to enable private citizens to recover costs, regulations should be introduced to make all organisations use the appropriate channels if private talks fail, and the Government should have power to expedite hearings if industrial action is pending.

Your petitioners therefore humbly pray that the Federal Government take immediate steps to enact appropriate legislation to safeguard the public against irresponsible strikes.

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

Petition received.

Estate Duty

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

  1. 1 ) That there are an increasing of electors throughout Australia concerned to abolish Probate and Estate Duties imposed by the Commonwealth Government of Australia and the respective State Governments.
  2. That it may not be possible to forthwith abolish Estate Duty because of the current economic situation.

Your petitioners therefore humbly pray that the House of Representatives in Parliament Assembled should ensure that the incidence of Estate Duty be phased out commencing in the financial year 1977-1978 and be finally abolished within five years or such earlier date as reasonably possible.

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

Petition received.


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

That the 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 you 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 movement.
  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 Yates.

Petition received.

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Acting Prime Minister · Richmond · NCP/NP

– I inform the House that the Minister for Industry and Commerce (Senator Cotton) left Australia yesterday to represent the Government at Western Samoa’s independence celebrations. During his absence the Minister for Veterans’ Affairs (Senator Durack) will act as Minister for Industry and Commerce. The Acting Minister will be represented in this chamber by the Minister for Business and Consumer Affairs (Mr Howard). I inform the House also that the Minister for Transport (Mr Nixon) leaves Australia today for discussions in Europe,

Canada and the United States. During his absence the Minister for Productivity (Mr Macphee) will act as Minister for Transport.

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-I ask the Minister representing the Minister for Social Security: Is it a fact that section 7 of the Social Services Act 1947-76 provides that the Director-General of Social Services shall be subject to any direction of the Minister in the administration of that Act? Is it also a fact that on 23 March 1976, the Minister for Social Security, in a Press statement and in subsequent correspondence, issued a directive to the Director-General that unemployment benefits would not be paid to school leavers during the long vacation and that this blanket policy was subsequently found to be invalid by the High Court? As the Director-General of Social Services stated on Friday that an automatic review of the claims of school leavers for benefits will not be undertaken by his Department, will the Minister, in accordance with section 7 of the Act, now instruct him to review all of these claims, or does the Government now disclaim all responsibility for its arbitrary and apparently illegal attitude of ignoring the High Court decision?

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

– I do not have at my disposal all the details about the matter to which the honourable member refers. I shall therefore refer the substance of his question to my colleague, the Minister for Social Security, in the course of the afternoon. However, I seek leave to have incorporated in Hansard a Press statement and also a determination that was made by Mr Daniels, the Director-General of Social Security on 27 May 1977, which may be of interest to honourable members.


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

The documents read as follows-


Miss Karen Green Unemployment Benefit

The Director-General of the Department of Social Security Mr L. J. Daniels today made available his Determination in the claim for unemployment benefit by Miss Karen Green. Following the Judgment by Mr Justice Stephen in the High Court case brought by Miss Green against the Commonwealth and the Declarations made by Mr Justice Stephen on 22 April 1977, the Director-General reviewed the claim for unemployment benefit made by Miss Green on 20 December 1976. In the course of his review and before finalising his Determination the Director-General sought advice on legal aspects of the claim from the Commonwealth ‘s legal ad visers.

A copy of the Determination is attached. A copy is being forwarded to Miss Green ‘s solicitor as requested by him.

Mr Daniels said that the Judgment of the High Court deals specifically with the case of Miss Green and he did not propose to initiate a review of any other claims for unemployment benefit by school leavers for the December-January school holidays. However, if following the High Court Judgment and the Director-General’s Determination in Miss Green’s case, any applicant seeks a review of his claim, Mr Daniels said that a review will be made.

On 20 December 1 976 Karen Green of 34 Allumba Street, Howrah, Tasmania made a claim for an unemployment benefit.

I am satisfied that on that date-

  1. she was unemployed and her unemployment was not due to her being a direct participant in a strike;
  2. she was capable of undertaking and was willing to undertake work which, in my opinion, was suitable to be undertaken by her.

I am not satisfied that by 20 December 1976 she had taken reasonable steps to obtain work suitable to be undertaken by her.

I therefore determine that on 20 December 1976 she was not qualified to receive an unemployment benefit.


Director-General of Social Services 27 May 1977

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– I direct my question to the Minister representing the Minister for Social Security. Is the Minister aware of results of studies by prominent British psychiatrists who have found that children under the age of 3 years and who constantly lose the care of their mothers through hospitalisation or regular attendance at child care institutions, suffer long term psychological and emotional damage? Will the Government evaluate the results of such findings, or initiate its own research program in this area before making any long-term decisions about future child care programs in Australia? Finally, in view of these findings, does the Minister think it advisable to consider a change in the direction of support for families by placing more emphasis on means tested income support schemes for parents of young children rather than devoting more resources to the building of child care institutions?


-The Government already makes a significant contribution towards assisting families to cope with the child rearing functions. It is worth noting that the family allowances this financial year were significantly increased in the last Budget and are expected to cost $ 1,032m. In June 1976, there were 3 997 148 children under the age of 16 years in 1 935 596 families receiving allowances. Expenditure on family allowances in 1976 totalled $244m. In regard to the children’s services program, the Commonwealth has appropriated $73. 3m for the current financial year for expenditure on children’s services. Of this amount, approximately $48m has gone towards the recurrent costs of pre-school education. This is a service which benefits children from approximately 3 years to 5 years of age. Most of the balance is spent on a range of services of a nature designed to support the family and in particular to give expression to the Government’s wish to give child care to needy families where the children otherwise would be without care of any kind. A number of research studies have been funded in previous years under the children’s services program, some of them relating to psycho-social development of children. As the study reports are completed and received by the Government consideration is given to the means by which the information may be made publicly available. With respect to the other aspects of the question asked by the honourable member, I shall be pleased to convey the substance of them to the Minister for Social Security so that she will be fully informed on the issues that are concerning the honourable gentlemen.

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

-I cannot confirm off-hand the dates and figures given by the honourable gentleman. I can check those. Of course, neither am I in a position to comment on any jobs which were pursued through a private employment agency. However, I snail endeavour to find out what jobs the person involved was referred to through the Commonwealth Employment Service office.

Mr Fitzpatrick:

– Can you answer the other part of the question?


-The Director-General of the Department of Social Security does not come within my area of responsibility.

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-My question is for the Treasurer. Is it possible to implement a $800m program to stimulate the construction industry and develop employment at a net cost to the Budget of as little as $200m? What would be the real effect on the deficit of such a program?


-The honourable gentleman is obviously referring to a Press statement issued recently by the honourable member for Oxley in a particular context which would be well understood and appreciated by both sides of the House. Given the extent to which the honourable gentleman has drifted in the leadership odds it is perhaps understandable that he should be firing off Press releases like a machine gun in a last ditch effort to impress his colleagues.


-Order! Perhaps the right honourable gentleman ought to answer the question.


-I accept what you say, Mr Speaker, although matters of form at present are not irrelevant to some members of the House. I note that the honourable member for Oxley is calling for an additional expenditure of $800m on the basis of major offsetting savings to be achieved, in particular by suspending the investment allowance. Even though the estimated cost of that allowance in 1977-78 is $550m, I say to the honourable gentleman and remind the House that this amount relates to incomes earned and investments undertaken in the current year. Therefore the savings could be made to the Budget only if the investment allowance were to be abolished or amended significantly on a retrospective basis.

The honourable member for Oxley said also that offsets could be obtained from personal and corporate tax collections and reduced unemployment benefits payments, but for the reasons that I have given about the investment allowance there would be no additional corporate tax collections next financial year. Even if the honourable gentleman’s quite unsubstantiated assertions about the creation of 50 000 jobs were correct- I interpose here that it was his Government that suspended its own job creation program- the saving on unemployment benefit payments, I am informed, would amount to about $75m only. The net addition to personal tax receipts would be only a little over $50m. The fact is that the net cost next year of the proposal of the honourable member for Oxley would be around $675m-not the $200m that he has claimed. The proposition he has put forward has been put forward on many occasions by honourable members opposite. It represents a lurch back to the policy errors of the past.

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Mr E G Whitlam:

– I direct a question to the Attorney-General. He will have noted that the Director-General of Social Security, in a statement which has just been incorporated in Hansard, announced that Miss Karen Green had not taken reasonable steps to find employment, in accordance with the Social Services Act, and stated that he had sought advice on legal aspects of her claim from the Commonwealth’s legal advisers. The Attorney-General might guess that ordinarily I would not ask him to table legal advisings; but, since the Minister for Social Security did in fact, during the early stages of this dispute- on 7 December last- table the advice that one of his predecessors gave to one of her predecessors with regard to students on vacation not being regarded as unemployed, I ask him whether he will table the advice given to the Director-General on a subject that concerns about 35 000 young applicants. If he is not prepared to table this further advice, can he assure the House that the Director-General’s determination was consistent with the advice that he was given by the Commonwealth’s legal advisers?


-I will look into the question that the honourable gentleman has asked. I do think that there has been some misconception as to the effect of the High Court’s decision. The High Court did not decide that Miss Karen Green was entitled to unemployment benefit. Indeed, the High Court could not so decide. As I think the honourable gentleman would well know, the High Court cannot replace the discretion of the Director-General with its own. All that the High Court could say was that the Director-General in the circumstances had taken into account a matter that he should not have taken into account. That was, in substance, the effect of Mr Justice Stephen’s judgment. I will look into the question of the advice given and see whether, in the circumstances of this case, it should be tabled.

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– I direct a question to the Minister for Post and Telecommunications. Did the Australian Broadcasting Commission’s radio stations 2NA and 2UH, on their program Talking Point from 5.30 p.m. to 6 p.m. on Sunday, 22 May 1977, broadcast an interview by a woman with 2 lesbians that was filthy and degenerate, with the interviewer appearing deliberately to lead the conversation on to what they said? Was this a disgusting episode? Is it a fact that this program is described as a current affairs program-


-Order! The honourable gentleman is not entitled to ask for an opinion of the Minister. He can ask for facts.


-Is it a fact that this program is described as a current affairs program for 10 to 16-year-olds? Who were the producer, the director and the interviewer in this degrading episode? Will the Minister call for the tape recording of this program and take the necessary action to stop such filth being broadcast to the Australian people?

Mr Eric Robinson:

– This matter had not previously been drawn to my attention by any member of this House or anybody else. The honourable member has made serious allegations. The Australian Broadcasting Commission does have set standards. They closely relate to the standards laid down for the broadcasting network by the Australian Broadcasting Control Board. I would be just as concerned as the honourable member or anyone else if those standards were in any way lessened to an unacceptable level. I shall look very carefully at the allegations of the honourable member. I shall make the fullest inquiries concerning them. Of course I cannot give all the information for which the honourable member has asked, but I shall ascertain what it is, let him know and take whatever action I believe to be necessary.

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-I ask the Treasurer: Do the official figures for the 5 months to May, when compared with the 5 months preceding the devaluation, indicate that the seasonally adjusted monthly average of export income since devaluation has increased by only 1.7 per cent while the average monthly import payments on the same basis have increased by 18.4 per cent and as yet have not shown up significantly in the consumer price index? Further I ask: Do these figures indicate that devaluation has not stimulated an exportled recovery, and instead threatens further erosion of real wages through substantial price increases which will stimulate inflation, particularly in the June quarter?


-No, the figures do not lead to the interpretations that the honourable gentleman has in fact drawn. I should have thought, in the first place, that the honourable gentleman might have paid tribute to the Government for getting the rise in the consumer price index in the March quarter down to 2.3 per cent. I should have thought also that the honourable gentleman might have been fair in saying that the impact of devaluation in that quarter, as interpreted by the Treasury and subject to endorsement by the recent decision of the Conciliation and Arbitration Commission, was 0.39 per cent or rounded at 0.4 per cent. Obviously those people, including the honourable gentleman, who in earlier days opted for a sense of gloom, despair and pessimism about the impact of devaluation on the price mechanism of this country have done Australia a very great disservice indeed.

I do not deny, of course, that the impact of devaluation will have its effect during subsequent quarters, but the honourable gentleman will be very much aware of the impact in the June quarter of the prices-wages pause which was supported by this Government and sabotaged by members of the Opposition. He also will be aware that it is impossible to quantify the extent to which a number of significant manufacturers have been able to hold prices in the postdevaluation stage, quite apart from the price pause, by increasing output and getting unit costs down. They have moved profit up without at the same time increasing their prices and therefore allowing that to flow into the price mechanism. As regards the future rate of inflation, this Government remains optimistic because of the coherence in application of the policies that have been put forward. The rate of inflation will continue to show abatement during the period ahead as a consequence of the continuation of the firmness of those policies.

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– I address my queston to the Minister for Primary Industry. Is it a fact that following a meeting of the Australian Agricultural Council some States are tackling at farm level the problem of infestation and damage to export wheat? Is it a fact that procedures and penalites are costly to administer and limited in their total effect? Will the Minister give consideration to the eventual elimination of weevil damage in silos by encouraging fumigation methods as currently recommended by the Commonwealth Scientific and Industrial Research Organisation? What are the problems involved in achieving this state of affairs?

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

– It is obviously imperative for a country such as Australia to maintain the very highest reputation in respect of all our exports. It is true in regard to grain exports that there have been some chemical residue difficulties which unfortunately are not completely capable of elimination at the moment. There has been discussion about this matter at meetings of the Australian Agricultural Council and between technicians and my officers and officers of State departments of agriculture. I think probably the best way to examine this matter further would be to ask the honourable gentleman and his committee to look at the problem as it exists between the States so that at a Federal level we might be able to ensure that there is some oversight of the proposition. We can then proceed within Agricultural Council and in consultation with other State departments of agriculture to see what other steps are necessary. In the meantime I assure all those who are interested as customers of Australian grains that every possible protective mechanism is being adopted and that we are selling only those grains which fully comply with specifications under contract.

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– I ask the Treasurer whether he is aware that at 2.15 p.m. on 4 November last year, before the Conciliation and Arbitration Commission at the national wage case arising out of the September quarter consumer price index, Mr Morling, Q.C., on behalf of the Australian Government, said:

Before the adjournment His Honour Justice Robinson asked me whether I could inform the Bench as to whether the Medibank components of the December consumer price index would be removed from calculations determining the tax indexation adjustment to take effect as from 1 July 1977. The answer is no to that question.

When did the Fraser Government change its mind on this question and break another promise? Was the Commission informed or has it yet been informed of this change of policy? If not, is it a fair assumption that wage and salary earners have been granted by the Commission less than would otherwise have been determined because of this deception?


– If there is any suggestion of deception in relation to taxation, I suggest the Opposition Party in this House has, in fact, a monopoly on the process of deception because, before it came to office, it promised tax reform. Yet in its first 2 years in office it raised receipts from personal income tax by an unprecedented 89 per cent and it imposed a massive increase of $602m in indirect taxes and levies, excluding the coal export levy, in its last Budget. Of course, the Labor Party claims some sense of concern for tax indexation. I gently remind the honourable gentleman and the country at large that the Labor Party refused to implement the recommendations of the Mathews committee which it had, in fact, set up. The Labor Party withdrew many of the concessional deductions previously available to taxpayers in important areas like education. It introduced a number of quite discriminatory forms of taxation. The recent decision by the Government is intended in no sense to mislead because, as a consequence of the philosophy we have always argued in relation to tax indexation, we have said deliberately that if a government seeks to change the rules, it should first do so by introducing a Bill.

Mr Hurford:

– Get to the point.


– I assure the honourable gentleman that he will not get his odds up to 12 to 1 because of these interjections.

Mr Hurford:

– Would you like a little wager?


– Do not ask -


-Order! The Minister will continue with the answer.


– I am sorry. I do not want to make life difficult for the honourable member. I hope he remains where he is. I would like to support him for the position of Deputy Leader of the Labor Party. Could I put my vote on the line? In relation to tax indexation, we introduced a Bill in the House and said exactly what that Bill was intended to do. There is no masquerade in relation to the Government’s intentions. If the honourable gentleman refers me to the ambit of the Conciliation and Arbitration Commission, I point out that the Bill follows the recognition of the Commission which suggested that it was pure economic sense and logic that devaluation should be a deductible item from wage indexation as, in fact, it ought to be from the process of tax indexation. Finally, against the background of what I have said to the House, was the absolute imposition of tax rip-offs by the former administration. The present Government makes no apology for what it has done about tax indexation. It takes credit for the fact that in the first year we have indexation to the extent of revenue forgone of $ 1 ,050m. In the year ahead I think the figure is around $825m, apart from the $ 1 billion which will go to providing incentives for the corporate sector. This is a record of which any government could be proud.

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– My question is addressed to the Minister for Post and Telecommunications and in some respects follows the question asked by the honourable member for Paterson. Has there been any increase in the volume of protest mail received by the Minister about some Australian Broadcasting Commission programs? Has the Minister had complaints about bias and filth on programs like Broadband and Coming Out, a radio program on Saturday afternoons which apparently is prepared especially for children, and also some television programs? Will the Minister give the House some indication of the volume of these complaints?

Mr Eric Robinson:

-I do get a considerable amount of mail expressing concern, disagreement or disapproval in relation to some ABC programs, either on television or on radio. Of course, there has always been a charge of bias on the ABC and it has not always come from one particular quarter. Every Minister who has had an overview of the ABC has had substantial mail in that regard. Is it of an increasing nature? Well, it is not of a decreasing nature. I do not bother to add up every week how many letters I get complaining about ABC programs; I have better things to do. Of course, the complaints have increasingly been about programs of a sexual nature, and that is a new element which certainly has increased. If the honourable member wishes to know, I will ascertain what is the number of complaints, with particular emphasis on the programs he mentiond

Finally, may I say to the House that the whole question of standards of broadcasting is something in which we all have to take a tremendous interest. That is one of the reasons why the new Australian Broadcasting Tribunal is now going around the community asking for community views. In the end, the broadcasting system ought to reflect the standards of the community, and that is what the Tribunal is attempting to discern. It will submit its report to me by about the middle of July, and the Government will then consider the report with a view to improving the standards, perhaps to some degree by selfdiscipline and self-regulation which should apply right across the broadcasting system, commercial and national. Whether the national network will come within the scope is a matter yet for deliberation and decision.

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– I address my question to the Minister representing the Minister for Administrative Services. Is he aware of reports that the Government is considering installing heart monitoring facilities to keep a constant check on the weight, blood pressure, pulse rate and cholesterol level of parliamentarians? If so, will the checks be compulsory and will the Minister say whether the use of taxpayers’ money for such purposes justifies public disclosure of the results so that constituents may be aware of the health of their elected representatives?


– I am not personally aware of the proposals outlined by the honourable gentleman. He certainly looks well able to cope with any monitoring arrangements which might be set up. I shall seek advice from my colleague the Minister for Administrative Services to see whether he has any plans in mind.

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-My question is directed to the Minister for Business and Consumer Affairs. Is it a fact that Ampol Petroleum has applied to the Prices Justification Tribual for an increase of 3.8c a gallon in the price of petrol? Is it a fact that the same company sells to cut price petrol jobbers in Victoria, particularly ACTU-Solo, at rates of up to 12c a gallon below the wholesale price, in competition with its own legitimate dealers? Is it a fact that dealers in New South Wales are contemplating aligning themselves with oil industry unions in an attempt to remove discriminatory pricing in the oil industry? Is the Minister able to advise the House when reforms will be introducted to overcome the archaic method of allocating quotas of local crude oil based on sales volume for an industry that reeks of difficulties, intrigue and deception?

Minister Assisting the Prime Minister · BENNELONG, NEW SOUTH WALES · LP

-I am aware that Ampol Petroleum has approached the Prices Justification Tribunal. I do not think I am in a position to offer a comment on the merit of that company’s application for a price increase. There may be matters relating to it to which the honourable gentleman has not referred and which therefore might cast a different light on it from that implied by him. But I can inform the honourable member that the general problem to which he referred in his question has been under very close consideration by the Government in recent times as a result of a submission I put to the Government. I expect that it will be possible for some indication to be given of the Government’s attitude very shortly.

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-I direct a question to the Minister for National Resources and Minister for Overseas Trade. Is the demand for oils and motor spirit by the transport industry in Australia elastic or inelastic? If the price of crude bil were to increase by 50 per cent, by what percentage would the demand for this energy form decrease? If the demand is inelastic, what steps does the Government propose to take to alleviate the impact of the increase on users of this energy form particularly in the field of transport, for whom there is no alternative form of energy?


– I think that it is an inelastic question, really. There is not much scope for the transport industries of Australia at the moment if we run out of portable fuel of which petroleum is by far the most important. A problem confronting many countries is how they might conserve their existing known reserves of oil. I think it is fair to say that if oil prices increase there is a tendency to conserve but in places such as Western Europe, where the price of petroleum has now increased to about $1.40 or $1.50 a gallon, the consumption of oil still seems to be at a very high level. The important thing to recognise is that if we have petrol prices or oil prices at artificially low levels this distorts the pattern of use of resources within a community. Only by keeping prices at the same relativity will we ensure that when people are making long term development plans they will use those forms of energy which will be the most reliable and the most economic over a long period.

The honourable member asked what were the Government’s plans relating to the pricing policy of crude oil. At the moment, consultations are due to start with the producers and the refiners. My Department will be in contact with these people today. As I announced last Friday, the Government has laid down the principles which it believes should apply to a domestic crude oil pricing arrangement. In the course of talking with these people, we shall try to work out what is the most efficient way of determining the exrefinery price for oil. In doing that, we shall be looking at the crude oil allocation scheme to see whether simplifications and improvements cannot be made.

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– Is the Minister for National Resources and the Minister for Overseas Trade aware that the European Economic Community has recently imposed a variable levy on buffalo meat in addition to the existing duty? This action threatens to stop our exports which, I understand, had been growing quite rapidly. Can the Minister say how much business is at stake and what action is being taken by the Government in an endeavour to offset this disadvantage?


– Recently, some changes were made to the import policy of the European Economic Community whereby it included buffalo meat in a new import arrangement for beef and veal. The impact of this was that buffalo meat, apart from attracting a 20 per cent duty, will attract also the variable levy that applies to beef. At the moment, that variable levy is running at approximately $2,000 a tonne. The levy and duty virtually will close off the European market for the sale of buffalo meat, in respect of which a very sizable industry has been built up in the Northern Territory. Something like $3m worth of buffalo meat was exported to West Germany last year. There have been abattoir improvements to conform with the hygiene and veterinary requirements of West Germany, but now all that will be of no avail if the European Economic Community maintains its very rigid policy on buffalo meat. Buffalo meat was always considered as game meat and did not incur the same penalties as beef and veal.

We are taking action at Brussels to protest against this policy. We hope that we can get buffalo meat reclassified as game meat so that the industry will not have to pay this very high levy. This is just another indication of the EEC’s agricultural policies having a very severe impact on Australian agricultural export industries. Since Britain joined the EEC in 1973, the performance of almost every item of agricultural export to the EEC, with the possible exception of wool, has declined very significantly. I hope that when the Prime Minister nas the opportunity to speak with leaders in Brussels and elsewhere in Europe, he will bring these points to the forefront and let them know that we do not appreciate our traditional trade being cut off by these measures.

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Mr E G Whitlam:

– I address a question to the Acting Prime Minister. He will have seen and probably heard in the media that Mr Lang Hancock has stated that he obtained a copy of the second Fox report before it was officially released last Wednesday afternoon. I ask: Which Ministers were given a copy or a summary of the report prior to its official publication? Has the leak of the report to Mr Hancock been investigated and, if so, what has that investigation shown? Finally, will the Acting Prime Minister table the telex message sent to him by Mr

Hancock, making representations on the findings of the second report?


-My Department has brought to my notice that there were some newspaper reports of Mr Lang Hancock having received an early copy of the second Fox report. After examination of the matter the Department has said that there is no relationship between the statements put out by Mr Hancock and the findings in the report. It is quite obvious that he did not have a copy of the report. Very high security was maintained on the printing of this publication. The only Ministers who I am aware obtained an early copy of the report were the Minister for Environment, Housing and Community Development, the Minister for Aboriginal Affairs, the Minister for the Northern Territory and myself. There may have been other early copies. I received my copy on the Sunday, about 3 days before the report was presented to this House. It is highly doubtful that Mr Lang Hancock had any evidence of the report. Certainly he will be getting no prior knowledge of what any Government decision will be.

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-I ask the Minister for Construction: Is he keeping a close watch on the vigour of the building and construction industries in Australia? What effect would the immediate provision of $800m of government money have on the future of these industries? Would such a stimulus provide for a further 50 000 jobs in these industries? Are growth and stability in the building industry helped by the artificial measures suggested at the weeked by nongovernment spokesmen? Finally, is the recent announcement by the Government that savings banks may now release a further $500m for home loans a far more significant and rational approach to the problems of home building and home ownership?

Minister Assisting the Minister for Defence · BOOTHBY, SOUTH AUSTRALIA · LP

– I do not remember all the questions in detail, but the quick answers are yes, no, no and yes. Honourable members are inviting me to stretch out my answer. I shall accept that invitation.

Mr Hurford:

– Have you been waiting for this one for a week?


-No, but I have been waiting for it for five or ten minutes. It intrigues me that the honourable member for Oxley- I imagine he is the honourable member whom the honourable member for Latrobe has in mind as putting out this sort of a suggestion- was part of a government which increased interest rates from around 6 per cent to over 10 per cent. It increased inflation from 4 per cent to about 18 per cent and, in the building industry, to over 20 per cent for a period. It created record unemployment and introduced that iniquitous system of tax rebates known as the Hayden rebate system. How that honourable gentleman can come out now and suggest this crazy solution as the panacea for the problems facing the building and construction industry, I frankly do not know. The prosperity of the country and certainly of this industry relies very much on the prosperity of the private sector of the industry and, in spite of the remarks of the honourable gentleman that sector is certainly improving considerably. I think the honourable gentleman himself nodded and acknowledged that fact.

Mr Hayden:

– Like hell I did.


– The honourable member says that he did not do so. Approvals- I admit that these are not commencements- in the nonresidential section of the building and construction industry show a steady improvement- a strong growth factor. This started when the present Government gained office and has continued to the present. Even more significant is the fact that the private sector is now dominant visavis the government sector. I think that is a reasonable answer to our critics. Our policies are certainly beginning to work. The Government’s goal is to defeat inflation and get the deficit down. With the reduction of the deficit there will be a reduction in interest rates and taxes. Interest rates and taxes will not be reduced by expanding the deficit, which would be the direct result of the implementation of the policies espoused by the honourable member for Oxley.

I have been subject to some unfriendly remarks in the media in recent times. I acknowledge that the rate of growth in the home building industry is not being sustained at the rate of growth of last year. My remarks concern the nonresidential part of the building industry. My colleague the Minister for Housing, Environment and Community Development is well equipped to handle any inquiry on the housing industry. At the same time, I draw the attention of the House to the fact that figures released this month for home building approvals in April were up, and I regard that as a good sign. It is no good honourable members opposite or the industry continually trying to blame the Federal Government for any diminution in any section of the home building industry. State governments, unions and the industry itself all have a part to play.

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– I ask the Treasurer a question which relates to a question he answered earlier in which he referred to certain costing which he alleges was carried out in relation to a Press statement I released yesterday. Does he recall that he mentioned to me that his costing showed a saving of $75m on unemployment benefits if 50 000 people were put into work for a year? Does he realise that that is an average of less than $30 per employee and that the standard rate of unemployment benefits at present exceeds $47 a week. More significantly, does the Treasurer realise that in the report of 31 July 1976- the report of the interdepartmental working party on Aboriginal employment- at paragraph, the departmental officials then worked on a national average unemployment benefit rate of $50 a week to carry out their costing? Does the Treasurer realise that there have been substantial increases in benefits since then? I remind him further in relation to his comments to me that the additional revenue generated by personal taxation through putting 50 000 people into work was $50m a year. I remind him that even on the most conservative breakup of the total amount of the program as between labour and other costs this would represent- it is a fairly cautious and generous statement in his direction- a tax payment of much less than 15 per cent of income. I ask the Treasurer Will he carry out his sums again and provide me with the detailed steps through which he has arrived at these conclusions because they certainly do not seem to be substantiated in fact?


-I have to say one thing to the honourable gentleman and that is that he never knows when to stay off the field because his Press release makes it perfectly clear that one does not, out of the air, instantaneously, suddenly produce 50 000 jobs. The honourable gentleman, in the Press release of 29 May issued from Kelvin Grove High School- I do not know what he was doing there at the time; perhaps he was holed up in some cabal organising matters- says:

There would be no inflationary impact from such a modest addition to public spending.

Of course the figure, by way of background, was $800m. The honourable member refers to that amount as modest. He goes on to say:

Allowing for second and third round multiplying effects in the economy, up to 50 000 jobs . . .

In other words, the honourable gentleman is making it perfectly clear that one does not suddenly generate 50 000 jobs as of now; that that would take time. He, of course, allows for the multiplier effect of the second and third round.

What I want to say in response to what the honourable gentleman has queried is that obviously the extent of additional personal income tax collections and savings in unemployment benefit would depend heavily on how many additional persons were placed in employment and how quickly this occurred. Of course this process would take months. The figures I have provided to the honourable gentleman have been checked carefully. But it is interesting to know that if one makes 3 charges in relation to what the honourable gentleman has said, he comes back with that particular element of the charge made by me as Treasurer which is the least costly in relation to sustaining the propositions that he has put forward. It is interesting to observe that the honourable gentleman now makes no reference to the question of the investment allowance because, apparently for the first time, he now recognises that that is retrospective and obviously cannot count at the present time. It is interesting also that the honourable gentleman makes no reference to the corporate tax side.

As for capacity to count and to make estimates, I should like to remind the honourable gentleman, only gently and in low profile, that after all, he talked about a Budget with a $2.8 billion deficit which, by the January following that Budget, was running at $4.7 billion. He talked about an increase in real gross non-farm product of 5 per cent; he laboured hard to produce an increase of only 1.1 per cent. The honourable gentleman talked about a money supply which would not be accommodating to inflation, yet within 6 months of his Budget that money supply, measured on the M3 base, was running at 20 per cent. Now I am happy to assist the honourable gentleman when he has a problem with arithmetic, but I suggest that if he looks in the mirror he might make himself painfully aware that his record in the past was not one for which anyone on this side of the House would want to stand.

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Minister for the Capital Territory · Chisholm · LP

– For the information of honourable members I present the Australia Council annual report 1975-76.

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Ministerial Statement

Minister for Aboriginal Affairs · Stirling · LP

– by leave-Honourable members will recall that on 9 November 1976 I tabled the report of the Committee of Inquiry into the Role of the National Aboriginal Consultative Committee. I wish to take the opportunity of publicly expressing my thanks, and the appreciation of the Government, to the members of the Committee of Inquiry, whose recommendations form the basis of the arrangements I am about to announce. Their report is a most significant document.

The Committee of Inquiry, comprising Dr L. R. Hiatt, Mr Jim Stanley, Ms Lois 0 ‘Donoghue and Mr Maurice Luther- the last 3 being Aboriginals- was appointed by the Government to review the work and effectiveness of the National Aboriginal Consultative Committee and to recommend changes in the composition, structure and function of the NACC or suggest other forms of Aboriginal body or bodies with the object of ensuring that Aboriginals can play a significant role at the national level in the following matters: Firstly, in setting long term goals and objectives which the Government should pursue and the programs it should adopt; secondly, in setting priorities for expenditure; and thirdly, in evaluating existing programs and formulating new ones. The Government believes that not only do Aboriginals have a significant role in these matters, but that they must also assume increasing responsibility for the success of the programs adopted. Only in this way will inefficiency, waste and disillusionment, which characterised many of the previous programs, be removed.

When this Government came into office it seemed that the NACC, established in 1973 by the former Labor Administration, had been neither an effective channel of communication between the Commonwealth Government and Aboriginal Australians nor an effective representative forum for their views. The Government therefore initiated immediately the inquiry foreshadowed in its electoral platform. That this concern was justified is clear from the findings of the Committee of Inquiry which concluded that the National Aboriginal Consultative Committee has not functioned as a consultative committee and, to that extent, has not been effective in providing advice to Government on policy and programs in Aboriginal Affairs’. The Committee attributed the absence of effective consultation ‘largely to the failure on the part of the previous Government to provide a clear statement of aims, duties and procedures prior to the elections, the disinclination of the elected members to accept a role that was merely consultative, and the state of mutual hostility that prevailed between the NACC and the Department of Aboriginal Affairs from the beginning’.

The Committee commented on the nature of the resolutions of the NACC which ‘were normally transmitted without any concern for priorities, rationalisation or feasibility’. It attributed the cause, in part, to the size and nature of the meetings of the NACC and the absence of consultation with the Department of Aboriginal Affairs. The Committee noted that the demands of the NACC ‘were often immoderate’ and assumed that these demands were made ‘in a context where those making the proposals shared no responsibility for their administration’.

The responsibility for the lack of effectiveness of the present NACC, therefore, lay both with Government and the NACC itself. The Government has now examined the report of the Committee of Inquiry and has taken account of comments on it including those provided by the NACC Executive. As a consequence we have decided to establish a group of inter-related Aboriginal bodies very much on the lines recommended by the majority of the Committee of Inquiry. There will be a National Aboriginal Conference composed of 35 members who will meet annually at national level. Members will also meet at least twice each year in their State or Territory as State or Territory branches of the National Aboriginal Conference and will choose their representatives on the 10 member NAC Executive. The role of the NAC will be to provide a forum in which Aboriginal views may be expressed at State and national level and in particular, to express Aboriginal views on the long term goals and objectives which the Government should pursue and the programs it should adopt in Aboriginal affairs, and on the need for new programs in Aboriginal affairs. The NAC will also participate, through its entitlement to choose 5 of the 10 members, in the work of a new body, the Council for Aboriginal Development.

The Council for Aboriginal Development will be the body from which the Government will seek formal advice. It will be composed of 10 members- 5 chosen by the NAC Executive from members of the Executive and 5 nominated by me as Minister for Aboriginal Affairs. All members will be of Aboriginal or Torres Strait Islander descent. The Government has noted the Committee of Inquiry’s remarks about the difficulties which arose from the failure of the previous Government to provide the NACC with a clear statement of aims, duties and procedures. It has, therefore, accepted the recommendation of the Committee that the new Conference should be provided with a charter which publicly sets out the structure and functions of the NAC and sets out the authority which the Minister for Aboriginal Affairs will have over its activities. The right of the Conference to fill half of the positions on the Council for Aboriginal Development will, as envisaged in the Hiatt report, balance the requirement that the Conference operates within the terms of the ministerial charter. I now seek leave to incorporate in Hansard the charter of the National Aboriginal Conference and a statement which sets out the role and functions of the Council for Aboriginal Development.


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

The documents read as follows-



This Charter sets out:

the structure and functions of the National Aboriginal Conference

the role and duties of NAC members

the relationship between the NAC and the Commonwealth.



The NAC will be composed of 35 members elected for three years in accordance with the provisions of Part D of this charter. The role of the National Aboriginal Conference will be to provide a forum in which Aboriginal views may be expressed at State and National level and, in particular, to express Aboriginal views on the long term goals and objectives which the Government should pursue and the programs it should adopt in Aboriginal Affairs, on the effectiveness of existing programs in Aboriginal affairs and on the need for new programs in Aboriginal affairs. The NAC will also participate, through its entitlement to choose S of the 10 members, in the work of the Council for Aboriginal Development (see Attachment).


The role of the NAC will be carried out

by the NAC as a whole in an annual meeting;

by State Branches in biannual meetings;

by the Executive, meeting biannually; in accordance with the provisions of the following paragraphs.

The Annual Meeting of the NAC

The Annual Meeting of the NAC will be held in a place determined by the NAC. The first annual meeting will be held in Canberra within 12 months after the first elections. The Chairman of the Executive, or in his absence the deputy Chairman of the Executive, will preside over the annual meeting. Rules of procedure for the meeting will be prepared by the Executive and submitted to the first annual meeting for approval.

The annual meeting will review the work of the Executive during the previous twelve months. It may recommend a reconsideration or rescission of previous decisions of the Executive. The Executive will be guided but not bound by these recommendations.

The annual meeting will receive and consider reports and recommendations from State Branches (through the Executive) and from the Executive. It may make recommendations to State Branches and the Executive.

The annual meeting may set up committees to consider, during the annual meeting, such matters as may be referred. It may request reports from the Executive or State Branches. It may, through the Minister for Aboriginal Affairs, request information from the Commonwealth Government.

State Branches of the NAC

Members of the NAC elected in a State or Territory will constitute a State Branch of the NAC except that Victorian and Tasmanian members will together constitute one Branch. Membership of State Branches will be:

Western Australia, 7; Queensland, 9; Northern Territory, 7; New South Wales, 7; South Australia, 3; Victoria/Tasmania, 2.

State Branches will meet at least twice each year, in a place of their own choosing within their State or Territory. They will elect their Chairman and Vice Chairman annually. In their absence an acting Chairman shall be elected by majority vote of those present. The Chairman will be responsible for preparing and circulating the agenda for meetings.

The functions of State Branches will be: to elect delegates to the Executive to propose matters for discussion and action at the national level to form and maintain working relationships with other Aboriginal organisations, with regional offices of the Department of Aboriginal Affairs and, through those offices with other Commonwealth and State Government departments in order to deal with matters related to Commonwealth programs arising at State level to consider reports from delegates to the National Executive to advise the Minister for Aboriginal Affairs on matters referred by him to the State Branch.

The Executive- Members of the Executive will be chosen by State Branches from among their members as follows:

Western Australia-2 members (1 of whom shall represent a tribal region)

Northern Territory-2 members

South Australia- I member

Queensland-2 members ( 1 of whom shall represent the Torres Strait area)

New South Wales- 2 members

Victoria/Tasmania- 1 member.

Members of a State Branch may also elect one of their members to act as a substitute in any instance where a delegate is unable to attend an Executive meeting or otherwise undertake his duties as an Executive member. Members of the Executive will hold office for three years. The Executive will elect its Chairman and Deputy Chairman annually. In their absence an acting Chairman shall be elected by majority vote of those present.

  1. The Executive will choose five of its members to be the NAC delegates to the Council for Aboriginal Development. At least two of the delegates will be representatives of tribal regions or of the Torres Strait area.

  2. The functions of the Executive will be: on the basis of recommendations of NAC meetings and meetings of State Branches, to brief delegates to the Council for Aboriginal Development to prepare for annual meetings of the NAC on the basis of recommendations of the Annual meetings and meetings of State Branches, to put the view and needs of the Aboriginal people before the Minister for Aboriginal Affairs and before groups and individuals having responsibilities for, or interests in, Aboriginal affairs to direct the activities of the NAC secretariat, including its financial management and employment of secretariat staff to prepare and distribute an NAC newsletter.

The Executive is obliged to consider recommendations from the NAC annual meeting and meetings of State Branches, but such recommendations are not binding on the Executive.


Membership of the NAC will be open to any Aboriginal over the age of 18 years who has been a permanent resident of the area in which he stands for election for a period of more than six months. The Minister for Aboriginal Affairs will be the sole authority on the number of members and the boundaries of the areas which members shall represent.

A member may cease to be a member of the National Aboriginal Conference before the expiration of the three year period of office by resignation or by declaration of the Minister for Aboriginal Affairs after consultation with the National Executive of the National Aboriginal Conference that the member is no longer fit to hold office on the grounds of conviction for a criminal offence, gross neglect of duties or of ill health.

Casual vacancies arising from action taken under paragraph 15 or from death of a member, will be filled by election or other means approved by the Minister after consultation with the relevant State Branch.

Since members of the NAC are regarded as accountable to Aboriginals, Aboriginal organisations and Aboriginal communities in their areas, it will be their duty to consult with and represent the views of Aboriginal organisations and communities in their areas at meetings of State Branches and of the NAC.

Members will be available to advise organisations and communities in formulating requests for assistance and will take part in consultations on aid programs at Community, Area and Regional level.

Members will continue to reside in their areas while they hold office as NAC members. They will receive remuneration at the rate determined by the Remuneration Tribunal on the basis of their full-time service as NAC members.


Elections for NAC members shall be conducted by the Australian Electoral Office in conjunction with the Department of Aboriginal Affairs. Rules for the conduct of these elections, and any amendments to these rules, will be subject to the approval of the Minister for Aboriginal Affairs, in consultation with the Minister for Administrative Services.

The definition of NAC areas for the purposes of conducting an election will be as approved by the Minister for Aboriginal Affairs and any amendments to area boundaries will also require the approval of the Minister.


Subject to budgetary requirements and within the context of overall Government policy, the Commonwealth Government will provide finance for the operation of the National Aboriginal Conference, including funds for the remuneration of NAC members as approved by the Remuneration Tribunal fares of members attending approved meetings the salaries and other entitlements of NAC members’ secretarial assistants as approved by the Public Service Board accommodation and assistance for the conduct of approved NAC meetings where these requirements cannot be met by the NAC secretariat the preparation and distribution of an NAC newsletter.

The administration of these monies, within the budget approved by the Minister, will be the responsibility of the National Executive of the National Aboriginal Conference, subject to the incorporation of the National Executive in a form acceptable to the Minister for Aboriginal Affairs and to arrangements for the accounting and audit of all funds provided by the Commonwealth in a manner acceptable to the Minister for Aboriginal Affairs.

In addition to providing funds for the purposes described above, the Government will provide office accommodation, furniture and equipment and telephone facilities for each N.A.C. member, for the N.A.C. secretariat and for the annual N.A.C. meeting and meetings of the Executive and State Branches of a standard approved by the Minister for Aboriginal Affairs.


In addition to the matters provided for in this charter the Minister for Aboriginal Affairs may refer any other matter to the N.A.C. Annual meeting, to the Executive or State Branches and such matters shall be discussed by the body referred to and a response provided.

Resolutions or requests affecting the responsibilities of Ministers other than the Minister for Aboriginal Affairs, will be referred by the latter to those Ministers, and the replies will be conveyed through the same channel.

The N.A.C. may seek assistance from the Minister for Aboriginal Affairs to fulfil its functions and particularly for training of members and for the provision of factual information to assist it in providing advice to the Minister.


This charter may be amended at any time by the Minister for Aboriginal Affairs after consultation with the National Aboriginal Conference.

Explanatory Note- Council for Aboriginal Development

The Council for Aboriginal Development will be the formal advisory body to the Minister for Aboriginal Affairs, and, through him, to other Ministers or Commonwealth authorities responsible for programs and policies having specific impact on the Aboriginal community in Australia. In particular, the Council will be a key body in achieving the Government’s objective in ensuring that Aboriginals take a major role, at national level, in advising on the long term goals which the Government should pursue and the programs it should adopt; setting priorities for expenditure; and evaluating existing programs and formulating new ones.

The Council for Aboriginal Development will consist of ten members of whom five will be N.A.C. members chosen by the National Executive from the members of the

Executive, and five will be nominees of the Minister for Aboriginal Affairs; all members will be of Aboriginal or Torres Strait Islander descent. At least two of the National Executive delegates will represent communities in traditionoriented areas.

1 . While there is no limit on the range of matters affecting Aboriginal Australians on which the Council may offer advice, it will be required to consult with specialist advisory bodies, such as the National Aboriginal Education Committee, with a view to avoiding duplicating the work of these bodies.


The Government sees the Council for Aboriginals as the formal Aboriginal advisory body to the Minister for Aboriginal Affairs and, through him, to other Ministers and Commonwealth authorities responsible for policies and programs bearing directly on Aboriginal Australians. It will be the duty of the Council to advise on: the long term goals and objectives which the Government should pursue and the programs it should adopt; priorities for expenditure on Aboriginal affairs within the context of overall budget allocations; the effectiveness of existing programs, and the need for new programs.

The Government seeks written advice from the Council. The Council may, through the Minister for Aboriginal Affairs, request information on Government policies and programs in the course of formulating their advice. In cases where he feels obliged to reject the Council’s advice, the Minister for Aboriginal Affairs will inform the Council in writing, giving his reasons.

While there is no limit on the range of matters affecting Aboriginal Australians on which the Council may offer advice, it will be required to consult with specialist advisory bodies, such as the National Aboriginal Education Committee, with a view to avoiding duplicating the work of those bodies.

The Council will have 10 members, 5 of whom will be chosen by the Executive of the National Aboriginal Conference from its own members and 5 will be nominated by the Minister for Aboriginal Affairs. The term of membership for all members will initially be 3 years except that any N.A.C. delegate who ceases to be a member of the N.A.C. for any reason will also thereby automatically cease to be a member of the Council. The 5 N.A.C. members of the Council will be guided, but not bound, by briefings issued by the N.A.C. Executive.

The Council will elect a chairman and deputy chairman who will hold office in that capacity for a period of one year but may be re-elected.

The rules of procedure for Council meetings, other than those specifically referred to in this letter, will be determined by the Council.

The Council will meet at least four times a year and further meetings may be approved by the Minister for Aboriginal Affairs. The chairman will prepare an agenda which should be circulated to all members before each meeting. The agenda will include items referred to the Council by the N.A.C. Executive and items referred by me as Minister for Aboriginal Affairs. Individual members of the Council may propose agenda items.

The Commonwealth Government will provide the staff, accommodation, furniture and office equipment necessary to operate a secretariat which will provide administrative support and a capacity to undertake research and prepare papers on issues which the Council decides to consider. The Council may also draw upon the resources of the Department of Aboriginal Affairs to assist with preparatory work for Council meetings and may request assistance from such Government bodies as the Australian Institute of Aboriginal Studies.

While they are attending approved meetings or travelling in connection with approved Council business, members of the Council will be entitled to receive sitting fees and travelling allowances at the rates and under the conditions approved by the Remuneration Tribunal from time to time, except that N.A.C. members of the Council, who receive an annual salary, will not also receive sitting fees.

The Council will be a key body in achieving the Government’s objective of ensuring that Aboriginals have a major role in advising on national policies, programs and priorities in Aboriginal affairs. Advice received from the Council will be given full consideration in considering Government actions in Aboriginal affairs and where the Council’s advice cannot be accepted I will provide the Council with written reasons for this decision.


– I now make some observations on the Government’s decisions.

National Aboriginal Conference-NAC

The NAC will meet annually at the national level and that meeting will draw together and express Aboriginal opinion on the basis of views put forward and considered at local and State levels. The belief that the National Aboriginal Consultative Committee was an ‘Aboriginal parliament’ contributed to its failure to provide constructive advice to the Government, and to its failure to attract widespread support among the Aboriginal and non-Aboriginal communities. It is not the Government’s intention to set up a quasi-parliamentary body outside the constitutional parliamentary system, and the National Aboriginal Conference will be a non-legislative forum in which elected members will be free to debate and express, among other things, an Australiawide Aboriginal view on long term goals which the Government should pursue, programs which it should adopt and priorities for expenditure.

Although the Committee of Inquiry recommended that the number of members be increased from 41 to 46 to give tribal people increased representation, the Government believes that a membership of 35 will provide a balance between tradition oriented, rural and urban Aboriginal and Torres Strait Islander communities. The 35 members will represent geographical areas which generally coincide with my Department’s administrative areas. This will enable each member to be closely involved when proposals affecting his area are being developed. It also will help to ensure that representatives are accountable to their communities and that the effectiveness of their work at grass roots level may be judged by those communities throughout the members’ term of office. The normal term of office for members will be 3 years. Members will receive a salary and allowances determined by the Remuneration Tribunal. The charter sets out certain conditions under which members may be removed from office.


All persons of Aboriginal and Torres Strait Islander descent- over the age of 18 years- in Australia will be entitled to nominate for membership of the 35-member National Aboriginal Conference and to participate, as voters or candidates, in the elections. In most areas, it is expected that voting will be by ballot paper, but in areas where the Aboriginal community prefers traditional methods of selection, the Minister for Aboriginal Affairs has authority to approve the use of such methods. There is precedent for using traditional methods of selection in the provisions in the Aboriginal Land Rights (Northern Territory) Act covering the choice of members of land councils in the Northern Territory. The Australian Electoral Office and the Department of Aboriginal Affairs will undertake the necessary arrangements for the elections. I expect to announce soon the procedures for enrolment and nomination and other related principles under which the first election will be conducted.

We believe that, with the extensive publicity which will precede the elections, the arrangements will be readily understood by those people wishing to participate. The publicity campaign will not only explain how the elections are to be undertaken but also inform voters as to the role of the National Aboriginal Conference and the Council for Aboriginal Development so that people will have clearer information than they had in 1973 about what they are voting for, why, and for whom. In accordance with the recommendations of the Committee of Inquiry the target date for the first election is November of this year- that is, before the northern wet season sets in. In the meantime, the Government has decided to extend the life of the present NACC until the date of the next elections.

State Branches of the NAC

There will be 6 branches of the NAC. This follows the recommendations of the Committee of Inquiry. Each State except Victoria and Tasmania will have one branch; the Northern Territory also will have a branch and Victoria and Tasmania, together will constitute the sixth branch. The branches will meet in their own

States, separately from the national body, at least twice each year. The functions of the State branches will be to elect delegates to the Executive; to propose matters for discussion and action at the national level; to form and maintain working relationships with other Aboriginal organisations, with regional offices of the Department of Aboriginal Affairs and, through those offices, with other Commonwealth and State government departments in order to deal with matters related to Commonwealth programs arising at the State level; to consider reports from delegates to the National Executive; and to advise the Minister for Aboriginal Affairs on matters referred by him to the State branch.

Executive of the NAC

The main functions of the National Executive will be to select and brief the delegates to the Council for Aboriginal Development- having regard to the recommendations of the annual conference and of State branch meetings- and to prepare for annual meetings of the NAC. Under the authority of the National Aboriginal Conference, the National Executive also will be able to put the views and needs of Aboriginal Australians to other influential bodies within the Australian community. I believe that the establishment of State branches and the National Executive will enable NAC annual meetings to be better prepared and organised. Appropriate training will be available for members on such subjects as meeting procedures, the preparation of letters and reports, and government and Public Service systems and procedures. The cooperation of my Department in this training can be assured.

Council for Aboriginal Development

The Council for Aboriginal Development will be the formal advisory body to the Minister for Aboriginal Affairs, and, through him, to other Ministers or Commonwealth authorities responsible for programs and policies having specific impact on the Aboriginal community in Australia. In particular, the Council will be a key body in achieving the Government’s objective, which I have earlier stated, of ensuring that Aboriginals take a major role, that the national level, in advising on the long term goals which the Government should pursue and the programs it should adopt; setting priorities for expenditure; and evaluating existing programs and formulating new ones. It will be expected to have a close relationship with specialist Aboriginal advisory bodies, such as the National Aboriginal Education Committee, but it will not duplicate their work. The Council will provide advice of a more general nature rather than undertake detailed consideration of specific programs.

The Committee of Inquiry saw the advisory body as developing into a statutory authority by 1 980. The Committee saw the statutory authority as having the legal right not only to advise on such matters as programs and priorities but also to determine such matters. The Government prefers to leave open for the present the question of a statutory commission but will review the position in the light of experience with the reconstituted National Aboriginal Conference and the newly created Council for Aboriginal Development after those bodies have been in existence for 12 months. In the meantime, the Government has made two other decisions which demonstrate the seriousness of its expectations of the Council. In any case where I as Minister feel obliged to reject the Council’s advice, I will give it my reasons in writing. Secondly, the Government will provide the Council with essential staff to enable it to examine adequately the issues referred to it and to administer its own affairs.

In its report the Committee of Inquiry drew attention to the difficulties experienced by tribal members at meetings of the NACC and made a number of recommendations intended to overcome these difficulties. The Government has accepted the Committee’s view by providing that at least four of the 10 member executive and two of the 5 executive delegates to the Council for Aboriginal Development will represent tribal regions or the Torres Strait area. Of the 35 members of the NAC, nineteeen will represent rural/traditional or traditional communities including the Torres Strait community.


The group of bodies whose membership and functions I have described is very similar to the group recommended by the Committee. Through these inter-related bodies the Minister for Aboriginal Affairs will have a number of avenues through which he will be able to seek the expression of views, or the provision of formal advice, which represents the genuine feeling of the Aboriginal community at each level. The aim has been to establish a means, which will have the confidence of both Aboriginals and the Government, of providing advice to the Government. The present NACC has not, for a number of reasons stated in the Committee of Inquiry report, achieved that aim.

The establishment of this new group of Aboriginal bodies, and especially of the Council for

Aboriginal Development may well mark a turning point in the development and administration of Aboriginal affairs policy in Australia. Some may try to portray the Department of Aboriginal Affairs as seeking to hold back the passing of responsibility and authority to Aboriginals in this way. This would be incorrect. I am satisfied that officers generally accept, indeed welcome, this new step forward. The decisions announced today mean that in the immediate future the Department will be co-operating in a situation where a separate, fully-Aboriginal, body has a right to put its advice direct to the Minister. This does not, however, amount to a proposal for phasing out the Department. The Minister will, because of his overall co-ordinating role in respect of Government policies and programs affecting Aboriginal Australians, require for the foreseeable future a body of experienced officers, Aboriginals and others, working within the Public Service structure.

Although the new arrangements for the National Aboriginal Conference and Council for Aboriginal Development will provide a more extensive Aboriginal involvement in determining policies and programs affecting all Aboriginals, the work of these bodies should be seen in the context of other formal and informal consultative arrangements such as the recently established National Aboriginal Education Committee. In addition, various arms of the Government will, from time to time, need to consult direct individual Aboriginal communities and organisations; we will seek to involve the National Aboriginal Conference in such consultations at the appropriate level but it must be recognised that this will not always be practicable. The decisions I have announced rank in importance with the Aboriginal Land Rights (Northern Territory) Act in giving effect to the Government’s Aboriginal Affairs policy. That policy states:

If a policy of self-management is to be effective, Aboriginals must play a leading role in their affairs.

Today’s decisions provide a means whereby Aboriginals will participate, by declaring their views and giving advice to the Government, in setting long term goals and objectives, and in setting priorities in expenditure. They will also contribute to the evaluation of existing programs and the formulation of new ones. The next major step is the assumption by Aboriginals of responsibility for the success of programs. This has already been taken at local level. The way is open through the bodies now to be established, for a similar step to be taken at the appropriate time at national level. I present the following paper

National Aboriginal Conference- Ministerial statement, 30 May 1977.

Motion (by Mr Sinclair) proposed:

That the House take note of the paper.

Mr Les Johnson:

-The Opposition would dearly like an extended opportunity to debate the pros and cons of the ministerial statement delivered by the Minister for Aboriginal Affairs (Mr Viner). One cannot help but feel that we are involved in a very hasty and inappropriate process about matters that will have a great bearing on the evolution and progress of Aboriginal administration and upliftment in this country. We can hardly be satisfied with the process that is available to us at the present time. The Minister has made a statement and at very short notice I am given an opportunity to speak for a limited period. In any event, the opportunities for consultation are extremely restricted.

One would have to join with the Minister in paying a tribute to the Hay Committee, and the assiduous way in which the Committee undertook its work. I had the opportunity of speaking informally with the Committee. I suppose my discussions could be regarded as evidence because I understood that the Committee’s work was not conducted in a formal way. I am pleased to note that many of the recommendations which I made have been given effect to. Indeed, those recommendations amounted to little more than a statement of the intentions of the previous Labor Government which, of course, was caught short in respect of its administrative programs, including its Aboriginal affairs programs.

Mr Ruddock:

– Very short.

Mr Les Johnson:

-Well, there is no need to quibble about it. When all is said and done, the term of the Labor administration represented the greatest period of progress in the field of Aboriginal affairs that this country has ever known.

Mr Haslem:

– A lot of people will disagree.

Mr Les Johnson:

-I would like to know who they are and whether they are speaking with any real knowledge and authority. I would very confidently assert that if they tend to disparage the statement that I have made they are not speaking for the Aboriginal people. Of course, the term of the Labor Government was a very significant period in the history of the Aboriginal people. Great initiatives were taken to give the momentum that was necessary to overcome 23 years of indifference and miserable neglect. That happens to be the fact of that situation.

One of the Labor Government’s cardinal objectives was to engage in consultation with the Aboriginal people. So much of what the Minister said today is about that innovation, that new creation if you like, in respect of Aboriginal affairs which can be attributed to the prowess of the Labor Government. The statement is about the National Aboriginal Consultative Committee as it was first called. This process was instituted by the Labor Government to at last facilitate the hearing of the voice of Aboriginal people. That in itself represents a very great and significant development. Bearing in mind this high principle, it is extremely regrettable that this statement has been made by the Minister- doubtless the Minister’s proposals will go on to some stages of implementation- without those consultative processes being effectively pursued.

Mr Viner:

– No.

Mr Les Johnson:

-Well, the Minister is looking intrigued about what I am saying. Just let me put it to him that we have in this Parliament the House of Representatives Standing Committee on Aboriginal Affairs. I for one would not regard this Committee as an inappropriate body to be given the opportunity to look at this matter. I know that the Chairman of the Committee, the honourable member for Parramatta (Mr Ruddock) who is sitting opposite me at the moment, does not want to disparage or downgrade the role of the Committee. The Committee is made up of honourable members who give up their time and almost all of the parliamentary recesses to study Aboriginal affairs. These honourable members would not want the Committee to be relegated to some rubber stamp or other innocuous role.

The proposals contained in the statement are supposed to be the most important developments in Aboriginal affairs. I am surprised by the Government’s attitude because I regard the Minister as being reasonably democratic in most things. However, he has not applied such a democratic process in respect of this matter. I am not even certain- the Minister has not made the position clear- whether in fact the National Aboriginal Consultative Committee, or congress or conference, which I think we are calling it now, has been informed either about the intentions of the Government in this respect. It is apparent that a great deal could have been done. For example, my last comment reminds me of the need to make this point: It is proposed that we are now to have a body known as the

National Aboriginal Conference. I have heard of the National Aboriginal Consultative Committee. That was the name given to the body by the honourable member for Wills (Mr Bryant) when he was Minister for Aboriginal Affairs. I know the Aboriginal people were anxious to have the body renamed as the National Aboriginal Congress. The Minister for Aboriginal Affairs (Mr Viner) would be aware of the fact that I was prepared to co-operate with the Aboriginal people in this respect. But now we have this new title. From what great heights has that been dropped? Whose creation is this? The decision is flying in the face of a very strongly held view on the part of the National Aboriginal Consultative Committee, 41 elected representatives of which have decided that they want their organisation to be known as the National Aboriginal Congress. The first matter to which we come in the Minister’s statement shows defiance of that voice.

From time to time we have heard the Minister express concern about tendencies to paternalism. But to what else can this situation be attributed but paternalism when we see a completely new name pulled out of the hat? All honourable members will be interested to know of the intention to establish a Council for Aboriginal Development. Its real role and the extent of its prerogative need to be spelt out. To what extent is it likely to represent a mere Uncle Tom approach? Will it, in fact, be allocated a proper prerogative in these affairs? It is one thing to send along preliminary estimates and get some views but it is another thing, of course, to enable these people, either in the early or at some subsequent stage, to have an effective say which represents a degree of self-government.

In many respects the recommendations of the Hiatt Committee are being followed in terms of what the Minister has put to the Parliament today. But also there are significant departures. Before I mention some of those significant departures I say that although we have had this matter presented before the Parliament rises, there is inadequate opportunity to engage in proper consultations or debate. We ought to have some explanation as to why it has taken so long from the time the report was communicated to the Minister for the matter to be brought before Parliament. I understand that the report was presented to the Minister on 4 November last year. It was actually tabled in the Parliament on 9 November. So the best part of 7 months has elapsed. I do not know whether the Minister can justify the passage of that time. At least there has been long delay.

It is not without some pleasure that I note that the concept of a national Aboriginal body, call it what we will- consultative committee, corporation or conference- is to be carried on. This, of course, was a very significant Australian Labor Party initiative. In many ways I regard the announcement today as an evolution on Aboriginal affairs emanating from those years of inactivity, from the realisation by the Aboriginal people that they were entitled to a better deal, and from the fact that they started to demonstrate that they wanted to have a say in the administration of Aboriginal affairs and in the formulation of policy. I regret that the Hiatt Committee and the Minister in his speech today have engaged in pedantic pinpricking. The fact is that it was the Labor Government which harboured and supported the emerging Aboriginal voice. It was not only the Labor Government but also the Labor zealots going back to the mid-1950s who encouraged the Federal Council for the Advancement of Aborigines and Torres Strait Islanders to gather together with people like Faith Bandler and Joe McGinnis. I was returning officer at those Easter conferences year in and year out. I must confess that I did not have the pleasure of seeing members of the Liberal Party or of the National Country Party of Australia at those conferences. But there were always people like Mr Bryant, Senator Keeffe and many other Labor men at those conferences.

It was the Labor movement which made available its office resources in the Parliament to give great backing and strength to the 1967 referendum campaign which resulted in 9 1 per cent of the people indicating their desire to see the Commonwealth Parliament equipped with powers to deal with Aboriginal questions. It was the Labor Government in 1972 which established the first ministry for Aboriginal Affairs. It was soon after the appointment of Mr Bryant as Minister for Aboriginal Affairs- a ministry with an exclusive prerogative and which was a significant development, as the Minister readily acknowledges- he invited 80 representatives of the Aboriginal people to come to Canberra under the chairmanship of Mr Joe McGinnis who had been the leader of the Federal Council for the Advancement of Aborigines and Torres Strait Islanders.

So the National Aboriginal Consultative Council was born, but not without some troubles. Some say it was stillborn and some say it had great birth pangs. It was certainly an emotional occasion, strongly felt and held by the Aboriginal people. I had the pleasure of being at some of those social engagements associated with that occasion. It does not have a charter paternally imposed on it by the Australian Labor Party Government. There has been great controversy over its constitution. Many comments have been made even in the Hiatt report about the matters pertaining to the endeavour to equip the NACC with an appropriate charter. I refer to paragraph 52 which concerns the short period when I was Minister for Aboriginal Affairs. It states:

The new Minister for Aboriginal Affairs, Mr Les Johnson, took the view that there was no need for the constitution to go before Cabinet. He would accept responsibility as a ministerial prerogative.

That is not my constitution to which I am referring; it is the constitution as proposed by the NACC. The report goes on:

As far as he was concerned, it was up to the NACC to determine its own constitution and, for that matter, its own name. The Minister stated his preference for the original name, and he stressed that he would continue to regard the body as an advisory committee, with the implication that applications for funds to support activities outside that definition might not be warmly received.

Mr Johnson noted the NACC’s plan to seek incorporation as an Administrative Association within the A.C.T. and expressed his approval. He assured the meeting that he regarded the provision of funds for an NACC secretariat as a matter of priority.

A solicitor, Mr Evans, was appointed by the NACC. The report indicates that ‘he held discussions with Mr Johnson’. The report states:

  1. . that Mr Les Johnson was prepared to seek the Prime Minister’s endorsement for a change in the name from Consultative Committee’ to ‘Congress ‘.

That was to give effect to the will of the Aboriginal people. The report continues:

Mr Evans expressed his strong agreement with the Minister’s view that the constitution need not go to Cabinet.

Paragraph 55 states:

The matter of the constitution (or constitutions) appeared at last to be at an end.

Later, in paragraph 56, the report states:

On 1 5 October the Attorney-General approved incorporation of the Administrative Association, and on 26 November 1975 the Deputy Registrar of Companies in the A.C.T. issued a certificate of incorporation for the NAC Administrative Association Incorporated.

Now we have gone through this process. It is true that it was painful and frustrating at times. What has happened now is that the Minister has torn up the constitution as prepared by the Aboriginal people and instead we have this new charter. There are many matters of great concern which one would dearly like to have time to talk about today. Many of my colleagues would like to do so. I ask the Minister whether he will give consideration to extending the time of this debate.

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

Debate (on motion by Mr Ruddock) adjourned.

page 2113


The following Bills were returned from the Senate without amendment or requests:

Appropriation Bill ( No. 3 ) 1 976-77.

Appropriation Bill (No. 4) 1976-77.

page 2113



-The Senate transmits to the House of Representatives the following resolution which was agreed to by the Senate and requests the concurrence of the House of Representatives therein:

That during the remainder of the present period of sittings the Joint Committee on Foreign Affairs and Defence and its sub-committees be granted leave to meet during sittings of either House of the Parliament.

Motion ( by Mr Killen) agreed to:

That the message be taken into consideration forthwith.

Motion (by Mr Killen) agreed to:

That the House concurs in the resolution transmitted in Message No. 20 of the Senate relating to the granting of leave to the Joint Committee on Foreign Affairs and Defence and its sub-committees to meet for the remainder of the present period of sittings during sittings of either House of the Parliament.

page 2113



Motion (by Mr Killen) proposed:

That the Publications Committee, or any subcommittee thereof, when conferring with a similar committee or sub-committee of the Senate, have power to move from place to place.

That the foregoing resolution be communicated to the Senate by message.


-As Chairman of the Joint Committee on Publications, I wish to make a short explanation in relation to this motion. In 1970 amendments were made to House of Representatives standing order 28 and Senate standing order 36 which gave the Joint Committee on Publications quite broad powers to inquire. However, the Committee does not have the power of most other parliamentary committees to travel and move from place to place. Currently the Publications Committee is carrying out what I consider to be a very important inquiry into the operations of the Australian Government Publishing Service. The Service, together with the Government Printer, has a turnover in excess of $25m annually and a staff of over one thousand. The reason for the request is to allow the Committee to move in the first instance to Sydney and Melbourne to inquire into and inspect the book shops and other operations associated with the Publishing Service in those 2 centres. A minimal cost will be involved to take a few staff members and Hansard with the Committee. As Chairman of the Committee, I intend to have the matter referred to the Standing Orders Committee so that in future it will not be necessary to make this request to the House.

Question resolved in the affirmative.

page 2114

SUPPLY BILL (No. 1) 1977-78

Second Reading

Debate resumed from 26 May, on motion by Mr Eric Robinson:

That the Bill be now read a second time.

Upon which Mr Hurford had moved by way of an amendment:

That all words after ‘That’ be omitted with a view to substituting the following words: ‘whilst not declining to give the Bill a second reading, the House, noting the failure of the Government’s economic strategy, condemns its rigid resistance to feasible and constructive alternatives such as cutting indirect taxes and initiating selective stimulatory spending’.


– It is a great honour to speak for the Government on the Supply Bill. In passing, I should like to comment on the speech made on Friday of last week by the honourable member for Adelaide (Mr Hurford), who referred in depth and at length to the economic ills of the country and how the Opposition would remedy them. I wish to say 3 things about that speech. Firstly, at this stage this Government has the deficit completely in line with its Budget forecast and it appears that the Government will achieve that objective at the end of this financial year. Secondly, the growth in the money supply is completely in line with the Government’s propositions and proposals. Thirdly, inflation is quickly approaching single digit figures, which is our policy objective. I say those 3 things in introducing my speech simply because I do not think it takes half an hour to summarise what the Government has done since it got back into power. It has got this country back on to the right economic track and it is now a government which can undertake to do things in the economy and see them through.

Today I should like to take the opportunity to talk about one of the smallest areas and smallest territories of Australia. I wish to speak about the amounts of money that are being provided for the small territory of Norfolk Island. Norfolk Island was discovered in 1774 by Captain James Cook. It is a small island, 5 miles by 3 miles, a thousand miles from Sydney and 660 miles from Auckland. It has an area of only 3455 hectares. Why should I take up the time of the national Parliament in the debate on the Supply Bill to speak of such a small island? My reason stems from the report of the Royal Commission into Matters Relating to Norfolk Island, which was presented to this Parliament last year. Norfolk Island is an area which over many years has been under a number of controls. It was first settled in 1788 at the same time as Sydney Town. When the First Fleet came to Australia, two of the ships moved on to Norfolk Island to establish a convict settlement. That first convict settlement was established in 1788 and continued until 1814, when it was abandoned. In 1 825 another convict settlement was established on Norfolk Island, and those who have read Australian history will realise that it was one of the most bloody and terrible episodes in Australian history. That colonisation of the Island as a convict community lasted until 1855.

The third period of settlement on Norfolk Island commenced in 1856 with a group of people from Pitcairn Island. Those people came from the mutiny on the Bounty, which of course is very famous in Australian history. The small group of people who had settled on Pitcairn Island were resettled on Norfolk Island to make a life for themselves and were the main people on the Island until the 1950s and 1960s. In the 1960s tourism became a popular interest on the Island and, in addition, some of the smarter company and taxation lawyers in Australia found that it was a wonderful tax haven. The Island blossomed. The life of the Pitcairners was disturbed by people coming in from outside to use loopholes m the Government’s taxation system, and also to spend some happy tourist hours on the Island. All this came about as a result of the building of an airstrip on the Island during the Second World War. The tax haven has now been closed down in the main, and the future of the Island- seems to be in tourism. Its population today is made up mostly of descendants of the Pitcairners. Approximately 40 per cent of the people living there can trace their history back to the Pitcairners. Another 25 per cent came from Australia, 25 per cent from New Zealand, and the balance from the United Kingdom and some other countries.

It is a very interesting island, and I speak of it having been there 2 weeks ago to spend a week of quietness and peace away from Australia in one of the most interesting places to which I have ever been. My reason for going was that one of the recommendations in the Nimmo report suggests that the Island could become part of the electorate of Canberra. To most of us living in Canberra it seems to be a remarkable suggestion that approximately 2000 people living 1000 miles away should be represented by somebody living in the national capital. The Nimmo Royal Commission report contains 74 recommendations. That the Island should become part of the electorate of Canberra is but one of those recommendations. The other important recommendation so far as the Islanders are concerned, I believe, is that the Island should have much more independence and that it should have a greater say in its own destiny. The Royal Commission report ranges over such diverse things as the development of the Island’s economy, whether cows and horses should be able to continue to roam across it, whether duty free status should be continued, whether there should be a law library on the Island; matrimonial causes, legal aid, a prison and law enforcement, racial discrimination, unionism and social services. It is a very diverse report and its presentation has led the Government to send over to Norfolk Island the Minister for Administrative Service (Senator Withers) and the Attorney-General (Mr Ellicott) next week to consult the Islanders to ensure that all their views on the report and their future will be taken into account.

The interesting point for the people of Australia who may not have been to the Island and who take an interest in it would be just how much the Territory costs us- the taxpayers of Australia- to run. The Territory does not pay tax. I suppose that those of us who pay tax would regard the Island as an absolute paradise. It may be difficult to imagine that 1000 miles away in the middle of the Pacific Ocean there is a territory where the fortunate people do not have to pay tax. A great controversy is raging on the Island and amongst most people as to whether the Island pays for itself or whether the Australian taxpayers subsidise it. The Nimmo Royal Commission report does not go into that matter perhaps quite as deeply as it could. The report contains a suggestion that the administration of the Island costs the Australian taxpayers about $2.5m per annum. The Royal Commission states that as a matter of fact on page 42 of the report and does not go much further. It is very difficult to get any precise figures to show from where that calculation came. If one speaks to the people on the Island, they will suggest it was a figure plucked out of the air.

A reading of the newspapers of the Island seems to indicate that the most important thing for the Islanders is the rights to land. There is a school of thought on the Island which suggests that the Pitcairners were bought from Pitcairn Island to Norfolk Island by invitation and by persuasion. They were promised that the Island would be theirs subject to some small areas which would be retained for the Crown. Legal arguments, legalese, historical research and the like have been brought before the people of Australia and before the people of the Island. Everybody has enough historical evidence to back up the points he wants to make. But is that really the issue? Is not the moral issue what the Islanders believe? If the Islanders believed back in 1856 that they were being invited to leave their home, which was undoubtedly theirs, to go to another place, and if a junior officer in the British navy told them this was so, is there not a moral duty on the Government today perhaps to take note of the expectation of the people rather than what the legal circumstances are? It is a question which I put and which I do not wish to answer.

What would a decision to make Norfolk Island part of Australia mean for the people of Norfolk Island? Firstly, it would mean that they may or may not have to pay Australian rates of taxes. Secondly, it would mean that they may or may not be brought under the social security umbrella of Australia. But I think there is little doubt that the cost structure of the Island would be inflated. When you go to Norfolk Island, you visit an area which is probably 1 5 or 20 years behind the rest of Australia in terms of its costs. All of those people who are struggling with unemployment, cost-price squeezes, existing and trying to make industry work, would know exactly what that meant. But the Island can hold out to its tourists- tourism is really its only industry- a relatively cheap holiday. The expense in getting there is high. Once the tourist is there, the holiday is reasonably cheap. Of course, that is an attraction. Once the tourist gets to the Island, whether it be to see history or just to buy tax free goods, he can spend some time there without being ripped off which, of course, is not the case in so many other tourist resorts both in Australia and overseas.

Another thing that would happen if the Island came into the Australian political spectrum would be that a divisiveness would be introduced to it. We all know in Australia that the need for politics seems to create divisions amongst people. It creates divisions in this House, it creates divisions within families and it creates divisions within communities. The Islanders are very fearful that if they become part of Australia they will suddenly find politics on the Island for the first time. They are fearful that families will argue amongst themselves and that the community will argue within itself about whether they should be voting for the Liberal Party, the Australian Labor Party, the National Country Party or perhaps even for Don’s party. Is that a good thing? I think that probably it is not. I think that a small community of 2000 people should be spared some of the things that go on in Australia. I think that perhaps industry on the Island should be encouraged and that tourism is the only industry that can survive there. Perhaps everything that this Government does in considering the fate of the Island must be geared around ensuring, firstly, that the essential, very important and unique situation on the Island, from the ethnic origin of the Pitcairners to their fundamental religious understandings, simplicity, generosity and trusting nature should not be disturbed.

One point that is very important to the Island -it comes out very strongly in the Nimmo report -is self-government. It is quite amazing to go to the Island and to realise that it really is a colonial outpost. The Island has a council which has an advisory capacity but no real power. The Island is administered by an Administrator appointed by the Australian Government. That Administrator takes his orders predominantly from Canberra. The questions of self-government, selfdetermination and representation are bound up together. But I feel no matter what happens in relation to the Island’s becoming part of Australia, in relation to paying taxes and the other recommendations, there is a compelling argument to give the people of the Island the right to administer their own affairs and to settle their own arguments themselves. I am sure they could do so and I am sure that they would do so very well. I am sure in my own mind that the recommendations of the Nimmo report on that subject do not go far enough.

The report makes very clear what the Royal Commission feels on the question of the administration of the Island. This is stated on page 77 of the report:

The main blame for the Island’s problems does not rest in the Island. Most of the long-standing ones have had their genesis and perpetuation in slothful and inept mainland administration, which has proved itself unable to activate the seemingly clogged processes of government and to achieve successful solutions to the Island ‘s obvious difficulties.

That is a fairly hard thing for the honourable member for Canberra who represents a bureaucracy to say. But the report contains that comment and I think that that in itself suggests that the Islanders could be no worse off by having administration passed over to them. But perhaps they are not ready for it. Perhaps they are behind Australia and behind advanced society, and we should look after them a little longer. I remind this House that, at a time when this country is still trying to determine what its national anthem will be, Norfolk Island has had a national anthem for more than 100 years.

I would like to comment upon a finding of Governor Denison in 1857 in connection with the Island and the people who are on it. He stated, in regard to the setting up of their legal framework:

I left untouched the rule which gave the women, as well as the men, a vote in the annual election of the Chief Magistrate.

That was in 1857; so perhaps we should allow the Islanders the right to run their own affairs because, obviously, any island which in 1857 allowed women to vote must be a fair way forward in development. The community itself is well organised. The community looks after its own people when there are problems. It takes people under its wing and helps them. The people have their own social security system. They have no unemployment. There is a lovely sense of lack of criminality; one can leave car doors open, with the keys in the lock.

That brings me to the final point- the crunch for a member of parliament- namely, the recommendation that this lovely island become part of the electorate of Canberra. Speaking selfishly on my own behalf and perhaps on behalf of the 2 senators for the Australian Capital Territory, let me say that we would like the opportunity to go occasionally to Norfolk Island to represent the people, and I am sure we would do it very well. It would be lovely to leave Canberra, which is such a new city, to visit such an old historical area which has its roots back in the first years of the colonisation of this country. That is the selfish view. The other side is that we would be taking part in a program or decision which might spoil something which is unique and I do not think I would like to be part of that. I could assure the Islanders, of course, that if they had me as their local representative they could have no one better, but I feel that they would be better left outside the Australian political scene. It should not be beyond the ingenuity of this Government and the bureacracy which supports it to find a mechanism by which the people of Norfolk Island can have more democracy and more say in their own affairs and not be made part of Australia.

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

-Midway through its term of office- midway through the 3-year term which the Prime Minister (Mr Malcolm Fraser), denied to his opponents but arrogantly claims for himself- we can look back on the wreckage and betrayal of 1 8 months of Fraser government. On every issue, in every significant area of policy, the Government has failed. Its anti-inflationary strategy collapsed with the devaluation last November. Its so-called new federalism- the return to pre-war doctrines of interstate rivalry and division- collapsed with the Premiers Conference in April. Its mythical wages and prices freeze collapsed with the Conciliation and Arbitration Commission’s judgment 6 days ago- a judgment which exposed the folly and failure of the Government’s whole economic strategy. Its illegal reprisals against school leavers were exposed by the High Court’s judgment in the case of Karen Green. The futility and arrogance of its industrial relations policy were exposed by the air controllers strike. Its ugly vendetta against the Australian Broadcasting Commission faltered in December with the resignation of Sir Henry Bland. Its blinkered and discredited foreign policy collapsed last week with President Carter’s speech at Notre Dame. The festering divisions in the coalition parties were exposed by the referendums. Throughout all this the economy has got worse. Unemployment has risen to its highest level since the Great Depression, living standards have fallen and the recession has continued. One failure has trodden on the heels of another. One after another, popular and creative programs have been destroyed. One after another, election promises have fluttered to the ground like withered leaves.

With the collapse of the wage-price freeze the Government is once again without a credible economic policy. With its formal and enforced admission that the freeze is over, the Government has acknowledged the failure of one more bungled episode in its disastrous record of economic management. What next can we expect from this Government? One more economic strategy is in ruins; one more Liberal confidence trick has blown up in its face. First, we were promised an investment-led, then a consumerled recovery; those strategies were abandoned. We were promised an export-led recovery; we are still waiting for it. The Government is back where it was after the devaluation- floundering without a policy, refusing to admit that its past policies have failed, and unable to state what its future policies will be.

In typical fashion the Government has blamed everyone but itself for the disintegration of its policies. The Prime Minister has blamed the President of the Australian Council of Trade Unions, Mr Hawke; he has blamed the Premier of South Australia, Mr Dunstan. The action of the Premier has been absolutely vindicated by the judgment of the Conciliation and Arbitration Commission. It was the Commission that pricked the bubble. Mr Dunstan did not kill the freeze.

Mr Hawke did not kill the freeze. The Commission did not kill the freeze; the Commission merely pronounced its obituary. It revealed what everyone had known or suspected- that the freeze was phoney, that the emperor had no clothes.

Its judgment last Tuesday identified the basic flaw and central deception in the Government’s tactics. It pointed out that employees could not accept- any more than the Commission could impose- a compulsory freeze on wages while the freeze on prices was partial, voluntary and uncertain. It proclaimed the obvious fact, namely, that, despite the repeated protestations and specious assurances of the Fraser Government, no genuine price freeze was in operation and no genuine recovery was in sight. Not for the first time, the incompetence and dishonesty of the Fraser Government have been exposed by the calm, dispassionate reasoning of the Conciliation and Arbitration Commission. The body best equipped and specifically empowered to hear the arguments and to weigh the evidence on the state of the economy gave a harsh and unambiguous verdict on the Fraser Government. It declared that the freeze was not working; it declared that the economy is not recovering. On the economy as a whole, the Commission’s judgment was brief and scathing. It said:

The reviews of the economy presented to us on this occasion differed little from those given at the last National Wage case. The general outlook continues to cause concern with no clear signs of economic recovery in sight.

There is the answer to the bleatings of the Prime Minister and the blundering of the Treasurer (Mr Lynch). Against that terse, expert and incontrovertible statement we can measure the sincerity of the Government and the success of its economic management. The day after the Commission’s judgment the Treasurer was still trying to convince us that recovery was underway. The Commission has refuted him. Its judgment stated that on the prospects of economic recovery all the parties and interveners in the latest national wage case were ‘largely on common ground’. In other words, everyone agreed- even the Government’s own counsel in the national wage case agreed- that no evidence of recovery was in sight. The public would be better informed if the Government were as honest with the people and the Parliament as it was, apparently, in its evidence to the Commission.

What did the Commission have to say on the freeze itself? Its judgment was no less trenchant and pointed:

From all that has been put to us on the price freeze, we have concluded that the concept and its future ramifications have not been adequately defined, that many prices are not frozen and others may not remain frozen whatever we decide, that the surveillance of their continued application is limited and that the overall contribution of a three-month wage-price pause under these conditions is indeterminate. In other words, we are being asked to impose a compulsory wage pause against several uncertainties of a voluntary price pause … In view of our decision to conduct a review of wage fixing priniciple, we do not believe that we should have the distraction of an uncertain wage-price pause hanging over those proceedings.

Who is to blame for all this uncertainty, for the vagueness, the confusion, the widespread defiance of the prices freeze and the absence of proper surveillance? The Government is to blame. From the beginning it had every opportunity to make a voluntary freeze succeed. It had the agreement of the Premiers, including the Labor Premiers. It had a remarkable, though largely undeserved, fund of public goodwill. The original agreement of the 7 heads of government on 13 April was based on consensus- voluntary action to restrain inflation. But it quickly became clear, before any consensus could be reached or even attempted, that the Fraser Government was going to rush to the Arbitration Commission and seek a compulsory deferment of the forthcoming wage case. At the hearing on 19 April the State governments, the unions and the employers, still anxious to explore the prospects of a voluntary agreement, agreed to take part in a national conference. That proposal came from the President of the ACTU. It was readily endorsed and supportedindeed commended- by the Commission. ‘Commended’ was the Commission’s word. It was turned down flat by the Fraser Government. Had the Prime Minister done what everyone else wanted at the time, had he agreed to a national conference of interested parties, had he accepted the advice and ready cooperation of the Commission itself, some workable consensus on wage and prices policy might have emerged. Instead, right up to last Tuesday the Government was maintaining the fiction that a price freeze was working. It knew it was not, and the Arbitartion Commission has exposed the Frazer Government’s deception.

The Government’s whole approach to a prices and wages freeze was an attempt to stand over the Arbitration Commission. It was not just trying to hoodwink the unions; it was trying to browbeat the Commission. It was putting quite improper pressure on the Commission to disregard its statutory obligations. The members of the Commission are not empowered to enforce a pay freeze merely on the say-so of the Government. Their statutory duty is to try to settle industrial disputes. Twice in its judgment last Tuesday the Commission felt obliged to remind the

Government of its statutory functions and obligations. The House should note its words:

  1. . given our statutory function, before we should give support to the concept (of a wage-price pause) by refusing increases in our awards to complement a price pause which is outside our control, the terms of the latter would need more careful definition and be subject to a more comprehensive system of price surveillance or control to ensure its observance.

Here was a pointed reminder for the Government that the Commission cannot breach its statutory obligation by endorsing or imposing a freeze that is inherently unworkable and unfair. The Commission went further. It warned the Government that to apply a compulsory wage pause in the circumstances sought by the Government would ‘constitute an unwarranted departure from our indexation principles and, indeed, a denial of our statutory responsibilities’. Has any statutory commission protested in such blunt terms against an encroachment on its independence? Here we have the Conciliation and Arbitration Commission- the ‘highest industrial tribunal in the land’, to use the Prime Minister’s words- accusing the Government of interference with its statutory duties. I will be noted how often the Commission uses the word ‘statutory’. There has never been a worse example of Government intimidation of the judicial or the arbitration system.

The Government’s tactics were the tactics of confrontation. They were the methods used in the air controllers’ strike. I make no judgment on the merits of that dispute, nor do I endorse the actions of the men concerned. But let there be no doubt about the Government’s intentions. The Government and the Prime Minister inflamed and prolonged a dispute that had already wrought a heavy toll on the community in lost time, lost revenue and untold hardship and inconvenience. The air controllers’ dispute demolished the Liberals’ treasured myths about strikes and industrial agitators. This was no strike by a communist union, led by rabid left-wingers. It was a strike by highly-paid, highly-skilled white-collar employees, not affiliated to the ACTU and not, in general, supporting the Labor Party. The Prime Minister can no longer pretend that industrial disruption is exclusively the work of radicals or revolutionaries. He can no longer pretend that secret ballots are the key to industrial peace. The air controllers’ strike began, continued and ended with secret ballots. That did not prevent the strike; nor did it prevent the Prime Minister from exploiting it. On 1 1 May, 6 days after the strike began, the Prime Minister declared on television that the men concerned would ‘not get a cent’ of their wage claim. That was the Prime Minister’s way of settling a disputeby appointing himself a wage-fixing authority. The Prime Minister was dictating settlement terms to the Arbitration Commission in the controllers’ dispute as surely and as arrogantly as he was dictating to the Commission on the matter of a wage freeze.

Figures given to me last Thursday by the Minister for Employment and Industrial Relations show that the Government spent $24,000 of public money on newspaper advertisements to publicise the Public Service Board’s case in the air controllers’ dispute- that is, to publicise one side of an argument that had been going on for 1 V4 years. Every intervention by the Government in that dispute was partisan and provocative. On 12 May the Prime Minister threatened to bring in the armed Services to break the strike. A day later he threatened to recall Parliament. He had a new remedy in store- gaol sentences for men who pressed their wage claims. Last Tuesday week, according to an Australian Broadcasting Commission news report the following day, the Prime Minister stated that the executive of the ACTU had rejected Mr Hawke ‘s proposal for amendments to the Industrial Relations Bureau. That statement was not only false, reckless and irresponsible, but it also showed a degree of pettiness and malice that no other head of government in an industrial nation would display. No dispute was ever settled by such methods; no future dispute will ever be settled if the present Prime Minister intervenes in it.

At least we know where the Prime Minister picked up his unsavoury ideas on industrial relations. As opposition spokesman on industrial relations the Prime Minister was receiving free research assistance and advice from Mr Keith Compton Gale around the end of 1974. A report prepared for the New South Wales Government by Mr John Spender, Q.C., has disclosed that Mr Gale, as managing director of Gollin Holdings and Gollin and Co. Ltd, borrowed over $900,000 from Gollin funds from August onwards in 1974 for his private purposes and for quite impermissible uses. While Mr Gale was helping the Prime Minister with his industrial relations policy he was helping himself to more than $900,000 of Gollin funds. No wonder he could afford a research officer and second him to the staff of the present Prime Minister. Mr Spender’s investigation into the Gollin companies was initially ordered by a Liberal Government- by the Liberal Attorney-General of New South Wales on 6 November 1975. On 4 May I asked the Prime Minister about his association with Mr Gale. The Prime Minister gave this revealing answer.

A certain person many years ago did provide some assistance in helping to develop industrial relations policy while I was industrial relations spokesman for the then Opposition. That policy of course is the official policy of the Liberal Party. The service was provided in support of the Party and not for one second of any individual.

That statement amounts to this: The official policy of the Liberal Party on industrial relations was prepared with the help of a man who is reported to have misappropriated over $900,000 of his company’s funds. How much of the Liberal Party’s industrial relations policy was prepared with Mr Gale’s assistance? How much of the proposal for an Industrial Relations Bureau was the work of Mr Gale? The Prime Minister must reveal the full extent of his own obligation and his Party’s obligation to Mr Keith Gale. He must tell us exactly what services Mr Gale provided. He must tell whether any part of the $900,000 misappropriated by Mr Gale found its way into Liberal Party funds. He must tell us whether the Liberal Party has ever received funds from the Gollin companies for political purposes. After nearly 4 weeks the Prime Minister has still not answered my question on notice to him of 3 May, No. 793, seeking details of his meetings with Mr Gale. The Prime Minister either cannot reply or is too ashamed to come clean on his relations with a certain person many years ago. The certain person was Mr Keith Gale- a corporate criminal. It was not ‘many years ago’; it was less than 3 years ago. Mr Speaker saved the present Prime Minister and his Party from a longer and deeper involvement with this man.

Where do Australians stand as a result of the economic and industrial policies of this Government? They are worse off than before. Their real incomes and living standards have declined. Since April 1975, when wage indexation was introduced, incomes have risen less than prices have risen. Even under wage indexation, employees have received less than the cost of living in four of the last five quarterly judgments of the Conciliation and Arbitration Commission. Unemployment has reached its highest level since the great Depression. The Government has no plan, and no desire to bring it down. Unemployment among young people- the gravest social problem in the Western world- is treated with contemptuous indifference. In the Liberal scheme of priorities the welfare, the security and the future happiness of Australian youth are subordinated to an obsession with corporate profits and a heartless manipulation of the Federal deficit.

In February, the Commonwealth Statistician reported that 126 400 young people between 15 and 19 years of age were unemployed. One in every 6 young people in the labour force was out of work in February and the figures were drastically higher in many rural and outer suburban areas. If last year’s graduates and school leavers cannot find work, what hope can there be for the thousands of students graduating at the end of this year? The Government’s sole response to the plight of youth is to clamp down on unemployment benefits. The Government is still breaking the law and defying the High Court in refusing benefits to school leavers who were entitled to receive them.

For the unemployed, especially the young, the Government offers neither sympathy nor hope. For the rest of this century a growing body of our people, alienated and without hope, largely identifiable by age or region, will nurse their rankling memories of social rejection and personal disillusionment. They will bear the scars of that experience for the rest of their lives. Those scars, their suffering, will be the only lasting legacy of the Fraser Government.

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

La Trobe

-We have just heard in the course of this debate on the Supply Bills, a contribution from the Leader of the Opposition (Mr E. G. Whitlam) which was another of his eloquent contributions in this House. However, I think it is unlikely that anybody could expect to lead the Opposition or indeed the Government while their approach to measures that come before the Parliament and to Bills which are debated in the Parliament, results in nothing more than a cynical attack on what are false standards. We might think that the Leader of the Opposition was on the offensive during the course of that speech; the fact is of course that he was on the defensive because he has a certain appointment tomorrow which is likely to cause him a good deal of embarrassment.

The point is that there was no substance to the speech he made. He attacked the Government. He offered absolutely nothing as an alternative. He offered nothing in the way of policy. He completely and utterly failed to recognise the fact that recovery is under way in this country; that the inflation rate is coming down and that investment is taking place in industry, both by small business and larger business, to see that employment opportunities are again available for the people who want to work. The Leader of the Opposition positively refuses to recognise that these things are happening. It is the Jonahs in the Opposition, such as the Leader of the Opposition and those who sit behind him, who have done so much to set back the recovery which would otherwise have been a good deal more advanced by this stage in the Government’s term of office.

When I heard the Leader of the Opposition speak, I was reminded of a pamphlet that has been distributed recently in the electorate of La Trobe. The pamphlet bears no authorisation but apparently it comes out under the auspices of nothing less than the Blue Gum Press. That pamphlet offers ‘Labor’s Alternative Economic Strategy’. So at least the pamphlet which has been distributed in La Trobe in support of the Opposition does offer some sort of strategy. The Leader of the Opposition of this Parliament and those who sit behind him offer no such strategy. Perhaps it would be appropriate, in the circumstances, if I told the House of one or two of the proposals in the strategy which has been circulated. The first thing it calls for is the restoration of the Regional Employment Development scheme- and I shall deal with that in a moment. The second thing it calls for is nothing less than:

A modest increase in government expenditure to maintain essential government programs.

Unfortunately, the strategy fails to set out any details of the amount of increase in government expenditure or, more importantly, to where that government expenditure should be directed.

Mr Hodgman:

– Does it mention $800m?


– I shall come to that in a moment. But even more significantly, the pamphlet leaves out what would be the consequences of such an increase in government expenditure at this time. Now, as my friend the honourable member for Denison says, at the weekend there was a call by a prominent member of the Opposition for an increase in Government expenditure of no less than $800m in the building industry and, I gather, one or 2 other projects as well; though, of course, that was not spelled out in detail. This expenditure, we are told, is going to provide jobs for another 50 000 Australians. There is no reference in that statement or indeed in this pamphlet to the effect that would have on the deficit, to the effect it would have on interest rates and to the effect it would have on inflation. They are simply idle words which emanate from the minds of people who are devoid of any policy, devoid of any concern for the recovery of this country and who fail the whole way along the line.

I am glad to say that the people who live in the La Trobe electorate can see through this sort of cheap political stunt. During the course of the Labor Administration, they have seen deficits go to nothing less than $3, 800m in one year. And 3 years before that, when Labor took office, the deficit was negligible. The pamphlet then calls for full indexation of wages- something which the previous Labor Government did not believe in itself. In fact it was prepared to go to the Conciliation and Arbitration Commission and argue against it. Yet in this pamphlet the Labor Party calls for the restoration of full indexation of wages. There is not one member of the Opposition who sits in this House who does not understand the consequences for Australia, for employment opportunities in this country and for our competitiveness in world trade if full indexation of wages is carried out by the Commission. Honourable members opposite know the consequences but they are not prepared to admit it. They put out a pamphlet in support of their policy which is quite at odds with what they know the exact and true position to be.

Mr Hodgman:

– To be fair to them, there is only one member of the Opposition sitting in the chamber at the moment.


– My friend says that only one member of the Opposition is sitting in the chamber. I know that is right. I have noticed that they do not like to hear what is being said because it hurts when we have to get down to discussing the real situation which exists in this country, what the real problems are, how those problems came about and, more particularly, how those problems are being solved. The Leader of the Opposition typifies the attitude which the Opposition shows in these matters by specifically failing to put forward any alternative policy. The Labor Party is bereft of economic policy. The policies that they did have brought about in 3 years the greatest havoc that could possibly be imagined. Indeed it was far beyond what could possibly be imagined. Yet the Leader of the Opposition has the hide to get up in this chamber and talk about the borrowing of money. He was the person who went to breakfast with Iraqi emissaries to try to borrow- how much was it?

Mr Martyr:

– Oh, thousands and thousands of millions.


– It was not for this country-it was not quite as much as my friend suggests, either- but it was for the Australian Labor Party.

Mr Wentworth:

– It was not to be a loan; it was to be a gift.


– My friend reminds me that it was not to be a loan; it was to be a gift. It was money from the bazaars of the Middle East to come into Australia, with a political pay-off subsequently, for the purpose of funding the Australian Labor Party in this country. The Australian people saw through that in quick time and gave their judgment on it on 13 December 1975. I want to discuss the RED scheme in a little more detail. In the discussion of any finance Bill it is important to discuss employment opportunities and what the Government can do to assist in programs for this purpose. But first I wish to introduce another note for a moment. I should like to refer to a very significant event that happened in my electorate recently.

Mr Falconer:

– Not the quads again?


– My friend behind me from the neighbouring electorate of Casey reminds me of something with which he is pleased, as are other members of this House- that recently we had the good news that Mr and Mrs Roger Hughson became the parents of quadruplets. Mr and Mrs Hughson live at Monbulk, which is in the heart of the La Trobe electorate. The birth of quadruplets is very unusual, but this event was made even more unusual by the fact that the quadruplets are identical male babies. I am told that the statistical chance of quadruplets being born is something like one in every half million births, but the chance of identical male quadruplets is at even longer odds. This event has caused a good deal of celebration among those who have recognised the event. I hope that feeling extends to the Hughson family and their immediate relatives, as I am sure it does. Last week in this Parliament I asked a question of the Minister for the Environment, Housing and Community Development on this matter. The Minister was just as stunned as we were in the electorate at this rare event. I was pleased that he undertook to liaise with the Victorian Minister for Housing, my colleague Mr Hayes, to see that we make adequate provision to help this family. Recently I telephoned the Victorian department and established that they are in touch with the family. On this occasion it has to be recognised that we need to be sure that the help that we as a government give to the Hughson family is the sort of help that will best suit their immediate requirements.

Mr Martyr:

– There are family allowances.


– My friend refers to family allowances. The arrival of these quads of course takes the Hughson family from three children to seven, which qualifies them for substantial help from the family allowance scheme. But in addition, as my friend would recognise, we will need to go a good deal further than providing that assistance. This House congratulates the Hughson family. Mr Deputy Speaker, I thank you for your nodding approval that I convey to that family the congratulations of the House on the arrival of David John, Scott Bradley, Clinton Neil and Grant Roger Hughson. On this occasion I think congratulations should go also to Dr John Grantley Shelton and the team at the Royal Women’s Hospital. As the doctor would be the first to recognise, this is a team event. I think all at the Royal Women’s Hospital should be very pleased indeed with the medical record in this case. It reflects very well on the medical services that hospital has provided in this case and in many other cases.

I was referring previously to the reintroduction of the RED scheme which was mentioned in the pamphlet to which I referred a little while ago. I have had requests from every municipality in the La Trobe electorate for a reintroduction of the RED scheme or something like the RED scheme. What has to be recognised in this situation is that the RED scheme as it previously existed under the Labor Government was the sort of scheme to ‘make work’. It was a make work’ program. The difficulty in such programs is that they do not really solve the basic problem that exists. Everybody in this Government recognises that unemployment is at an intolerably high level. But the Government expresses the view- I have conveyed this to the municipalities involved- that there are certain basic causes for the present unemployment problem and we do not believe that by creating expensive ‘make work’ programs we will grapple with the basic problem. The Government believes inflation is the principal cause of the high levels of unemployment and that, unless corresponding cuts are made in other programs, increased Federal Government expenditure on relief schemes will only add to the deficit, thereby aggravating the inflationary spiral.

Some evidence of this is given by these figures: In December 1972 the rate of inflation was 4.6 per cent a year and the total number of unemployed was 136 000 or 2.4 per cent of the work force. By December 1975 inflation was at a rate of 14.3 per cent and the total unemployment figure had climbed to 328 000 people, which was at that time 5.4 per cent of the work force. The information that we have from every comparable country confirms that there is a direct relationship between inflation and unemployment. Every country that has experienced rampant inflation with corresponding high levels of unemployment has also experienced a return to more acceptable unemployment levels as inflation has been brought under control. It has been suggested by some municipalities that the recoup which would come back to the Government in taxation and in the reduction of unemployment benefit payments might cover or at least reduce the cost of relief programs. We estimate that such savings would total only about 30 per cent of the direct unit cost of labour and materials in such schemes, and there would be other labour related expenditures such as workers compensation payments and on-cost charges which cannot be ignored.

At the weekend I was approached by a number of people during a public meeting. They suggested that people receiving unemployment benefits might be required to undertake certain work programs in order to qualify for unemployment benefit payments. At first sight these proposals may have some merit but on closer examination I do not believe they stand up to criticism. I remind the House that unemployment benefit payments are made by the community to persons who are genuinely seeking work but who are unable to find it. The payments are a recognition that persons for whom no continuing employment is available should in some way be compensated. Of course, there are people who seek to take advantage of the system and who prefer to subsist on unemployment benefit rather than to work. However, the number of such people is relatively small. The Government has been taking vigorous steps to prevent people from exploiting the present unemployment benefit system. In addition, there is a problem in relation to the contravention of International Labour Organisation Convention 29, which refers to the use of forced labour and which Australia has ratified.

In respect of the number of young people who are unemployed, it is not generally known that at the end of the 1976 calendar year 95 per cent of the schools leavers from the previous year who had sought jobs were in employment and that by March 1977 the corresponding figure was more than 75 per cent of the school leavers of 1976. We believe that the current figure is in excess of 80 per cent. I mention also that at the end of April there were 32 600 school leavers looking for employment, The comparable figure for November 1975, which is when the previous Government was in office, was 60 249. In additionthe number of people under 2 1 years of age who were looking for employment in April of this year was 127 352. The comparable figure when we took office was 1 52 000.

Despite the protestations of the Leader of the Opposition, despite the sort of misleading information that is contained in the pamphlet distributed recently in my electorate- the most misleading and damaging pamphlet that I can possibly imagine, which was sent out without any authorisation but which purported to support the Australian Labor Party- and despite all the Jonahs who exist and who seek to defer the economic recovery of this country and the return to employment and investment opportunities, the fact is that recovery is under way. It is time that the Parliament and the country recognised this fact and pulled together to ensure that the recovery goes from strength to strength.

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


-The Bill before the House-Supply Bill (No. 1) 1977-78- is an important one. Its purpose is to provide interim finance appropriations for the service of the Government for the period from 1 July 1977 to 30 November 1977, during which period the 1977-78 Budget and the accompanying legislation will be introduced. It is appropriate at this stage to recall the traumas to which this nation was subjected by the present Government, then in Opposition, each time a Supply Bill or Budget was introduced by the 2 previous Labor administrations. We need to recall how the nation was forced to an unnecessary election in April 1974 by the unprecedented deferral of the passage of the Supply Bills at that time by the conservative majority in the Senate. The new Labor Government was subjected to further unprecedented obstruction by the conservative majority in the Senate, which culminated in the deferral of the passage of the 1975-76 Budget by the Senate and the Governor-General’s appointment of the first Fraser Government.

That Government and its successor, the present Government, came to office on a campaign founded on corruption, conspiracy and deceit, the story of which is gradually unfolding as the months pass. Most recently we have seen the role of Mr Wiley Fancher, the National Country Party’s stooge in that campaign, being gradually revealed and we have heard about his unpaid telephone bills. This man, who claimed direct contact with the present Acting Prime Minister (Mr Anthony) during the term of office of the first Fraser Government, has now been disowned by his former principals. He is the man whom the Minister for Post and Telecommunications (Mr Eric Robinson) described in this place last week as a screwball. To his credit the

Minister, who is now at the table, again acknowledges that description- and I agree with him.

However, Australians are yet to be told of the activities and relationship of the present Treasurer (Mr Lynch) during 1975 with the elusive Mr Khemlani and his now bankrupt, discredited and deregistered legal adviser, Mr John Licardy. Eventually the Treasurer’s dealings with Mr Licardy ‘s office and staff, the telephone calls between them, and the letters dictated by telephone from the then Deputy Leader of the Opposition’s office to Mr Licardy ‘s staff for submission to the Senate will be revealed. Sooner or later the story of the whole sordid business of money payments and dealings and the orchestration of Mr Khemlani ‘s appearances must be told. It certainly will be only a matter of time before the rats desert the sinking ship and the truth comes out.

The economic standstill and malaise brought about by the conservatives in their desperate grab for power in October-November 1975 have yet to be overcome. At a time when this nation is suffering from record unemployment, an entrenched high level of inflation and a record deficit, the Prime Minister (Mr Malcolm Fraser) has flitted overseas to escape the problems at home, being more concerned about the quality of his sleeping accommodation on an international airliner than about the awesome difficulties being faced by the 350 000 Australians who are unable to get work and who are trying to provide for their families. The honourable member for Adelaide (Mr Hurford), who is the shadow Treasurer, has moved an amendment to the motion for the second reading of this Bill, which reads:

That all words after ‘That’ be omitted with a view to substituting the following words: ‘whilst not declining to give the Bill a second reading, the House, noting the failure of the Government’s economic strategy, condemns its rigid resistance to feasible and constructive alternatives such as cutting indirect taxes and initiating selective stimulatory spending’.

I support that amendment. The Treasurer has criticised the result of the 1975-76 Hayden Budget, which he described, upon its presentation, as an economic disaster but which from

II November 1975 he saw fit to administer as the most appropriate financial document for the remainder of that financial year. He has compared the deficit of that Budget with the record deficit as at January 1977. The dishonesty of his Government is illustrated by the fact that he and his colleagues have sought to conceal the fact that the 1975-76 and 1976-77 deficits are not comaparable. They are not comparable because, on 26 June 1976, $250m was paid to the States for health services to be rendered in 1976-77 and clearly belonged to the 1976-77 national accounts. In the current year $200m was raised in loan funds on the open market by Telecom Australia, which was a departure from the previously established financial practice, in order to keep that amount out of the national accounts for the current year. Those 2 items constitute a difference of $700m in the comparison between 1975-77 and 1976-77.

Medibank payments were forced back into the private health funds, which again changed the impact on the national accounts. Again, part of the purpose of the exercise was to conceal the true impact on the community and to reduce the amount to be shown in the national accounts. In other words, the books have been juggled in an attempt to make this Government’s financial record look better than that of 1975-76. If these matters that I have mentioned and other matters, such as the $36.7m that the Australian National Line has been forced to refinance overseas for the purchase of 2 vessels from Europe, were to come into the national accounts for the current year the deficit this year would be much worse than the true deficit and the deficit appropriate to operations in 1975-76.

Let us look back a little at the performance of this Government as it has lurched from brainwave to brainwave since November 1975. During the debate on the 1975-76 Budget we were told that overseas borrowings would be a disaster and that they would mean the ruination of our economy. With the change of government in 1976 the present Government borrowed more that $ 1 billion abroad. It would have borrowed another $1 billion and not devalued in November 1 976 but for its hang-up over overseas borrowings and the myth it had propogated in 1975. As I have said, the present Government promoted the 1975-76 Hayden Budget as being an economic disaster but found it to be the most suitable financial course to follow.

In 1976 came the Lynch Budget. We were told that it would be the answer to everything, that all financial problems would be solved and that this nation would return to the land of milk and honey. At least that is what the Government thought. Unfortunately many of our business people, who ought to know better, thought the same thing. But that Budget and that brainwave lasted only a matter of a few weeks because overnight, on 28 November 1976, came devaluation. We then set sail on a new course. It was said that that new course would be the salvation of our economic ills, and the Lynch Budget was thrown overboard.

Along with devaluation came the enforced federalism proposals. Federalism, as we all know, was promoted by the Liberal-National Country Parties when in Opposition, even since they have been in Government as something that has the support of the States. The fact is that the States were hoodwinked at the Premiers Conference at the beginning of 1 976. Only now are they starting to realise the load that has been placed on their shoulders. It was after a week of bickering and very bad Press for the Government earlier this year when the Premiers and the Prime Minister met to discuss this new policy of enforced federalism and enforced financial responsibility for the States that the new brainwave was hatched- a wage-price freeze. It was said that this now would be the answer, that surely after all the problems this would be the ultimate solution. We were told that if only we could have a wage-price freeze and a consensus everything would come right by itself. But no sooner had that brainwave been dreamed up than it started to dissipate. As has properly become known now, the wage-price freeze developed into a wage-price fiasco and the onslaught of pent up price increases is now only starting to be felt in the community as each week several hundred items of household supplies rise in price, some rising substantially.

In describing the wage-price fiasco, I must recall the naivity of the Prime Minister in this House on the second day after the announcement of the wage-price freeze. When he was questioned as to how he would ensure that all price makers and sellers would follow the price reeze, he made that very simple statement that given good will and intention on the part of those involved, surely the administrative machinery would find a way. When questioned further in this chamber as to what would happen at the end of 3 months, how would these pent up price increases be spread across the economy and what would be the result, he again said that given goodwill and intentions surely the administrative machinery would find a way. There is the essence of his naivity in economic affairs; he just does not know what it is all about. It is an illustration of the born to rule syndrome of the ultra conservatives of this country; the belief that they alone are born to rule and that if they make a decision it is up to the Public Service to sort out the problems.

I want to turn for a few moments to the impact of this Government’s management on the Department of Transport, the Department’s record of bumbling incompetence and the heavyhandedness of the Minister for Transport (Mr

Nixon). We all have seen the deterioration in the quality of service provided by Government departments to the community and to industry as a result of the staff ceilings that have been implemented by this Government. We all have seen the claims made by the Prime Minister about how many public servants he has been able to dispense with. But nothing has been said by the Government about the disastrous impact this has had upon the quality of service provided to the community.

I would like to deal specifically with the Department of Transport. A few months ago I asked, by way of a question on notice, how many members of the Public Service were employed by the Department of Transport in Melbourne and how many had resigned in the previous 12 to 14 months. I received an answer in writing- it is recorded in Hansard- indicating that the number was 1650 and that calculations showed that 10 per cent of those officers had resigned from the Service in the previous 12 to 14 months. Such a massive outflow of most experienced personnel in key safety areas of a major department such as the Department of Transport shows a disastrous record of mismanagement. I shall come to the effect of that position a little later.

Only last week I had a further letter from the Minister for Transport advising me that the answer he gave me some weeks ago was incorrect, that the Department of Transport was a dynamic department and that its numbers fluctuated from day to day. He said that the answer he gave me in respect of 1650 staff being employed in the Department of Transport in Melbourne was incorrect, that in fact there had been 1980 staff at the end of June 1976. But my question was not asked at the end of June 1976; it was asked earlier this year. What that letter from the Minister reveals- it has since been incorporated into Hansard by the Minister- is that the Department itself, never mind the Minister, did not know how many officers it had employed in Melbourne. It is not a bad kind of mistake to make- it had 330 more officers in Melbourne than it told the Parliament it had. Surely it must really be a dynamic department when it can multiply like that. But the result of the decline in the numbers in the Department of Transport has been a deterioration in the service offered to the industry. This has been revealed in 2 ways. Firstly, let me instance the fact that air navigational aids were not serviced for quite a period several weeks ago because officers of the Department in Melbourne could not receive travelling expense allowances to go and service them or check whether they were operating. The procedure being followed was to wait until a navigational aid went out of service and for that defect to be reported before ultimately on officer was sent to repair the unit.

I am not the only person raising this matter. I want to draw the attention of the Parliament to the campaign being conducted by the aviation industry union. These are not rabid militant left wing unions; they are the conservative unions in our society whose members are, in the main, the better paid members of the workforce. These unions are waging a very serious campaign against this Government. They are asking the Government only to adopt its own 1975 election policy promises. They are seriously concerned about the safety standards being followed by the Department. This is a very serious matter. I have raised in the House before the matter of safety standards as they relate to air travellers, and I am loathe to do so again. When I raised it in the Parliament some weeks ago the Minister saw fit not to give me a response. There is something wrong when the Minister cannot see fit to respond to the wide campaign being waged by the unions because the air travelling public needs to be reassured that safety standards are being maintained or that changes are being made to the standards themselves.

This leads me to the event that should not have happened- the air traffic controllers strike. We are told by honourable members opposite that if secret ballots were held strikes could not occur. We are told that that is all we need to have. I am satisfied that the air traffic controllers strike occurred as a result of intimidation and abuse of the membership and the officers of the union by supporters of the Government. The Government wished to create a climate that it thought would be favourable to the introduction of the Industrial Relations Bureau legislation. The honourable member for Denison (Mr Hodgman) smiles at my remark. I made that remark in all seriousness. I had a long discussion with some members of the executive of the air traffic controllers union a few days prior to the strike and a few days prior to the ballot being taken. Even the most mild mannered conservative member of that association felt affronted by some of the things that were being said about them in this place and outside it by supporters of the Government. Members of the air traffic controllers union,’ a union that is not affiliated with the Australian Council of Trade Unions or the Australian Labor Party, voted by way of secret ballot against the recommendations of their own executive to go on strike. Only a small majority of members decided to go on strike, and I am quite satisfied that the members who represented that small majority who decided to strike were influenced and aggravated by the abuse that had been dealt out to them in the past by supporters of this Government. As a result of the strike massive losses were incurred by the industry. Trans-Australia Airlines and Ansett Airlines of Australia, each lost about $5m, and Qantas Airways Ltd lost about $10m. The tremendous dislocation and inconvenience caused to travellers from overseas within Australia as well as to the Australian community is something that should not have occurred and the responsibility for it lies at the feet of this Government. It was an exercise in industrial heroics and industrial irresponsibility by this Government.

The next matter to which I refer is in the estimates for the Australian Security Intelligence Organisation found in Supply Bill (No. 1 ) under the Department of the Prime Minister and Cabinet. We see in that Bill an additional amount of $3.6m. That brings the total for that Organisation up from $7.8m which was the amount in Appropriation Bill (No. 1) included in the Budget documents last year. If one makes a comparison between the projected figures and the total figures for this year one finds an almost 20 per cent increase in expenditure over the year 1975-76. I know that honourable members opposite- these conservatives- are beleaguered by the belief that there are communists and subversives under every bed and behind every toilet door. In this case I instance what I see as an irresponsible waste of taxpayers’ money in my electorate. I do not know the parties involved but I do know the facts which I am going to relate. On 27 February in my electorate a dance was conducted at the Charlestown community hall by a group called the Young Socialists. I do not know who they are and who they comprise. I am not interested in knowing. That hall belongs to the Lake Macquarie Municipal Council and is operated on a rental basis for that Council by an estate agent. That estate agent’s staff was instructed by a member of ASIO to report to ASIO on whoever made bookings for the hall and when the bookings were made.

Subsequent to that dance the mother of a girl who went to that dance contacted my office and complained that her daughter had been given a Young Socialist membership ticket. When I made inquiries from the rental agent and from the police station I found that on the Friday prior to that first dance being held an officer of ASIO stationed in Newcastle had been sent to the letting agent to find out who had rented the hall, the address of whoever rented the hall and what that person was doing. If that is all the Australian Security Intelligence Organisation has to do in this nation and if that is why we provided $7.8m this financial year, then it is about time that ASIO members went back to school. It was a young peoples dance. If we are going to indulge in schoolboy exercises like this, it seems to me that priorities in matters of grave national security in this nation are very low.

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


-I cannot deny that there is some substance in the amendment moved by the honourable member for Adelaide (Mr Hurford). When I read the amendment I was reminded irresistibly of Blake’s couplet:

A truth that’s told with bad intent

Beats all the lies you can invent.

In the policy of the Australian Labor Party there are so many things that are bad that none of us would want to buy the package as a whole, even if one or two good items are in it. The economy of Australia now needs encouragement, not castigation. One hopes that these Supply Bills will not be the precursor to a hard Budget, because a hard Budget is needed by the economy like a hole in the head. I understand the troubles of the Treasurer (Mr Lynch) which arise very largely and almost entirely through the charging of capital works against revenue. People do not understand that State loan programs appear as part of the Federal Government’s deficit. Until we get some kind of honesty in the presentation of accounts we will always have these Budget difficulties which are now throwing our present Treasurer in to these kinds of economic contortions. This is not the first time that this has happened. I regret to say that this bad habit arose in a small way under the Menzies’ Government and it subsequently developed. I have protested against it in the House and in the Cabinet room on many occasions. I do not withdraw my protests now. In the time of the Labor Government similar protests were raised in some quarters and the Department of the Treasury squashed them by presenting to Ministers a memorandum which was shown to me at that time. I have a copy of that memorandum in my hand. It deceived the rather naive Labor Party Ministers just as I am afraid it deceived and still deceives our Ministers. The memorandum was reissued a little while ago by the present Treasurer. He sent it to Senator Wright with these words:

You recently asked my Principal Private Secretary for some additional documentation concerning options for financing the Government deficit.

The Treasury has given me a further paper on the subject from their files and I now forward it in the hope that it will be of assistance to you.

When I saw that paper I recognised it as probably verbatim, but at any rate in substance, as the paper which was given to Labor Party Ministers and which perhaps had even been given in draft form to earlier Ministers. I showed that Treasury submission to Professor Sir Leslie Melville. He wrote me a letter in regard to it on 28 April and he concluded with these words:

You refer to your comments to it as a Treasury presentation but 1 cannot believe that this muddled document represents a Treasury view.

He was unable to believe that it was a Treasury paper. Certain other people have had the same difficulty in believing that a paper of that muddled character could emanate from the Treasury. Professor Sir Leslie Melville is perhaps the most dintinguished and experienced economist we have in Australia. Certainly he is the most experienced and distinguished economist still active. As honourable members know he has been a director of Australian Reserve Bank and Government economic policy for many years. He sent me that comment. I telephoned him and asked whether I could publish his letter. He said: You can circulate it, but do not publish it until I redraft it because it was written in some haste. I would rather like to revise it before you do so’. He has now sent me a letter dated 1 1 May. I have that letter in my hand. I ask for permission for the letter to be incorporated in Hansard.


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

The document read as follows- 7 1 Stonehaven Crescent DEAKIN, A.C.T. 2600 11 May 1977

The Hon. W. C. Wentworth, M.P.

Parliament House


Dear Bill,

I agree that the document ‘Budget Accounts and Deficits’ is misleading.

In paragraph 29 it is stated that ‘in terms of their economic impact, expenditures on capital works are no different from current expenditures’. This is a breathtaking example of suppressio veri. The statement is true in the very short run, but in a longer run it is grossly untrue. It is because of their different economic effects that it is prudent to finance current expenditures from current revenue and capital works from loans.

In paragraph 30 it is stated that ‘there are no particular reasons why the financing of capital works in the central Government sector should be handled differently from the financing of current expenditures’. This is no doubt intended to imply that capital works should be financed from current revenue. But if there were no difference between the economic impact of current expenditures and of expenditures on capital works, the statement could be interpreted to mean the precise opposite and to support the arguments of those who propose that taxes be reduced and the short-fall financed from loans.

The objection raised in paragraph 24 that increased borrowing would involve higher rates of interest is of highly doubtful validity. One of our problems today is that people will not spend their incomes, and savings are accumulating or running to waste. If the increased disposable income left in the hands of taxpayers by a reduction in taxes were allowed to accumulate in deposits with banks (and not withdrawn by official deflationary actions) the funds for financing the increased borrowing would be available without any increase in interest rates. If, on the other hand, taxpayers increased their spending, the national income would increase, Government revenues would grow and expenditure on unemployment and welfare would decrease. The amount the Government had to borrow would be sharply decreased and might be financed by the increased savings of individuals and by the cash flow of firms.

Though socialists might dissent, I should expect a Liberal Government to agree that individuals should be given the greatest possible freedom in the spending and investing of their incomes. It follows that taxes should be kept as low as is prudent. It would not be prudent to keep taxes so low that over a period of years current expenditures were financed by loans. This would lead to an accumulating public debt and eventual financial disorder. This would, however, not be the case if the Government borrowed to finance capital works which could be expected to increase the national income. The revenue to meet the interest charges would flow to the Government without any increase in rates of taxes.

Some capital expenditure will increase the comfort and enjoyment of people over many years without increasing the national income in ways that will bring the Government more revenue. Illustrations are hospitals, an galleries, museums, stadiums and public buildings. While the financing of these by loans may result in increases in rates of taxes in future years, it is reasonable that those who enjoy the benefits should meet part of the cost instead of the whole tax cost falling on the present generation. Such expenditure should however be restrained so as not to impose too heavy a tax burden on future generations or too difficult a loan raising problem on the present.

If budgetary policy is to have healthy economic effects it is, therefore, fundamental that current expenditures should be met from current revenue and capital expenditures from loans. Despite this basic proposition there are good reasons for financing capital expenditures from current revenue in times of boom because of its deflationary effects, but there are equally good reasons, in depressions, to press the financing of capital works, and even current expenditures as far as is prudent, from loans.

How far is prudent? There is very little evidence today that the inflationary pressures are due to excessive demand. The pressures are almost entirely cost pressures due to increases in wages, both current increases and the cumulative effect of past increases, and the higher cost of imports. In these circumstances, it should be prudent to finance capital works from loans and some part of current expenditure. If an agreement could be reached for the trade unions to accept wage restraint in exchange for a reduction in taxes, there might be no increase in inflationary pressures as a result of the increased Government borrowings, and no increase in rates of interest. If there were no wage restraint there would be inflationary pressures, but these must be faced whether recovery comes from Government action or private initiative. It would be foolish to stop recovery. We must find some other way to stop inflation.


– I shall read one or two extracts from the letter which Sir Leslie Melville sent me as his comments on the Treasury memorandum which he stated was so muddled that he could not believe that it came from Treasury. The whole letter will be in Hansard. He stated:

In paragraph 29 it is stated that ‘in terms of their economic impact, expenditures on capital works are no longer different from current expenditures . This is a breathtaking example of suppressio veri. The statement is true in the very short run, but in a longer run it is grossly untrue.

He goes on:

The objection raise in paragraph 24 that increased borrowing would involve higher rates of interest is of highly doubtful validity.

This is from the man who has had the most experience in the Australian capital market of any man alive. The letter continues:

If budgetary policy is to have healthy economic effects it is, therefore, fundamental that current expenditures should be met from current revenue and capital expenditures from loans. Despite this basic proposition there are good reasons for financing capital expenditures from current revenue in times of boom because of its deflationary effects, but there are equally good reasons, in depressions, to press the financing of capital works, and even current expenditures as far as is prudent, from loans.

He concludes:

If there were no wage restraint there would be inflationary pressures, but these must be faced whether recovery comes from Government action or private initiative. It would be foolish to stop recovery. We must find some other way to stop inflation.

Those are views which I share and have expressed from time to time. In support of my views I have quoted those of the man in Australia who should be the most listened to of all people because he has the widest experience in this field.

It seems to me elementary that there has to be a change in the presentation of government accounts. The Treasurer’s estimates for last year showed a deficit of $2,608m. That deficit, on the Treasurer’s own letter to me, was after debiting in $3, 869m for capital works, and that included the whole of the States’ loan programs appearing as part of the Federal deficit. I believe that a succession of Federal Treasurers have failed to understand this. They have been bemused by the Treasury, and it is damn well dme that this nonsense stopped because it is strangling the Australian recovery. I do not suggest for one moment that a different presentation of the accounts will decrease in any way the total amount that has to be raised by loan, but let us do the honest thing. Let us call it, as it is called overseas, a public sector borrowing requirement. Let us stop the kind of nonsense which was had from the Treasurer when he said ‘I am going to balance my Budget eventually. That means I am going to charge all my capital works against taxation. ‘ Think what that would mean for the Australian economy.

Melbourne Ports

– I cannot follow the honourable member for Mackellar (Mr Wentworth) down the fascinating paths he embarked upon, except to comment that I think it is a moot point in a community whether the Budget balances the economy or the economy balances the Budget. What is sometimes rather glibly called a deficit is simply the difference between current expenditures and current revenue. The difference is found by loan, by resort to the Reserve Bank, or by raising more taxation. The differences between private accounting and public accounting are so great that what is capital and what is income need a lot more defining. I want to quote briefly from something the Treasurer (Mr Lynch) said recently when he was addressing the South Australian Division of the Securities Institute of Australia in Adelaide on Friday, 20 May, and I will refer to 2 extracts from his speech. He said:

The high cost of labour has meant an increasing tendencyreflected in the capital investment figures already mentioned- to replace men by machines.

He had commented earlier:

In the cases of investment in plant and equipment, and investment in dwellings, there was very rapid growth.

I want first to ask the question: What is supposed to happen to the men who have been replaced by machines? If I may say so, that is a very important social question. I should also like to quote from the most recent issue of the Australia and New Zealand Banking Group Limited publication Business Indicators for May 1977. It points to the fact that factory production now seems to be lifting upwards somewhat, and then states:

After adjustment for seasonal influences, the index (all groups including Power) reached a record level of 171 in February, in the 1 973-74 boom.

I might point out that that was during the period of the Labor Government.

Subsequently, the index fell sharply to a trough level of 151 in May and June 1975. Since then, estimates of the index for March 1977 show that factory output has nearly recovered to the 1973-74 record level.

I simply underline the point that factory production was at its highest level ever during the period of the Labor Government. That was a rather easy statement from the Treasurer. It is true that when you bring in capital equipment you replace manpower by machines. That has been the whole course of Western industrial development. But surely in a society which still claims a belief in full employment we have to answer the question: What do you do with the men who have been displaced? We had the Jackson report not very long ago, on which a White Paper has now been prepared by the Government, and apparently there is a conflict in the Australian community at the moment. Manufacturing has declined quite significantly as a provider of total employment, both absolutely and relatively, over recent years. The only hope for expanding manufacturing industry’s total absorptive capacity apparently is to export manufactures, but nobody has come up with the likely areas in which we can increase our exports. Perhaps the answer is to get more sophisticated capital equipment, to expand the total capacity, which in turn will help to absorb those seeking employment.

I gave the House an illustration the other day which pointed out that in the early days when I was a student of economics employment was divided into primary and secondary. We then had to find a new category called tertiary to connote that primary and secondary did not indicate all the areas of employment available in a sophisticated economy. Reading an American publication recently, I found that they are introducing a fourth term called quaternary, which apparently acknowledges that in the age of computers and the like primary, secondary and tertiary are no longer competent to answer the demands of society to employ its people. I was very interested to receive an invitation to attend a genetic engineering conference tomorrow, but I think it is time that a little more attention was given to doing something about those who have already been born, who have gone through our schools in the last15 or 16 years, and are now facing the grim reality that they are supposed to be better educated than people have ever been before. But it seems that no one wants to hire them. Surely there has to be better engineering in regard to what comes out of the education stream. I do not believe that education is only to equip people to work. It has to equip people to live sensibly and sanely in a societyin which it has become very difficult to live sensibly and sanely. Nevertheless, the majority of us are doomed for our forseeable futures to be employees of somebody, whether it be private enterprise or government, at the primary level at one end or the quaternary level at the other end.

It is time this Government began to acknowledge that it has been in office long enough now not to put all the blame for what is wrong in the economy- this is not the only economy in the world that has problems- upon the 3 years of Labor Government. The quotations I have given from the Australian and New Zealand Bank report showed that we had reached the highest production ever of factory goods- the quantitative things. Maybe our problem in the future will be that we must put more emphasis on developing the qualitative as against the quantitative. I do not believe that this Government is in any sense facing up to those realities. I have said this in the Parliament previously. I cannot really think of anything substantive that has been done by this Government that has set the economy on any better road than it was on before. I believe that the economy will right itself. I believe that people will realise that they must show a bit more initiative. The great private enterprise has been anything but enterprising in throwing its shoulder behind the need to recognise what some of these social problems are. Those problems do not afflict only Australia. They afflict every Western economy in the world. If the Western economies do not find a solution, they will not for very long survive as democratic communities. We are getting to the point at which the tolerance of the community is being strained about the amount of unemployment visible, and the amount of under-employment invisible. It is time we faced up to it.

Amendment negatived.

Original question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 2129

SUPPLY BILL (No. 2) 1977-78

Second Reading

Consideration resumed from 24 May, on motion by Mr Lynch:

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.

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

page 2130


Second Reading

Debate resumed from 26 May, on motion by Mr Sinclair:

That the Bill be now read a second time.

Mr Eric Robinson:

- 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 Wool Tax Amendment Bills Nos 1 to 5 as they are associated measures. Separate questions will, of course, be put on each of the Bills at the conclusion of the debate. Mr Deputy Speaker, I suggest therefore that you permit the subject matter of the 6 Bills to be discussed in this debate.


-Is it the wish of the House to have a general debate covering the 6 measures? There being no objection, I shall allow this course to be followed.


-The House is debating a series of Bills dealing with the collection of a special levy to assist in financing the operations of the fixed floor price scheme and the 3 per cent levy representing wool growers’ contributions towards financing wool research and promotion. Before dealing with the Bills in particular, I must observe that the Minister for Primary Industry (Mr Sinclair) has again presented a host of important agricultural policy Bills to the Parliament during the last sitting days of a hectic parliamentary session. No doubt, one of the reasons for the delay is the Minister’s increasing disregard for primary industries and his failure to devote adequate attention to his ministerial responsibilities. When in opposition the present Minister chose to denigrate the work done by the Australian Labor Pary for rural producers. Never during our administration did the Australian Labor Party Minister for Agriculture attract such criticism as the present Minister.

It is pertinent to quote some of the more outstanding headlines which have appeared in rural newspapers around the country over the last 4 to 5 months. In the Farmers Weekly of 1 7 February 1977, the Farmers Union of Western Australia told the Minister to ‘honour rural promises’. The Land of 24 February this year reported the general manager of the Australian Wool Corporation, Mr Malcolm Vawser, when presiding at a meeting of producers in the country, of accusing the Minister and his Government of frustrating delay in introducing the 1973 wool marketing recommendations. This follows remarks made at the national Agricultural Outlook Conference in February of this year by Mr A. C. B. Maiden, the chairman of the Australian Wool Corporation and previously secretary of the Department of Primary Industry. He was forced into the position of openly castigating the Minister for his failure to give any firm indications as to how the Government would act in relation to the 1973 wool marketing recommendations. It is an extraordinary state of affairs that a man of Mr Maiden’s standing and calibre should be drawn to the point of attacking his own Minister.

The president of the United Farmers and Wool Growers Association, Mr Milton Taylor, said that the wool industry ‘has been frustrated to say the least at the indecision and lack of action taken by Mr Sinclair’. The Land newspaper, many of whose directors are National Country Party members of the Parliament or active members of the National Country Party, took the rare action of writing an editorial warning the Minister he should not fail to notice the increasing amount of criticism about his administration of the Primary Industry portfolio. On 10 April this year, the wool section of the Farmers Union of West Australia unanimously carried a resolution of no confidence in the Minister. In addition the Farmers Union of West Australia gave Mr Sinclair an opportunity to reply to the accusations but he declined to do so. All these organisations have members who have been strong traditional supporters of the National Country Party. It now appears that they understand the National Country Party no longer protects and nurtures the interests of the people in agricultural industries. It uses its position to give the impression that it is helping them but kicks them in the tail when it feels like it.

Even more importantly, producers within Mr Sinclair’s electorate have been critical of the lack of action. The Inverell branch of the Graziers Association of New South Wales whose chairman, other members and firm supporters are in the National Country Party, has expressed its strong reservation about the Minister’s capacity to deal adequately and promptly with urgent rural policy matters. Important rural organisations such as the Graziers Association of New South Wales are becoming disenchanted with the Minister’s approach to rural industry problems, his capacity for delay and his tendency to leave a wake of dissension amongst primary producers. In addition, the Minister has given the impression that it was the Liberal-National Country Party Government which made major break-throughs in assisting primary industry in the context of these Bills which deal with the wool industry. Of course, this is arrant nonsense. Some of the most significant measures were introduced by the Australian Labor Party, when in government, after years of opposition and procrastination by LiberalCountry Party governments. It was the Australian Labor Party which introduced a fixed floor price scheme which gave so much confidence to the wool industry and the commercial leaders within it and formed the basis for establishing stable price levels for one of our major primary produce exports. In its first years of operation the Labor Government’s commitment to this scheme involved up to $400m and had the market fallen it could have required as much as $600m. This sum significantly exceeds the value of any single item of assistance which the National Country Party has ever given to Australian rural industries.

During the early 1970s the Australian Woolgrowers and Graziers Council, the Australian Wool and Meat Producers Federation and the Australian Wool Industry Conference all requested the then Liberal-Country Party Government to agree to a fixed floor price scheme. The Minister for Overseas Trade (Mr Anthony) and the present Minister for Primary Industry constantly refused to take any action. The alleged supporters of the wool industry interests were seen to do no more than introduce a flexible reserve price scheme which was far removed from the requests and requirements of the wool growing industry. In addition, the Labor Party agreed to strengthen the powers of the Australian Wool Corporation, which strengthening went a long way to improving its effective operation in the market. Again on this occasion it is the Australian Labor Party which will be pressing for clarification and strengthening of the Corporation’s powers, and it is for this reason that the Opposition in the Senate, where we do not have the constraints of the Standing Orders which we have here, will propose amendments to the Wool Industry Amendment Bill.

Going back over the debates on the wool industry, it was the present Minister for Primary Industry who expressed strong reservations about the Labor Government’s proposals. On 28 November 1 974 he said, when speaking on the Wool Industry Bill (No. 2):

We suspect this piece of legislation. We believe that there are elements within the changes which this legislation will implement which are very desirable. However, there are other elements which we see rather as the product of an attempt by this Government for political purposes to change the character of those who have been operating very effectively and very admirably as the present members of the Australian Wool Corporation.

It is clear that the Minister still retains his reservations about the Australian Wool Corporation and thus he will continue to procrastinate about strengthening the Corporation’s powers. The Opposition seeks to determine how genuine the Minister and his supporters were about improving the Corporation’s trading and general negotiating position. Of course, the vehicle by which to do this has never been provided by the Government.

All Bills which the Minister has introduced in this debate represent legislation which was initiated substantially by the former Labor Government. But, even insofar as he has gone, the Minister has failed to fulfil his promises and obligations to rural industries. Earlier in the year he made great play of the fact that he proposed to give the Australian Wool Corporation the power to operate a scheme for limited offer of direct purchase of wool and to improve more specifically the Corporation’s functions and powers on freight rates for Australian wool carried overseas. One would have expected that in the course of amending the Wool Industry Act amendments to rectify both of these positions and to improve the Corporation’s overall strength within the market would also have been introduced. But, of course, we find that they are not. It appears that the Minister has been too lax in getting around to introducing them.

The statements which he made to the wool industry groups led the wool industry to believe that he proposed to introduce amendments to the Wool Industry Act which he now indicates will not be introduced until the Budget session. The Government’s failure to introduce these amendments must cast legal doubts on the Australian Wool Corporation’s ability to operate a limited offer to purchase scheme without legal challenge. The position is that at least one of the major wool trading groups has a legal opinion which could form the basis of a challenge to the limited offer to purchase scheme. Although the Australian Wool Corporation is a member of the Wool Committee group which recently has been to London in an attempt to negotiate the rates of freight with the Australia to Europe Shipping Conference, the Minister’s statement that the legislation giving the Corporation power will not be introduced until the Budget session must create doubts also about the Corporation’s legal ability to negotiate at present.

The absence of other amendments to the Wool Industry Act also must create doubts in the minds of growers as to how active the Corporation will be in operating this limited offer to purchase scheme. The proscrastination about introducing these 2 important amendments must give rise to the view that the Minister is pandering to the vested interests in the wool industry which are opposed to change and resent the Corporation having increased power. I must recall the comment which the Minister made on 28 November 1974 when speaking to the Wool Industry Bill. He said:

The wool buyers have said to me that the trading powers strike at the heart of the market forces present balance and if they are used to influence existing established markets, particularly in terms of export of processed wools, they could quite seriously prejudice the operations of those in the private sector.

I must observe that the National Council of Wool Selling Brokers, in conjunction with the Australian Council of Wool Buyers, is canvassing a proposal for the introduction of a wool exchange which would leave the wool selling brokers and wool buyers in an extemely strong position; in fact, a position which would be contrary to the spirit and the letter of the Trade Practices Act. The Chairman of the Australian Wool Industry Conference. Dr Don von Bibra, again acting without authority, apparently has committed the Australian Wool Industry Conference policy committee to a degree of support for the wool exchange proposal that one major organisation, the Australian Wool and Meat Producers Federation, would not have a bar of. I sense, as with the meat issue, that the Minister is using the divisions of opinion within the industry to delay taking any substantial action which would improve the position of the Corporation and, hopefully, the returns to the wool growers.

I am not alone in expressing these views. I find that the Graziers Association of New South Wales, which in the past through its special purposes fund has financially supported the National Country Party, is once more at loggerheads with the Minister and, importantly, the Minister for Overseas Trade. In his letter to rural producers published in The Land on 3 1 March, Mr F. M. Davidson, the President of the Association, said:

The Association ‘s annual conference has reaffimed its support for the objectives of the Australian Wool Corporation’s 1973 wool marketing recommendations and agreed to actively pursue their earliest possible implementation.

The Association was supported in that approach by the Australian Wool and Meat Producers Federation, but once more there is prevarication. Although the Minister states that he supports the objectives of the 1973 Australian Wool Corporation’s marketing proposals, he has refused to say just how far he is prepared to go and at what pace. What a remarkable lack of clarity. What a failure to indicate whether the limited offer to purchase scheme constitutes a single isolated experiment or a stage in working towards the implementation of the 1973 wool marketing recommendations. This is all the more extraordinary because the then shadow Minister, in the debate on the Wool Industry Bill in 1974, said:

The first thing I should say with respect to the Bill is that I hope that in his reply to the second reading debate the Minister .. . explains whether this piece of legislation is to be the response to the Australian Wool Corporation’s marketing plan or whether we can expect yet another piece of legislation that may in further detail embrace the prescription that was laid down to the Australian Wool Corporation in that marketing plan. If the Bill is to be an answer to that plan, I am disappointed that there has not been an express statement to that effect.

That was in 1974. That gentleman is now the Minister, and it is now 1977. It appears, therefore, that now, years later, the Minister and the Government are still unable to make up their minds; but then, on the basis of past performance this is par for the course.

The Minister has in his possession an interdepartmental report on the subject, and its recommendations, which was prepared at the request of the Labor Government, and subsequently has obtained from the Corporation a detailed assessment of how the marketing proposals would have worked had they been introduced for the 1973-74 and 1974-75 wool selling seasons. However, much to the consternation of the entire wool industry, the Minister will make no firm commitment one way or the other. This means that sections of the industry are deferring making investments or are turning to the purchase of wool from other countries. The Government and the Minister are now up to their old antics of creating the impression that they are doing something when, in fact, they are doing nothing and have no intention of doing anything.

The Opposition does not oppose these Bills but we believe that the powers of the Corporation should be extended. The Bill has a limited title. The Opposition was able to move amendments in the House because of that fact, but I have indicated that amendments of this nature will be moved in the Senate. We support the continuation of the 5 per cent levy to provide a reserve for any loss which might arise from the operation of the fixed floor price. However, the Opposition is not clear as to whether the funds in the market support fund which at present must be placed in low interest rate securities can be altered to allow the grower to get a higher return, thus making a greater contribution towards offsetting the effects of borrowing at a relatively high rate of interest from the Australian Government. There are also a number of areas in relation to research and promotion on which the Australian Government has not been clear. There has been an Industries Assistance Commission report on Australian Government funding of rural research and promotion. There is considerable hope within the producer organisations that the level of both activities will be increased, the costs-of running the International Wool Secretariat have increased as have the costs of local promotion in recent years. It will be necessary to examine in the future the commitments to these activities.

The Opposition hopes that during the winter recess the Minister will find sufficient time to attend to the drafting of amendments to the Wool Industry Act to increase the Corporation’s powers. I have a suspicion that if the present Government remains in power it will be May next year before the second and necessary series of amendments to the Wool Industry Act is introduced. In conclusion, the Opposition resents the fact that in the last week of a long parliamentary sitting it is presented with up to 12 pieces of rural legislation. We will give them speedy passage but major legislation of immense complexity such as the amendments to the Australian Meat and Live-stock Corporation and the first stage of the dairy plan has been foisted on the Parliament and the Opposition at short notice. Speeches and amendments to this comprehensive legislation have to be made in a short space of time. The Opposition will rise to the occasion but we resent not only the way in which we have been treated, but also the way in which the Australian rural industry has been treated by the Government in introducing this legislation in such a scant way in the dying days of a parliamentary session.


– It amuses someone who genuinely represents a rural electorate to hear the honourable member for Blaxland (Mr Keating) professing to represent in this House farmers and others. I hardly think that he has advanced his claim for the position for which he is trying tomorrow unless misrepresentation is the prime criteria for that position. He spent 7 minutes attacking the Government and the Minister for Primary Industry (Mr Sinclair) on their performance in relation to the agricultural industries. He chose deliberately to ignore the complete lack of concern for rural matters by his Government when it was in power from 1972 to 1974. We had a Prime Minister who told dairy farmers in Victoria at a time when the dairy industry was on its knees that they had never had it so good. This Government will be discussing legislation this week which deals with the dairy industry and attempts to rectify some of its problems. Mr Grassby and many other Labor supporters made promises about rural banks and so on. It will be this Government which provides a rural bank which will give adequate finance and allow some of the credit deficiencies of the rural sector to be rectified.

The marketing report of the Australian Wool Corporation was released in December 1973. It was held by the Labor Government for one year. Not one action was taken in respect of it. It is poor criticism on the pan of the honourable member for Blaxland to point out that action has not yet been taken by this Government. The Labor Government had 12 months in which to take action. No action whatsoever was taken. In relation to the Labor Government’s interest in the rural sector, for 6 months it did not touch or make any decision on 6 reports of the Industries Assistance Commission on rural industries. These included reports on brucellosis, new land farmers in Western Australia, the superphosphate bounty, the nitrogenous fertiliser bounty and income averaging for primary producers. They were all significant reports which had been tabled. For 6 months there was no action by the previous Government. If that is the concern for the rural industry that the honourable member for Blaxland professes, at least I can guarantee that this Government and this Minister take a much more serious and responsible attitude towards the rural industries.

The Bills which the House is discussing cognately aim to provide for the 5 per cent market support levy to be paid by growers for another 12 months. This scheme was introduced in September 1 974. It has been continued yearly thereafter. The market support fund provides a reserve financed by growers to meet any losses arising out of the floor price arrangements. The legislation has the full support of the Australian Wool Industry Conference and major grower organisations. In effect, it means that for the next 12 months there will be a levy on growers of 8 per cent, 5 per cent for the market support trust fund and 3 per cent for the research, promotion and administrative costs of the Australian Wool Corporation. The continuation of this tax requires consideration of several aspects. Firstly, we should consider whether a revolving fund should be established. By a revolving fund I visualise that when the total capital requirements are met- they are approaching that level at this stage- the growers who paid in the early years can be repaid from the contributions of later years. At the moment the market support trust fund is receiving some $50m a year in contributions from growers. The optimum total for any marketing scheme is estimated variously at between $250m and $350m. We are getting towards that total now. During the period that this levy has been operating growers have contributed, along with interest payments, a total of $158m. The total is rising rapidly. I think the introduction of a revolving fund would be of advantage. It would mean that as people left the industry their payments would be repaid to them. I feel that this would keep growers interested in the operations of the Corporation.

Secondly, the growth of the market support fund places in question the number of growers who should be representatives on the Australian Wool Corporation. Currently growers constitute four out of 9 members. My view is that, as the grower contribution to the market support trust fund increases, the grower representation on the Corporation should also increase. I think there is a logical and sound argument for this action to be taken in due course. I do not necessarily support the standardised forms of the Corporation’s structure which are now being proposed for the Australian Meat and Live-stock Corporation and which have previously been accepted in relation to the Apple and Pear Corporation. Admittedly, the Wool Corporation at this stage is functioning very soundly. I think my suggestion in respect of the Australian Wool Corporation will need consideration in the near future. Wool is a reasonably homogeneous commodity. Producers are not as geographically dispersed as meat producers. I have grave suspicions about the limitation of 4 grower members on the Australian Meat and Live-stock Corporation. I feel that this is a retrograde step. Four members can not adequately represent the wide spread interests and the geographical spread of the meat industry.

The honourable member for Blaxland, in commenting on the legislation now before the House, referred particularly to consideration of the marketing report of the Australian Wool Corporation. The Minister in his second reading speech on the Wool Industry Amendment Bill referred to approval of decisions by the Government to authorise the Australian Wool Corporation to operate a limited scheme of direct purchase of wool from growers. The object of this approval is to demonstrate new and improved methods of handling wool which may provide economies in the handling and distribution of wool. In my opinion the limited offer to purchase scheme is not a substitute for the full consideration of the Australian Wool Corporation’s marketing report which was brought down in

December 1973. 1 point out that the Labor Party did not act on that report in any respect in the 12 months after it was brought down. Any arrows it wishes to fire at this Government should similarly be directed at its own performance.

Mr Martyr:

– It did nothing.


-That is right. I admit quite freely that the Labor Party made one substantial and worthwhile introduction. That was the introduction of the wool floor price reserve scheme. Even though it did introduce that scheme, it almost destroyed it in mid- 1974 by trying to reduce the level from 250c per kilo clean to 200c per kilo clean. If ever there were a measure or a decision designed to wreck confidence in the wool industry for producers or users, it was that projected move by the Labor Government at that stage. I give the Labor Party credit for the introduction of the scheme; but I can give it no credit for the way in which it mismanaged the scheme whilst in power.

In contrast, this Government has made a firm decision in regard to the reserve price scheme. Not only has it indicated that the scheme will apply for one year only but there have been guarantees that the price will not be reduced in the following year. This has allowed much more stability to be given to the wool market. All sides and sectors of the wool industry now have more faith in the industry’s future. In fact this Government, after devaluation, fixed the guaranteed price at 284c per kilo clean on a whole clip average basis. It also indicated that this price would not be lowered for the next season. This is a very worthwhile move and it represents to the wool growers the full application of the 17 per cent devaluation. Subsequent prices after the revaluations have not been reduced in regard to the reserve price scheme. As far as wool growers are concerned, this has been a very worthwhile and satisfactory move.

I have already mentioned the limited offer to purchase scheme. I point out that this is purely a handling operation. In this way it cannot be a substitute for the full recommendation of the marketing report of the Australian Wool Marketing Corporation. The report goes much further. It suggests that wool should be marketed in such a way that it would be marketed as a textile fibre in effective competition in the world textile markets. This would aim at providing a better service to users. The report also envisagesthis is important- that there will be real savings in handling charges and so on. But it also envisages that the selling and distribution functions will be changed. To some extent this is not effectively tackled by the limited offer to purchase scheme. However, the growers and the Australian Wool Industry Conference, I feel, have somewhat reluctantly accepted the limited offer to purchase scheme mainly, as some say, because of the Government’s unwillingness to consider fully the marketing reports. My fear is that the situation may be a repetition of the disastrous price averaging plan of some years ago but I sincerely hope that this plan is much more effective than that.

The scale of the limited offer to purchase scheme is something that causes some concern. The size of the scheme could be much bigger. It will be limited to some 1 50 000 bales in one year. It is therefore an experiment in handling and that is all it can be considered. It cannot be considered a substitute for the marketing report which has more far-reaching implications for wool marketing and for the future of wool as a textile fibre. Whilst talking about handling and other arrangements, I should comment that despite the efforts of the Australian Wool Corporation and many other bodies, there is still a great deal to be done in this regard. I am alarmed when I see the number of grower cooperatives and so on which are instituting many far-reaching and effective reforms in regard to wool handling. I think of the operations of the Economic Wool Producers of some time ago and of the projected arrangements by Grazcos Co-op. Limited in relation to jumbo bales and many other handling innovations. In relation to wool harvesting I also think of the efforts of the Southern Districts Sheep Research Council in Western Australia which is putting up much of its own money to devise effective and improved means of wool harvesting. I think that that Council needs even more support than it is getting at this stage. It does alarm me to some extent that growers, through their co-operatives, are taking initiatives such as this and putting their own money at risk whereas a lot of money has been provided for research and promotion and so on.

My criticism of the limited offer to purchase scheme is made fully in the realisation of the very real benefits that this Government has brought to the wool industry. I shall cite a few of those benefits. I have already mentioned a stable floor price scheme for wool. This is in direct contrast to the performance of the Labor Party in regard to the level of the reserve price scheme. Not only have we ensured stability, ensured that the scheme will be continued for one year without the price being lowered, but we have also increased the floor price according to devaluation and other means. It is a much more real and pertinent scheme at this stage. Further, as I have pointed out, the price has been raised to take full account of the revaluations. I think this Government has done a very good job in supporting fully the operations of the Australian Wool Corporation in regard to its floor price operations and the operations of the flexible reserve price scheme.

There is one other thing to which we should refer when we are talking about wool and that is the fact that private buying is increasing largely throughout Australia. Traditionally it was restricted mainly to West Australia, but it has now spread much more widely. A significant proportion of the Australian wool clip is now being sold through this means. To some extent it may be a means by which growers are seeking to offset the cost of selling through the traditional auction system. But I think that it is cause for some worry, especially as many wool selling brokers are now involved in this private selling and buying operation. I think a number of questions have to be asked in relation to it. We should be asking just how much it does affect or undercut the auction selling scheme of wool and the option price of wool. We should also be looking at whether it has any significant effect on the reserve price operations of the Australian Wool Corporation. There have been reports of wool being sold overseas at prices much lower than the reserve price. Some of these reports may be valid. If they are valid, they give true cause for concern in regard to the undercutting of the official reserve price levels. This is a matter which, because of its growth and so on, cannot be swept under the carpet. We cannot pretend that it does not exist. It must be examined in detail and action taken on it if it is jeopardising either the auction price or the level of the reserve price. I end my contribution to this debate by endorsing the actions of the Government in introducing these Bills. I also endorse the speedy decisions that have been made by both the Minister and the Government in relation to the reserve price. I support the Bills.

Mr FitzPATRICK (Darling) (5.48)- I was very surprised to hear the honourable member for Canning (Mr Bungey) attack the honourable member for Blaxland (Mr Keating) on his ability in rural matters. It is a well known fact that the honourable member for Blaxland was a very successful share farmer before he entered Parliament. One of the reasons for his entering Parliament was the support he received from the several people in the rural industry. It is a wellknown fact that even though he is an expert on the minerals industry, he has also retained his interest in primary industry. His speeches are very much sought after.

I can remember when I first came into this Parliament in 1969. 1 had been approached by wool growers in my electorate asking me when the Labor Party was going to introduce a marketing system that would be worth while and beneficial to the wool growers or to primary industry. As a member with an electorate that depends to a large degree for its economic health on the wool industry, it is some satisfaction to know that this Government is bringing in machinery amendments to support the worthwhile legislation introduced by a Labor Government in September 1974. I am reminded by wool growers that such a scheme was sought by these people from the Liberal-Country Party governments for many years- in fact from 1949 to 1972, that long period when those Parties were in government. But unfortunately no such scheme was forthcoming. All the Liberal-Country Party governments could do in those early years was to produce a scheme called the emergency assistance for wool growers scheme. Everyone knows what a disaster that was. So I believe it was of some satisfaction to the wool growers when the Labor Government introduced a scheme that was to give them 250 cents for every kilo of 2 1 micron wool.

If one has to criticise this Bill today- although the honourable member for Blaxland speaking for this side of the House said we would not delay the legislation and I know the Minister wants to speak to it- he would have to be critical of the fact that the rate is to be at only the same level as it was last year. We all know that the inflationary effect since Labor first introduced this support program has meant that wool growers must be suffering a great deal because of the delay in the increase in the support level of the price of wool. I should like to conclude on those remarks because there are a lot of other problems in my electorate and it would take me a good deal longer than the time allotted to me to explain them all to the House.

Minister for Primary Industry · New England · NCP/NP

-in reply- I rise mainly because of a number of misstatements and misrepresentations by the honourable member for Blaxland (Mr Keating). Whilst it is true that we have a number of pieces of rural legislation before us at this stage of the parliamentary session, it is equally true that the legislation involving rural industry is in 3 groups. In regard to the wool industry we have 5 Wool Tax Amendment Bills and we have one Wool Industry Amendment Bill. The debate on the 6 Bills is over the whole embrace of those Bills and there is no significance in the fact that there are so many of them. In order to ensure their legality it is absolutely essential that they come in in separate form.

The honourable member for Blaxland seems to have a total misconception of a number of programs that have been under the Government’s attention. I think all wool growers are only too well aware that, substantially, the significant increase in the floor price of wool which has been achieved by this Government has enabled the present 33W per cent lift in average wool growers’ incomes in the course of this year and the lift of the average for the whole wool clip from 208 cents a kilogram clean when the Labor Administration when out of office to the present 284 cents. That of itself has been a positive Government step to enable protection of the wool industry and to help it to regain some of its past prosperity.

I want to refer to a couple of statements by the honourable member for Blaxland. He suggested that because there was to be no legislation on the limited offer to purchase scheme there might be some legal challenge. I assure the House that the limited offer to purchase scheme in no way depends upon legislation to be passed by this Parliament. The power to operate the limited offer to purchase scheme is already encompassed within the powers of the Australian Wool Corporation and ministerial consent has been given to the function of that scheme. So there is no suggestion of any legal challenge or of any delay. Rather there is a capability of the Australian Wool Corporation to operate effectively under that new extension of marketing proposals as from 1 July.

Another thing the honourable member for Blaxland suggested was that there would be some problems because of delay in the introduction of the freight rate provisions. That too is utter nonsense. Indeed, the Australian Wool Corporation has already entered into negotiations in the United Kingdom. The Corporation already has powers under its present legislation. However, there is talk of extending those powers but my colleague the Minister for Transport (Mr Nixon), in my view correctly, has said that he is determined not just to achieve lower freight rates for the wool industry but also to ensure that for every rural industry we maximise our negotiating advantage by ensuring that any one commodity is not disadvantaged as against any other in handling its particular crop, clip or product. So all future freight rates achieved within the rural sector will certainly be negotiated by the particular commodity organisation in conjunction with the Australian Shippers’ Council and finally with the sanction of the Minister for Transport. The purpose is not to narrow the power but to maximise the freight advantage. But it seems that the Australian Labor Party and in particular the honourable member for Blaxland do not comprehend that our objective is to achieve lower and more competitive freight rates wherever possible and to the best advantage of all agricultural industries.

There was a suggestion that because I have referred to wool research and promotion there is some delay in introducing the measure. In fact there have been quite extensive discussions on wool research and promotion by this Government with the Australian Wool Industry Conference, by myself with the Australian Wool Corporation and with the International Wool Secretariat. Arrangements have been entered into and indeed were announced by the Prime Minister (Mr Malcolm Fraser) at the opening of Wool House some months ago. The difficulty within the area of introducing this legislation is only that, in order to ensure that there should be adequate time for debate and to ensure that we do not rush unduly into measures which cannot be debated before the House rises, the funding shall be continued in a way in which it can be achieved either within the Advance to the Treasurer, if that should be necessary, or within existing legislation where that is possible until such stage as new legislation is introduced. I have said that the Government will continue to contribute jointly with wool growers in accordance with the present arrangements. There can be no doubt of that.

There was suggestion of some conflict between the Australian Wool Corporation and myself. Mr Maiden, the members of the Corporation and I have met on a number of occasions. Mr Maiden and I meet regularly. At no stage and in no instance has there been conflict. The Australian Wool Corporation has certainly said that it believes that where there is a currency adjustment there should be an adjustment in the wool reserve price. However, in the circumstances of the maintenance of the 284 cents a kilogram clean, I make no excuse to Australian wool growers for preserving a level which gives them a greater income and which has ensured a significant reduction in wool stocks held. The Australian Labor Party seems to be quite ignorant of the tremendous achievement by the Australian Wool Corporation this year. Not only did it achieve a tremendous lift in proceeds but also, significantly, it cleared a lot of wool that it held in stockpile. This wool is now out into the market place and as a result the industry is in a lot better position to face the future than it otherwise would have been. Those policies and the application of those policies come as a result of completely unanimous agreement between the Australian Wool Corporation and myself on the policies that have been necessary in each instance. The principle of future adjustments in relation to currency change is a matter that was not under question at the time of the last decision to maintain the 284 cents level. I commend the legislation to the Parliament.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

Bill (on motion Mr Sinclair) read a third time.


Second Readings

Consideration resumed from 26 May, on motion by Mr Sinclair:

That the Bills be now read a second time.

Question resolved in the affirmative.

Bills together read a second time.

Third Readings

Bills (on motion by Mr Sinclair) together read a third time.

Sitting suspended from 6 to 8 p.m.

page 2137


Second Reading

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

That the Bill be now read a second time.


-The Opposition opposes this Bill. It is part of what I can only describe as a sham, a continuing charade, to which the Government likes to refer as its new federalism policy. That policy is supposed to bring about a new spirit of harmony and cooperation in Federal-State relations; but, as we have seen from a number of telexes that have been sent to the Commonwealth Government today, it is a policy that threatens acrimony and distrust. Last year when the Government introduced the States (Personal Income Tax Sharing) Bill the Opposition moved for its withdrawal on the ground that it had objectionable features that had been incorporated against the wishes of the States. That amendment, which was moved during the second reading stage, was a wise one, as we have seen from the developments that have taken place since then. The Bill now before us compounds the follies of the sections of the original Act. Those follies gave rise to our original attitude. The Bill that we are debating tonight has been introduced contrary to the express wishes of the Premiers of the smaller States, as I will show as my speech progresses.

Before detailing the Opposition’s specific objections to this Bill, I want to make it known to those who have not had time to study it that the Bill contains an amendment to the original States (Personal Income Tax Sharing) Act. I want to make a few general comments about the income tax sharing arrangements that are at the heart of what 1 call this sham of new federalism. The Treasurer (Mr Lynch) made much in his second reading speech of the present financial position of the States. He suggested that the States were in a healthy financial position. I must admit that the relevance of the Budget positions of the States for less than three-quarters of last year- indeed, from my memory of the Treasurer’s second reading speech, it was for just two-thirds of the year, as I think he drew attention to figures for 8 months of the year- escapes me. Those of us who specialise in financial management know that one cannot look at a picture over 8 months and draw conclusions for the full year, because the revenue coming into a government is not even and the expenditure going out from it also is not even. So, it really was a red herring for the Treasurer to draw any conclusions from the Budget positions of the States over 8 months. But that is what he did in his second reading speech on this Bill. A true indication of the States’ positions can be ascertained only after the expenditure and revenue items for the whole year are considered.

Be that as it may let us look at the overall financial position of the States under the new federalism policy compared with what it would have been under the Labor Government’s formula that was operating prior to the new federalism policy taking over. Page 20 of the Budget Paper on payments to or for the States reveals that the new personal income tax sharing arrangements will give the States $3,7 16.2m in 1 976-77. That is an increase of only $89m over the $3,626.8m they would have received if the old formula had been applied. That takes no account of what are known as the above formula grants that were made so often under the old system. I am not talking about a system that obtained only under the Labor Government. I am referring to the system that obtained under previous Liberal-National Country Party governments as well. We all remember that during the financial year, particularly in April, there were additional Premiers Conferences and Loan Council meetings at which the States often were given ad hoc extra payments to help them with particular programs. So, one cannot look just at the annual appropriation to or for the States under the new federalism formula and compare it with what the States would have received under the old formula. One has to make a study of just what would go to the States not only under the new federalism formula but also in the above formula grants.

As I have said, this new arrangement takes no account of those above formula grants. Indeed, if one gives proper consideration to what was being paid to the States previously one will find that in general revenue appropriations very little more is going to the States now under the new federalism policy than was previously the case. But that is only part of the story, because what also goes to the States- this was especially so in the time of the Labor Government- are what are known as specific purpose grants. They have been cut drastically under this Government. The long and short of it is that the amount that is going to the States is very much less now than it was prior to this Government coming to office. Overall, the States are very much worse off under the new federalism policy than they were previously. That has resulted in the States being forced to increase their charges, which increases have been fed into the consumer price index, compounding our economic problems. Mr Deputy Speaker, from the experience you have had in this House you would know that the feeding of these increases into the consumer price index, particular at a time of wage indexation, has meant all sons of compounding problems.

Of course, when one examines the funds that are being made available to the States for capital purposes one finds the real effect that the new federalism policy is having on the States and, indeed on the economy at large. In the 1976-77 financial year the total general purpose capital funds to the States were 5 per cent above the 1975- 76 level in money terms, which represents a decrease in real terms of almost 10 per cent. When one is confronted with figures such as those it is easy for one to see what the new federalism policy is doing to our country. It is simply a device for cutting back the funds available to the public sector. Consequently, in the present economic situation it is a device for causing substantial rises in unemployment.

For all the shifting that went on during question time today and last Thursday on the part of the Minister for Construction (Mr McLeay), we have found that he has been properly put in his place by his own political colleagues. It has been pointed out to him so clearly that the construction industry in this country is on its knees at the moment and that there is enormous capacity in that industry. Its plight is so much due to the fact that this Government is not making available funds from the public sector not only for employment in the public sector but also for employment in the private sector, because the private sector relies so heavily on contracts with the public sector for the necessary employment opportunities to be created. When we look at the causes of the record unemployment that exists in this country at present we must look to measures such as the so-called new federalism policy as a cause of that unemployment.

Let me turn my attention to the specific purposes of this Bill. The Bill empowers the Treasury to refer the question of State relativities to the Grants Commission and provides some guidelines to the Grants Commission. The basic problem of the proposition contained in the Bill is that it runs directly counter to the expressed wishes of the States. If we go back to the arrangements for stage 1 of new federalism as outlined in the Budget document entitled Payments to or for the States and Local Government Authorities 1976- 77we find that point ( 1 7) states:

There will be a periodic review of relativities between all States, advice in relation to this review being sought from an independent review body . . .

Point (35) further mentions a review of the taxation sharing arrangements as a whole and in part states: . . arrangements will be made for the Commonwealth and State governments to agree, well in advance of the review, on the procedures which are to be followed in connection with it.

Let me just repeat that the promises relating to new federalism made in the Budget Papers and in subsequent documents were that the Commonwealth and State governments would agree well in advance of the review on the procedures which are to be followed. On page 1 9 of the same

Budget paper a reference is made to point (17) of the stage 1 arrangements in the following terms:

One matter still to be settled is whether the independent review body should be the Grants Commission or some other body.

It is obvious in the document from which I have quoted that the Commonwealth had led the States to believe that the independent review body did not have to be the Grants Commission. The Commonwealth promised to reach agreement with the States. It has obviously not done so. We learned that from this Bill. We learned that, as I will show as my speech progresses more and more, from the reactions of the 4 smaller States to what has gone on and what is proposed in this Bill.

Perusal of the Premiers Conference transcripts which have become available demonstrate the reservations 2 States had about the Grants Commission. The Prime Minister (Mr Malcolm Fraser) promised to reach what he called an amalgam of State and Commonwealth views. He is obviously determined that the undertaking should be ignored. The Commonwealth has arbitrarily imposed its will on the States. Yet we hear noises from Government supporters, particularly the noisy ones, suggesting that it is a States’ rights measure vis-a-vis some mythical centralist policy that exists elsewhere. This is the mouthing of sheer nonsense which so often emanates from the other side of the House.

Let me repeat: This Bill goes against any such States’ rights philosophy. I am not going to suggest that I will expound in such simple terms States’ rightism versus centralism because I want to show that I have looked at these things in a rather deeper form than just mouthing those shibboleths. I am going to throw at Government supporters the charge that they are the ones who mouth these meaningless phrases, and yet they come up with propositions such as the one we are now debating which do not go one inch of the way towards fulfilling their promises.

The Bill was introduced without consultation with the States. It is obviously to the detriment of the smaller States. I know now that several Premiers attempted today to get the Government to withdraw this Bill. The States’ Opposition to this Bill is simple and quite straightforward. The States do not wish the body that hears their appeals when they claim to be disadvantaged by relativity decisions also to determine those relativities. Let me repeat that because I do not think it is understood by some Government supporters in the House at the moment. The States do not want the body that hears their appeals as to whether they are to be claimant States-that body hal traditionally been the Commonwealth Grants Commission- to be the one which decides the relativities which give rise to their particular claims. Obviously if the relativities are unfair and the State of, say, Tasmania wants to go to the Grants Commission to get more funds, it will be appealing against a decision which has already been made by that same body. How many people or bodies in our community want to change the decisions that they have already made? It is, as one Premier stated in a letter, a case of Caesar appealing to Caesar.

Mr Cotter:

– Nonsense.


-It is interesting to hear the honourable member for Kalgoorlie say that what I am saying is nonsense, because I will quote what his own Premier had to say as recently as today on the same subject I look forward to the honourable member still being in the House when I quote Sir Charles Court to him in just one moment.

The opposition of the smaller States is quite understandable. I repeat: For the Grants Commission to uphold their appeals as claimant States it would virtually have to admit that it had made an error in originally determining the relativities. I do not even have to quote what has gone on today from the telexes that have shot around this country. Let me quote from the Premiers Conference when the position was made clear by the Premiers of the smaller States who were, I might add, supported by the Premier of New South Wales. The Premier of South Australia said:

The purpose of the Grants Commission is to look at a disability grant on the basis of an application by a State which considers that it is under a disability. It has established a long tradition or mode of dealing with applications of that kind. It is quite different really from a review of the present distribution of basic financial assistance grants between the States. I believe we ought to keep them separate and we ought not to be trying to read in some appeal from Caesar to Caesar.

At the Premiers Conference the Premier of Western Australia pinpointed the problem of asking the Grants Commission to review its own decisions when he said:

If a State seeks to become a claimant State, and if that decision is accepted by this meeting you are put in the position of going back to exactly the same people to try to convince them that they made a mistake. Human nature being what it is, people usually do not admit to mistakes.

The States’ position is clear and defensible. The Commonwealth on the other hand seems simply bent on removing the concept of a claimant State. Despite the attitudes expressed by the

States at the Premiers Conference and the promises of further consultation the Federal Government has moved unilaterally to impose its own will on the States. I use the word ‘unilaterally’ advisedly because from what I hear Mr BjelkePetersen, the Premier of Queensland, is pointing this out in no uncertain terms. I had the benefit of being briefed on his view of this matter and I say for the benefit of the honourable member for Leichhardt (Mr Thomson), who is present in the House, that the Premier from his own party is equally against this measure as indeed are the Liberal Premier of Western Australia and the Labor Premiers of South Australia and Tasmania. So much for the co-operative nature of the new federalism.

The States have gone as far as actually proposing how an independent body to review relativities should be constituted. They suggested a body consisting of a chairman nominated by the Commonwealth, 2 members with practical experience in government finance to be nominated by the States and a member of the Grants Commission to be proposed by the Commonwealth after consultation with the State governments. It is only today that I learned the details of the alternative body proposed by the States. I was very gratified to see that the States were suggesting that a member of the Grants Commission should be a member of that alternative body of four to decide on the relativities. The Federal Government has not adequately explained why it rejects such a body. All the Treasurer has told us in his second reading speech to this Bill is that his Government does not accept the proposition or the arguments put forward by the States. But he did not outline what those arguments were nor, more particularly, did he give us a detailed exposition of why he disagreed with those arguments. It is difficult to take seriously the Treasurer’s contention that setting up a new body would be wasteful duplication now that we know that that body would be built on the Grants Commission. I venture to say that not only would one of the 4 representatives be a member of the Grants Commission but also the body should and could and would use all the information available to the Grants Commission.

I can see no reason why the Grants Commission could not act as a secretariat for that body. In my view it would not be a costly separate body to set up. After all, the Fraser Government has proposed the setting up of 6 State grants commissions to administer funds to local governments. This proposition of merely setting up this small committee of four would be far less wasteful than the previous proposition which unfortunately this House has already adopted of 6 separate State grants commissions in addition to the already existing Commonwealth Grants Commission. In relation to 7 State grants commissions, it is hardly an excuse for a Treasurer who is so responsible to say that it was a matter of costs which prevented him accepting the proposal of the majority if not the totality of the States that there should be this committee of four to determine the relativities between the States.

The fears expressed today by the Premiers of the smaller States certainly have substance. Premiers Neilson of Tasmania, Bjelke-Petersen of Queensland, Sir Charles Court of Western Australia and Mr Don Dunstan of South Australia whose views cross the political spectrum have all had something to say on this subject today. They do not want the situation where Caesar is appealing to Caesar. They want the Grants Commission to be the body to continue with its present task. They want it to be the body to which they appeal when they want to become a claimant State. They do not want to be appealing against the Grants Commission’s own previous decision when they decide they want to be a claimant State. Another small body, as I have said, with perhaps the Grants Commission acting as its secretariat and providing a lot of information could easily fulfil that function. It is generally accepted that Western Australia would be significantly worse off than it is now if there were a straight relativity arrangement. Tasmania and South Australia would no doubt lose the temporary benefits which those States now enjoy because of good management of their railways agreements. This would be the case unless specific guidelines are put in the review reference.

It is difficult to imagine this Government, for political reasons, overturning a recommendation from the Grants Commission penalising the smaller States for such agreements as the railways agreements, even though the Treasurer suggests in his second reading speech that such an event would be possible. However, given the lengths to which this Government has gone in an attempt to renege on the railways agreements, makes such an event highly doubtful and improbable. The Fraser Government wants to penalise the governments of South Australia and Tasmania. I have already referred to the fact that, by interjection, the Liberal Party member for Kalgoorlie (Mr Cotter) suggested he did not want to support his small State in the matter which is before it. He would be going against the wishes of the Premier, Sir Charles Court. I have already mentioned the honourable member for

Leichhardt (Mr Thomson) in Queensland. I hope that the honourable member for Denison (Mr Hodgman) will not be seen to be against the wishes and the benefits of the vast majority of Tasmanians by suggesting that he will support this Bill.

We have reached the point where the Federal Government has introduced a piece of legislation which vitally affects the States and which has been rejected by four of them. If there is any truth in the assertion that the Senate is a States ‘ House, now is the time for it to act. I understand that the Premiers of the States opposing this Bill have asked for the support of their senators. At the moment it would appear that the only prospect of the small States not being saddled with something they regard as severely disadvantaging them is for their senators to act as State senators rather than as party representatives. So we will see how true some of them are to the lip service they pay to the Senate being a States’ House. For the constitutionally minded senators it is worth recalling that it requires the opposition of only 3 States to defeat a referendum proposal. In the case of this Bill it would require the opposition of only 4 Government senators from one State, or one Government senator from each of 4 States, for a proposition such as that contained in this Bill to be defeated.

The Bill may be a small one but it is important. We of the Opposition have not had long to study it. I must confess that my main opposition to it is that it is part of that sham which is called new federalism. But I have had long enough to study the opposition of 4 States and the telexes which have come from their Premiers. I shall quote from a telex. I have an example here from Sir Charles Court and it is now on public record. It states:

I have sent a telex to the Acting Prime Minister, Mr Anthony, asking that the legislation on tax sharing be postponed until the Commonwealth proposals can be discussed at the next Premiers Conference on July 1.

I have expressed my disappointment to the Prime Minister that the Commonwealth has made a unilateral decision on the appointment of the Grants Commission to carry out the review of stage one tax sharing entitlements.

That is an example of the views of the Premiers. I could quote from a joint statement by the Premiers of South Australia and Tasmania on exactly the same subject. I have also had the advantage of being briefed on the views of the Premier of Queensland on this subject. We know enough about this Bill, even though I have not yet had time to take it to the Party room leave alone study it for the length of time I would normally like, to know that it certainly could be delayed. The best means we can use are to oppose the Bill at this stage to show our objection to it. This concept should put to rest for ever the deception of the Fraser Government that it is a States’ rights government. Of course this Bill shows that stand to be nonsense. It shows it to be the sham that it is, just as the whole concept of new federalism is a sham. I repeat that the Opposition is opposing the Bill in this House. After more consideration it is more than likely that Australian Labor Party senators will move appropriate amendments if and when this Bill reaches the Senate. However, I still hope that consideration of the Bill will be adjourned while the views of the States are taken into consideration. In the meantime I announce the Opposition’s decision to oppose the Bill.


-We have just heard the honourable member for Adelaide (Mr Hurford) huff and puff about the States (Personal Income Tax Snaring) Amendment Bill. He suggested that members of the Government Parties want to see one or other of the States disadvantaged. What members of the Government Parties want, and what the Government desires, is to ensure that all States are fairly treated; that they are treated with equity and reasonableness. The aim of this legislation is to ensure that the proportion of the income tax available to the States is shared in a manner which enables each State Government to provide services for the people of its State at a standard not appreciably different from the standard of government services provided by any other State. If we get to a situation where one State, due to changing circumstances, finds itself relatively advantaged and another State relatively disadvantaged, we in the Government Parties believe that there should be an adjustment to ensure that all Australians are able to experience the same level of government services, provided of course that the State governments make the same or appropriate efforts to achieve those standards.

The suggestion by the honourable member for Adelaide that this matter had not been discussed with the Premiers is false. It has been discussed at at least three and perhaps four Premiers Conferences. Indeed, the Premiers have all agreed that there should be periodic reviews of the relativities between all the States. Yet, listening to the honourable member for Adelaide, one would get the impression that the Premiers were opposed to a review of the relativities. So weak was the honourable member’s argument that he had to fabricate differences between the Commonwealth Government, the Prime Minister and the Premiers. The Premiers made it quite clear at several Premiers Conferences, and at the last one in particular, that they agreed that there should be periodic reviews of relativities and that those reviews should be designed to achieve a distribution of the income tax revenues to the States in order that each State Government could provide a level of service to its people equal to that which could be provided by other States.

The only matter upon which there was some difference of opinion between the Premiers and the Prime Minister was the body which should determine the relativities. The Government reached the conclusion that a decision had to be made. It therefore decided that the highly reputable body known as the Commonwealth Grants Commission should be given the authority to report to the Premiers Conference as to any adjustments that should be made to the relativities. The honourable member for Adelaide again came out with the argument that we were putting it to the Grants Commission in a manner which would result in there being an appeal from Caesar unto Caesar. What nonsense! The Grants Commission is merely to be given the responsibility of making recommendations to the Premiers Conference. The Premiers can then consider those recommendations and, if they are of the opinion that the views expressed in the report of the Grants Commission are inappropriate, they can at that time make suitable decisions. But I believe they will find that the experience, the integrity, the expertise of the Grants Commission is such that the recommendations made by the Grants Commission for adjustment to the relativities will be so compelling that they will find it necessary to adopt those recommendations.

The right of the 4 less populous States to make applications to the Grants Commission between the quinquennial reviews of relativities as between the States is to be preserved. To listen to the honourable member for Adelaide, one would imagine that once relativities were adjusted they would necessarily apply for all time. But honourable members on this side of the House recognise that a growing and developing community is dynamic. There is a change in the ability of one area, one region, one State compared with another area or region or State in the way in which it can provide services to its people due to changing circumstances.

Mr Hodgman:

– He does not understand.


– He does not understand at all that one State can at the time of review have discovered no minerals, no oil reserves, and yet within that period can bring on stream huge royalty revenues as a result of discoveries made in the meantime. If we are to achieve the objective of standards of a similar level in each of the

States there will be occasion for adjustment between the major quinquennial reviews, and the smaller or less populous States will still have the right to make application to the Grants Commission. I do not think there is a small or less populous State which has ever questioned the capacity of the Grants Commission to bring down fair and equitable reports in relation to those applications. The responsibility to be given to the Grants Commission is, as the Minister said in his second reading speech, a natural extension of the work that is now undertaken by the Commission. It has developed a methodology for making these reports, and that experience and expertise should be drawn on yet again. The use of the Commission avoids unnecessary duplication in any way, and I again draw to the attention of the House the fact that the reports to be made by the Commission are advisory. It is for the Premiers and the Prime Minister in the ultimate to make a decision as to whether or not a report made at any one time will be accepted.

Under the tax sharing arrangements made by the Government with the States, income tax is now shared between 3 spheres of government. Under the States (Personal Income Tax Sharing) Act, which this Bill seeks to amend, the States receive 33.6 per cent, or 33.6c in every dollar, of all personal income tax paid by wage and salary earners and other taxpayers. Under the Local Government (Personal Income Tax Sharing) Act 1976 the third sphere of government, local government, receives 1.52 per cent of all personal income tax collections. The balance of 64.88 per cent, or nearly 65c in every dollar, is left for the use of the Commonwealth in discharging its responsibilities. In addition to providing the States with 33.6 per cent and local government with 1.52 per cent of all income tax, those 2 Acts do a number of other things. Firstly, they prescribe the proportions in which each of the entitlements shall be made to the States, on the one hand for State government purposes and on the other hand for local government purposes. Secondly, they provide for the review of the distribution as between the States.

Under the Act relating to local government, the Minister responsible for the Act is required to refer the question of the relationship of the shares of local government in each of the States to the Grants Commission for inquiry and report. However, the Act gives no direction as to the criteria the Grants Commission is to apply in determining the interstate relativities. It is to be noted that the States are required by the Act, that is, the Act making available 1.52 per cent of income tax for local government, to distribute 30 per cent of that on a population basis. The per capita distribution can be weighted on account of the size of population, the size of the area, the population density, and the area of local government bodies receiving the grants. The balance must be allocated on general equalisation principles, and it is important that we should look at those principles. They are spelt out in the legislation and require that local government bodies have the money distributed to them so that each body within the State can provide in its local government area a standard of local government services similar to the level of services provided by other local government bodies within that State. The legislation provides the governments of the Commonwealth and the States with an excellent opportunity, firstly to increase the tax base or revenue jurisdiction of local government as a whole, and secondly to ensure so far as practicable that each local governing body within a State is able to function by reasonable effort at a standard not appreciably below the other local governing bodies within the State.

In a recent review of the interstate relativities of the distribution of that portion of the income tax available to local government, there was considerable discussion as to whether the Grants Commission should make recommendations in accordance with equalisation principles or on a basis more akin to a per capita distribution. I urge the Government to give consideration to the amendment of section 12 of the Local Government (Personal Income Tax Sharing) Act in order to include in it a provision with a purpose similar to that proposed in the present Bill in respect of the distribution of the States’ share of income tax.

This Bill will amend the States (Personal Income Tax Sharing) Act in 2 principal respects. Firstly, it will enable the Minister to refer to the Commonwealth Grants Commission for inquiry and report on the desirability of the change in the interstate relativities in the distribution of the 33.6 per cent of income tax now ear marked for use by the States. Previously, that power was vested in the Minister in respect of the distribution of the local government share of personal income tax. It was not available to the Minister in respect of the States’ share of income tax. So in that respect, the 2 Acts after this Bill has passed this House and another place, will be similar.

Secondly, this Bill prescribes something which is not contained within the Local Government (Personal Income Tax Sharing) Act, something which I believe should be in that Act. This Bill provides that in the case of a report being called for from the Commonwealth Grants Commission in respect of the distribution of the States’ share of income tax, the Commission shall make its report adopting certain criteria. The Bill prescribes the criteria to be used by the Grants Commission in conducting its inquiry. The amendment makes explicit the Government’s objective, namely, to ensure that the payments to the several States shall enable each State: to provide without imposing taxes and charges at levels appreciably different from the level of taxes and charges imposed in other states, government services at standards not appreciably different from the standards of the goverment services provided by other states.

The Government should be just as explicit in regard to the objectives it has in mind in allocating the share of income tax available to local government.

Existing legislation is aimed at ensuring that each local government body within a State is able to function by reasonable effort at a standard not appreciably below the standards of other local government bodies within the State. It should go further and require the Commonwealth Grants Commission to distribute local government’s share of income tax as between the States so as to ensure that local government bodies within one State are able to function by reasonable effort at a standard not appreciably below the standard of local government bodies in another State. In reporting as to how this might be better achieved through changes in the distribution of the State by State local government sharing of income tax, account should be taken of the different capacities of local government in each of the States to raise revenues. Account should also be taken of the differences in the amount required to be expended by local government in each of the States to provide comparable services. The dollar value in one municipality differs from the dollar value in another. It is more expensive to build a community infrastructure in the north west of Western Australia than it is in some of the major cities to the south and in the east. Likewise, there are some circumstances in which municipalities within cities find that a dollar spent on a particular project does not go as far as if that same dollar were spent on a similar project in an outer urban suburb.

An alternative approach would be to amend further the legislation which is being amended by this Bill so as to require the Grants Commission in assessing the relativities as between the States to bring into account under its definition of government services those services normally performed by the States and those normally performed by local government within the State in order that under the tax sharing arrangements as between the States there are proper relativities drawn to enable the States to ensure that their local government bodies are able to provide similar services to those available in other States. If this is not done, there is a danger that some States will be considerably disadvantaged by the Grants Commission’s failing to take proper account of the disabilities that a particular State might have with respect to the provision of those services normally provided by local government.

If one of the approaches that I have outlined be not adopted, this disadvantage to a State could have serious consequences over the years ahead. A State with a limited capacity to raise revenue or a State which is faced with relatively higher costs in providing comparable services may now be able to provide only State and local government services at standards similar to those provided by other States because the share which it now receives, a share determined by past history, is sufficient to enable it so to support its local government authorities that its State right functions and its local government right functions can be provided at a standard similar to that provided in other States. I therefore urge the Minister, when reviewing this legislation in the future or when reviewing the local government personal income tax legislation, to ensure that a similar provision is included in the local government legislation to make certain that the Grants Commission takes account of the need to equalise the local government operations within one State with the local government operations within another State. Otherwise we will find that there is a severe disadvantage potentially imposed upon certain States.

I want to conclude by saying that the Grants Commission is the most effective body to determine the allocations as between the States. If it were left to the haggling at the Premiers Conferences, the Premiers could manipulate the system by reducing the proportion available to one State in the knowledge that it could then come back for supplementary assistance under the existing Grants Commission arrangements. It is essential that the relativities between the States be determined by an independent authority. The best independent authority, the authority with the standing within the community, the one that has been accepted over a number of years, is the Commonwealth Grants Commission.


-I support the views which were put forward so explicitly and clearly by the honourable member for Adelaide (Mr Hurford) on behalf of the Opposition. The comments I want to make will be somewhat shorter but I hope equally relevant. The casual observer of the comments from the Government side on this so called new federalism, which is really a fix in federal financial arrangements in relation to the States and local government, could be excused for being led into the belief, quite wrongly, that a new era had arrived in which the financial needs of States and local government would no longer be a matter of stress and concern for them, and for believing that we had an abundantly beneficent and generous Federal Government. That sort of propaganda, if restrictive trade practices legislation provisions covering false and misleading advertising extended to politics, would lead to quite severe action against the Government. It is on a par with the sort of cheap and misleading claims of the soap manufacturer who said whiter than white’.

Let us look at some of the meretricious qualities of the so called new federalism. As one listens to the comments of Government spokesmen, one is left with the vague impression, if one has not followed the development of this program, that the States and local government- I am dealing with the States first- have been put on a sound footing financially and that this magic figure of 33.6 per cent of personal income tax is some firm substitute, in equivalent terms, for the total financial allocations that have gone to the States in the past. That is nonsense. To the extent that it is put forward by Government spokesmen knowing it is nonsense, it is dishonest. To the greater extent that it is put forward by Government spokesmen who do not understand the issues, it is unfortunate. However, they are misleading the public, no matter how great their innocence or ignorance may be. The fact is that 33.6 per cent of net personal income tax in 1976-77 is equivalent in rounded terms to $3,700m. That is considerably short of the total allocation which went to the States in that year. The total allocation which went to the States in that year was about $8,388m. That covered general revenue funds, general purpose capital funds, specific purpose payments, recurrent funds and specific purpose payments capital funds. They came to the total I have just quoted.

So, effectively what we are talking about is only 45 per cent of that very large amount of money being provided to the States. The arrangement which has been put forward by the Government allows the Government to wriggle its way out of fiscal responsibility in the community. I put to one side my great concern about the problems which conceivably will arise in the medium and longer term in economic management with this fragmentation of fiscal control in the economy. I also put to one side for a few moments my concern at the disadvantages which will afflict the less populous States. In case this is thought to be a mere debating point from a prejudiced political position, I remind honourable members that not only is that point taken by the Labor Premiers but it is taken very forcibly by the former Treasurer of Queensland, Sir Gordon Chalk, who has made no bones about his qualms about what will happen to a State such as Queensland and the disadvantages which will flow from that.

Let us look at the sorts of things that could happen. The States are concerned that the Australian Government, over a period of time, in real terms, not in money terms- there can be a growth in money terms and a significant contraction in real terms in the allocation of financeswill seek to disengage itself to some substantial extent from commitments for specific purpose payments of a recurrent and capital nature. To the extent that that happens there will be a greater obligation on the States to fill up the real money shortfall. If they are to maintain services at an adequate standard they will have no choice. I do not suggest for a moment that this will be the outcome. I do not believe that anyone can suggest what the ultimate outcome will be under this so-called new federalism. Certainly I doubt that the Prime Minister (Mr Malcolm Fraser) can and even more that the Treasurer (Mr Lynch), who is as dim and unsteady as a candle on a windswept plain on most matters of economics, can.

Let us assume that there is a withdrawal of specific purpose payments, both capital and recurrent, which seems to be the genuine concern of the Premier of New South Wales. If we accept that there are about 6 million taxpayers in Australia, then we are talking about an average tax payment per taxpayer throughout the States of $12 a week. That is a rough figure, but it is adequate for the purpose of illustrating this point. The Australian Government, on the other hand, by increasing its rate of tax collections at a slower rate than that which would be necessary to maintain the level of finances for the States, and at the same time involving itself to a greater degree in earmarked taxation collections, such as the Medibank tax- I do not believe that anyone who is sensibly informed accepts for a second that a Medibank levy is other than a masked tax, the purpose of which is to increase general revenue collections for the Australian Government while at the same time allowing the opportunity to exclude the States from sharing in that additional revenue under the new tax arrangements- can increase at a faster rate the financing of its own projects and reduce at a substantial rate- I am talking in real terms now- the amount of money allocated to the States, thus forcing the States to increase at a faster rate again the amount of money which they require through this new taxation arrangements which comes with stage 3 of so-called new federalism. The total effect conceivably would be a far greater total tax burden on the Australian community. This seems to me to be the whole purpose behind the so-called new federalism.

It is the intention of the Australian Government to disadvantage the States over the medium to longer term. So let us have none of this nonsense that the States have done well under the present Government. They have done poorly relatively. The rate of increase in total finances available to the States was wound back dramatically in the last Budget. Let me quote from the official document Payments to or for the States and Local Government Authorities 1976-77. Payments to the States, covering general revenue funds, general purpose capital funds, specific purpose payments recurrent funds and specific purpose payments capital funds, in 1974-75 totalled $5,826m. They increased by nearly $ 1,870m or 32 per cent in the following year, to $7,695m, under our Government. However, in the next year, 1976-77, in the first conservative coalition government Budget, the increase was only $693m, to $8,388m- an increase of only 9 per cent. An increase of only 9 per cent in a year when inflation is expected to increase by between 14 per cent and 15 per cent clearly means that in real terms the States have been disadvantaged; they have had the real funds available to them reduced.

Of course, this is quite evident in the level of activity which the States have been able to undertake not only in crucial areas of the economy but also in crucial areas or regions of the States. They have been forced to contract much of the work they have undertaken. This is especially true in capital construction works, broadly defined. This is neither in the best interests of the nation, which needs an adequate development of its social infrastructure-there has been too much neglect in the past of the social capital needs of the Australian community- nor in the best interests of workers, too many of whom are unemployed at present, or of private enterprise, of which a great proportion in the construction sector depends on government spending for the level of activity it is able to maintain for its prosperity and success. So we see already, in the first Budget of the conservative coalition parties, a dramatic winddown in the level of finance made available to the State governments. In real terms there has been a reduction, a contraction, under what was really the first stage of new federalism. It has not been heralded or acknowledged by the Government, but it was the first stage. From it we obtain the evidence of the intent of the conservative coalition parties in the future under this so-called new federalism.

It is the Government’s wish to make things tougher for the States. Having had to deal with the States, I confess, as I confessed on one previous occasion, that I am not without some sympathy for the need for some discipline on them. Irrespective of their political colour, they can be awfully difficult people. But that does not justify the sort of motive which is inspiring the Government in this matter. More especially, it does not justify the ulterior objective of the Government, namely, to increase the real rate of expenditure it can undertake while reducing the real level of funds it provides for the States by using the devices I have mentioned, thereby not only forcing the States to raise substantial personal tax themselves but also producing a substantial increase in the total tax paid by the Australian community. That is what it is all about. The Government is depending upon confusion and complexity to mislead the people of Australia into believing that this is a particularly generous and simple program. It is not. It is a trap for the community as it is a trap for the States. Even the Premier of” Queensland has recognised that. He is a spell child of Australian politics. It took him several months longer than any other State Premier to realise it.

I move on to local government. Much has been asserted by Government spokesmen about the generosity of allocations to local government. But what I said about the meanness, the winding down in the allocation of funds to the States also applies here. The relevant figure is the total amount of money going to local government this financial year against the previous financial year. In 1975-76 for instance- these figures are from the same official source to which I referred a minute ago- the total amount allocated to local government by the last Labor Government in its last year of office exceeded $2 74m. That was an increase of $94m or 52 per cent over the previous year. Even allowing for inflation that was a particularly handsome increase in the allocation of funds to local government. In the current financial year the allocation fell to $ 1 95 m. That was a reduction of about $79m or 29 per cent over the previous year. If we allow for the effects of inflation, we are talking about a real reduction in the allocation of funds to local government from the Austraiian Government of somewhere near 34 per cent. No wonder there is a severe contraction in the Australian economy at the moment. Two of the most significant and important spenders in the economy whose spending is particularly appropriate at a time of recession- State government and local government, as well as the Australian Government, but this Bill deals with State government and local government- have cut back substantially their real spending.

Quite clearly, the cut backs have been in important areas. The national sewerage program is, in real terms, decimated. Spending on roads and communications has been severely cut back in real terms. This is true all the way through the capital expenditure items. The result is that the country is in the painful, vice-like grip of the excessively austere measures being adopted by the Government. I repeat that in spite of the fact that the amount of money directly allocated from the Australian Government as a grant through the States to local government has increased to $140m this year, the more significant total is the amount of money allocated by the Australian Government to local government. That has been dramatically reduced. I shall take up the point worrying the State Premiers and refer to the concern of the New South Wales Premier. Let us assume that the Australian Government over a period unwinds from specific purpose payments to the States to the total extent that it provides that money in current terms- some $4,000m. I am not suggesting that that will happen next year, the year after or, indeed, at all. I repeat that I do not think anyone knows, least of all the Government and most of all the Treasurer.

But for the purposes of illustration let us use this example. Certainly the New South Wales Premier is feeling concern on this point. The $140m which has been provided to local government this year is about 1.5 per cent of personal taxation collections. If we are to reduce the need for, say, personal taxation collections by the amount in allocations to, say, government other than the Federal Government by something like $4,000m- we are talking about a substantial reduction in real terms- we reduce the need to raise personal taxes or revenue from other sources. Let us stick to this one area to illustrate the point. We are talking about a figure of 1.5 per cent- that is the percentage amount about which the Government is talking- of a vastly reduced amount of tax revenue raising. We are not talking about $140m. We are talking about only $60m. The figures are quoted to illustrate the point. To the extent that the Government reduces the need for it to raise this revenue, the fixed percentage becomes meaningless. That is the whole purpose behind what the Government has in mind, to disadvantage the State governments and local government, not through any perversity towards them but because it has this irresponsible attitude towards the role of the central government in funding the adequate functioning of other arms of government in the Australian community.

The figures I have quoted are for the purposes of illustration. They may well prove, and undoubtedly will prove, that the amount of money being raised by tax gathering increases in money terms but the rate of increases in real terms could be far lower than the rate of increase of the financial needs of the States and local government. That is what this whole exercise is about. It is a meretricious deception to mislead the Australian public. It was presented in the hope of deluding State Premiers. It has been broadcast in the expectation that local government will believe that it will be better treated as a result of this tart-like formula that has been presented. None of these things will be achieved. It is purely a formula to allow the Australian Government to shirk its major responsibilities in adequately funding the functioning of the other arms of government. It becomes meaningless to talk as we so often do on all sides of the Parliament and outside in the community, acknowledging in the course of our expressed views that the most important arm of government is local government. That is where the facilities are provided which determine the comfort and quality of our daily environmental living standard. It becomes meaningless when the amounts of money to local government are being cut back. It becomes a cruel deception when a formula is being worked out and local government is being encouraged to believe that it will get a fixed percentage of a level of real finances which will not diminish.

It is clear that that is not the purpose of the Government. In fact, the Government intends to create a situation in which it will slide out from underneath the responsibility of maintaining an adequate level of funding for these 2 arms of government. This is why Premiers, not only Labor Premiers but also non-Labor Premiers, are expressing the strongest opposition to these proposals. They know full well that the people in their States will end up worse off and pay much more tax. Local government will have to realise that this formula is just a slick device for the Australian Government to slide out from underneath its responsibilities. In real terms, over the longer term it will leave local government worse off than it was in 1975-76 as, indeed, it is worse off in 1 976-77 in real terms as against the earlier year.


-We have just listened to the most incredible speech from the honourable member for Oxley (Mr Hayden). Notwithstanding the fact that he is an undisguised centralist, with the greatest of respect to him he has just purveyed some of the greatest nonsense that has been heard in this chamber for many years. The honourable member for Oxley is, of course, the pretender to the throne. He has an appointment tomorrow morning and he no doubt anticipated that this would be his final speech to sway a few wavering members to support him. His speech tonight was what one would expect from someone who is drifting very badly in the market, someone who has drifted from short odds to about seven to two. I suggest that the honourable member for Oxley would have been a far better policeman than he has been a politician. When he returns to civilian life at the next election in 1978 he will be a far better barrister than he has been a politician.

It is not fair for the honourable member for Oxley to stand here as though he is talking in a vacuum, living on cloud nine. He might be able to fool Caucus members and dazzle them with science. But he cannot fool the people of Australia by purveying nonsense about economic matters of considerable importance remembering that he, in his own small way, would have to qualify for the title of one of the greatest economic vandals this country has ever had to endure. It was the honourable member for Oxley who brought in a Budget with a deficit of $2.8 billion. Yet within the space of a mere 6 months, the figure was soaring to nearly $5,000m. It is the same honourable member for Oxley who, at the weekend in a delusion of grandeur, proposed the funding of a special $800m project which he said would bring employment to 50 000 Australians. What he did not say was that this $800m project would, firstly, lead to higher inflation; secondly, lead to higher interest rates; thirdly, drastically interfere with the money supply and, fourthly, would lead to higher unemployment in the long run. If those 50 000 could be given the opportunity -

Mr Hurford:

-Mr Deputy Speaker, I rise to a point of order. The Bill before the House is about revenue sharing and whether the Grants Commission should be the body to determine it. I draw to your attention the speech of the honourable member for Denison which is well off that subject. I ask you to rule accordingly.


-The honourable member is allowed to make some passing reference, but seeing that that passing reference has now lasted 3 minutes, I invite him to return to the Bill.


-Thank you, Mr Deputy Speaker. I now see a new ticket with respect to the honourable member for Oxley and thehonourable member for Adelaide- the HaydenHurford ticket presently quoted at 25 to 1 on the interstate betting markets.


-Order! The honourable member is testing the patience of the Chair.


– I take your point, Mr Deputy Speaker. I will not pursue the honourable member for Oxley much further because, personally, I like the honourable member for Oxley. But it is a very great pity that he comes into this chamber and twists and distorts the new federalism policy which is the greatest thing that has happened to the States of the Commonwealth of Australia in 77 years. For the honourable member for Oxley to come into this chamber and suggest that the States are worse off because of our new federalism policy is arrant nonsense. The State of Tasmania- a State with less than 3 per cent of the population of Australiaunder Fraser federalism received more than 5 per cent of all Commonwealth income tax revenues collected in this country. So when the honourable member for Oxley says that it is nonsense, he has to convince over 400 000 Tasmanians that they have done very badly out of it when with less than 3 per cent of the population of Australia they receive over 5 per cent of personal income tax collected in this country. Of course the honourable member for Oxley puts behind him, as he would wish to because it destroys totally his argument, what the Treasurer (Mr Lynch) said last year in his Budget Speech. The facts are there and they are indisputable. The Treasurer said:

Under Stage 1 of the scheme -

That is the new federalism- the States will be entitled to 33.6 per cent of the Commonwealth’s personal income tax collections, excluding any special surcharge or rebates.

On present estimates -

Which, in fact, came to pass-

  1. . this puts the States’ entitlement Tor 1976-77 at $3,7 16m. This would represent an increase of $643, or about 21 per cent over the comparable grants in 1975-76. . .

That was the year when the honourable member for Oxley was Treasurer of this country. He has failed to take into account that under Fraser federalism, in the first year the States received an increase of 2 1 per cent in assistance from the Commonwealth. For the honourable member for Oxley to have the temerity to say that the States are worse off, makes me wonder whether I am mad or, with respect, whether the honourable member is mad. If the honourable member claims to be an economist and is saying that the States are getting a bad deal when they get an increase of 2 1 per cent on what he was able to provide to them, then quite frankly I wonder which of us ought to be in a lunatic asylum. The figures speak for themselves. Under Fraser federalism the States came out more than $3.6 billion better off than they would have if the previous Administration had remained in office.

The honourable member for Oxley contendsagain erroneously- that it is the worst thing in the world to leave the question of dividing the cake as between the States to the Commonwealth Grants Commission. He overlooks the fact, as indeed most centralists overlook the fact, that the Grants Commission was set up in 1934 to protect the smaller States. To a large extent the Grants Commission was the creature of a Tasmanian genius, Professor Lyndhurst Giblin. It was set up to protect the smaller States and a fortiori to protect all the States against the centralist powers in Canberra. The honourable member for Oxley, who is an undisguised centralist, will, I believe, at least have sufficient credit to acknowledge the fact that I quoted in my maiden speech in this House the words of a great South Australian, Sir John Cockburn, who said that the tendency for power is always to draw to the centre- the vortex- and all the buttresses and ties in the Constitution must be against that tendency. As a federalist and as a States’ righter, I say thatone of the greatest protectors of the States has in fact been the Commonwealth Grants Commission. The State of the honourable member for Oxley has been a claimant State. My State has been a claimant State. The State of the honourable member for Sturt (Mr Wilson) has been a claimant State. It is feasible for any State under disability to go to the Grants Commission. How does it approach the problem? Firstly, unlike the honourable member for Oxley, it recognises that all parts of Australia are not equal. I merely quote paragraph 2. 1 of the 1976 forty-third report of the Commonwealth Grants Commission in connection with inequality among the States. I am sorry that the honourable member for Oxley is leaving the chamber but he has to go and count heads because he has an appointment tomorrow. The Grants Commission, in its report, said:

The economies of the Australian States differ from one another in ways which have an important bearing on the relative capacity of the several State governments to provide services for individuals and businesses.

That was something which the Whitlam Government failed to recognise. It went on:

Among these differences are those of area, climate, topography, natural resources, size and distribution of population and productive capacity and levels of income and expenditure. In addition, there are considerable differences among the States in the average rate of economic growth as reflected in the growth of population and output of goods and services.

If the honourable member for Oxley had taken the trouble, which I do not think he ever has done, to look at the Grants Commission Act, he would find that under section 5 of that Act a very important principle is established. That section states:

References in this Act to the grant of special assistance to a State are references to the grant of financial assistance to a State for the purpose of making it possible for the State -

And I emphasise these next words- by reasonable effort, to function at a standard not appreciably below the standards of other States.

If the honourable member for Oxley had taken the time to look at section 16 of the Grants Commission Act, he would see that the Commission is duty bound to inquire into and to report to the Minister upon:

  1. any application made by a State for the grant, under section 96 of the Constitution, of special assistance to the State;
  2. any matters, being matters relating to a grant of assistance made under that section to a State either before or after the commencement of this Act, that are referred to the Commission by the Minister; and
  3. any matters, being matters relating to the making of a grant of assistance under that section to a State, that are referred to the Commission by the Minister.

Now the honourable member for Oxley, by his barren, irrelevant speech, has indicated to the people of Australia that he just does not understand what the Grants Commission is all about. Furthermore, he ignores the fact that at no less than 3 Premiers Conferences in 1 976, every State Premier agreed that stage 1 of the new federalism should be subject to review by an independent body. I emphasise the words ‘by an independent body’. The honourable member for Oxley has endeavoured to demonstrate- again failing completely because I do not honestly believe he has the faintest idea of what is involved in the burden of proof -

Mr Sainsbury:

– He is five to one now.


-He has drifted considerably. The honourable member for Oxley has failed completely to appreciate that the only argument has been as to what should be the independent body- who should be the umpire- to resolve differences which arise in the distribution of the cake as between the 6 States. Everybody agrees that there has to be an umpire. The only argument has been as to who should be the umpire. The honourable member for Oxley contends that the majority of State Premiers are positively and categorically opposed to the Commonwealth Grants Commission being the appropriate body. What on earth do they have against the Commonwealth Grants Commission, a body comprised of men such as Mr Justice ElseMitchell, Professor R. L. Mathews and Mr W. R. Lane, 3 gentlemen I would have thought whose integrity and impartiality would not be challenged in this Parliament or anywhere in this nation? Mr Justice Else-Mitchell is regarded by every State Premier and the Commonwealth Government as being the appropriate person to head the Grants Commission dealing with the distribution of local government moneys. Is it to be suggested that he is going to change his spots and will not be a fit and proper person to review impartially the distribution of funds to the States?

Let us hear what the Premiers had to say at the last Premiers Conference when the Commonwealth Grants Commission was discussed. The Premier of Victoria, Mr Hamer, supported the view that the Commonwealth Grants Commission was the appropriate body to determine differences arising between the 6 States. The Labor Premier of New South Wales, Mr Wran, did not have strong objections to the Commonwealth Grants Commission undertaking that role. The Premier of Tasmania, for whom I have a deep affection, was under the very same misapprehension as the honourable member for Adelaide. Tonight the honourable member for Adelaide, in some incredibly twisted logic, which has also made him drift very dramatically in the market -

Mr Goodluck:

-Ten to one.


-Twenty to one. He contended that by some extraordinary twist of logic the Commonwealth Grants Commission could not determine relativities between the States and at the same time determine the claim of a claimant State. Let me tell the honourable member for Adelaide that the Commonwealth Grants Commission has done precisely that in this city of Canberra in the last 8 weeks. It has made a determination to split up the 1.52 per cent of revenue which the Commonwealth made available to local government. Tasmania said that it had not had a fair deal and it applied to the Commonwealth Grants Commission for a review of the allocation for local government. That review has been carried out and determined. I suggest to the honourable member for Adelaide that if he is patient he may very well find that it is within the ambit of the Commonwealth Grants Commission to vary a decision it has made as to the relativities between the States.

The Premier of Western Australia, with reasoning which I find with the greatest respect to Sir Charles Court hard to follow, contended that the Grants Commission was not the appropriate body. I did not have the honour to be present at the Premiers Conference. One can go only on that which has been released to the public. I fail to appreciate, with all due respect to Sir Charles, exactly what he was contending. But let us say that he was intransigently against the proposal because it emanated to some extent from the Commonwealth Government. In the interchange between the Prime Minister and the Premier of Tasmania it was obvious that the Premier of Tasmania was under a complete and total misapprehension. Part of the transcript of the Conference was published in an interesting article which appeared in the National Times of 30 May last. Mr Fraser is quoted as having said, obviously by way of a rhetorical question:

  1. . the States reject the Grants Commission which has done more than any other body to protect them.

Mr Neilson said:

What we are trying to do is to preserve it -

In other words Mr Neilson was not attacking it; he said he wanted to preserve it- after this conference makes a decision.

The report continues:

Mr Fraser You are rejecting it for a particular purpose. Mr Neilson: Only for the purpose of settling things here. What you are seeking to do by your proposal is virtually to prevent the States from being in a position to get to the Grants Commission as individual claimants.

Nothing could be further from the truth. Indeed at that very Premiers Conference, the last Premiers Conference held in this city, a question arose because of a variation between the projected population of Tasmania and four other StatesSouth Australia, Western Australia, Victoria and New South Wales. The actual populations of those States turned out to be less than the original figure which had been anticipated. Because of that Queensland was $18m short of what it should have been entitled to and 4 of the other States received more than they should have been entitled to and had to disgorge the excess. It was at that very Premiers Conference that the Tasmanian Premier was advised by the Commonwealth Treasurer, Mr Lynch: ‘If you feel you have been badly done by then for heaven’s sake go back to the Grants Commission and ask for an additional grant’. That challenge has been taken up by me but has never been accepted by the Premier of Tasmania. So how he can say, with the greatest of respect to him, that in some way this proposal prevents the States from becoming claimant States I just do not know. The honourable member for Adelaide used Mr Paul Kelly’s article in the National Times as a basis for his speech. But he omitted to read the most important and final sentence in which Mr Kelly wrote:

Only a Senate revolt-a rare occurrence even when the interests of the smaller States are involved- can stop the Government from proceeding with a much-needed review of State relativities, using the body with the most expertise for the job.

Mr Paul Kelly, after interviewing the Premiers, after quoting the transcripts came to the fair conclusion that the Commonwealth Grants Commission is the body with the most expertise for the job. But the Commonwealth has done more than that. As the. honourable member for Sturt has pointed out it has said that after the Commonwealth Grants Commission has determined the relativities, if the States are still not happy about the situation they can bring it up at the next Premiers Conference. What could be fairer than that? If any State feels it has been badly dealt with or there has been an injustice it can bring up the matter at the next Premiers Conference. Is anybody to tell me that at the next Premiers Conference if the Premier of South Australia, for whom the honourable member for Adelaide was the working dog tonight, feels that he has been badly dealt with that he will not raise Cain, that he will not put forward the injustices to South Australia both inside the Conference and outside where he can get to the nearest batch of television cameras that are assembled? The point I make is a fundamental one: The Commonwealth Grants Commission is clearly the body with the most expertise. It has been accepted by the States as the body to determine the split-up of local government revenue. Why on earth should it not be the body to determine the split-up of personal income tax revenues? I find the Opposition’s arguments shallow and weak, unconvincing in the extreme, the sort of arguments one would expect to hear from centralists who hate federalism and who are doing everything they can to blacken the image of new federalism in Australia. We on this side of the House are federalists. We believe in the smaller States, we believe in equality of opportunity and we believe in the Commonwealth of Australia. It is not surprising that the Canberra centralist bureaucrats, the socialist oriented gentleman from the other side of the House, hate everything that we are trying to do because they know that it will lead to a better Australia and better government for the people of Australia as this nation marches towards the twenty-first century.

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

Minister Assisting the Treasurer · Stirling · LP

– in reply- I thank honourable gentlemen for participating in this debate. There is no need for me to elaborate in answer to the points made by members of the Opposition because they have been effectively demolished from the Government side. But I do wish to say one thing about the contribution by the honourable member for Sturt (Mr Wilson). He is the chairman of the Government back benchers’ committee on federalism and as such is well versed in the subject matter being considered, as well as being concerned about the implications of these 2 Bills. He asked whether the Government would give consideration to amending section 12 of the Local Government (Personal Income Tax Sharing) Act in relation to interstate relativities for tax sharing between the States as well as relativities for tax sharing between local government throughout Australia. I understand his concern about the implications for sharing in the local government field arising from the amendment to be put through tonight in this Bill. On behalf of the Government and on behalf of the Treasurer (Mr Lynch) I say that certainly the Government will give consideration to the point that the honourable gentleman has raised. I should be pleased to have further discussions with his committee on that matter.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

Motion (by Mr Viner) proposed:

That the Bill be now read a third time.


– I wish to explain that the fact that the Opposition did not call for a division on the motion for the second reading of this Bill does not mean that it is in favour of this Bill. The voices saying ‘No’ were loud and the intention to oppose the Bill was there; but, as the session is drawing to a close and there is an enormous amount of legislation to be dealt with, the Opposition has agreed to abide by the wishes of the Government to spend time in debate on this and the next measure before the House rather than in division. I wish to have that put on the record.

Question resolved in the affirmative.

Bill read a third time.

page 2152


Bill returned from the Senate without amendment.

page 2152


Message received from the Senate intimating that it had resolved that the Senate Publications Committee or any sub-committee thereof have power to move from place to place when conferring with a similar committee or sub-committee of the House of Representatives.

page 2152


Second Reading

Debate resumed from 25 May, on motion by Mr Lynch:

That the Bill be now read a second time.


-The Opposition is also opposing this Bill. In the Opposition’s view, it is simply another device which the Government has introduced and which reneges on an election promise. The people of Australia were promised full tax indexation by the Fraser Government when it was in Opposition. The promise of the Liberal and National Country Parties obviously was attractive to the Australian people and would have been a significant factor in determining which way a number of people voted at that time. Those who voted for full tax indexation because they expected to get just that- full tax indexationwere duped. Last May, amid a great fanfare, the Treasurer (Mr Lynch) announced that tax indexation was to be introduced in one year instead of 3 years as originally promised. When he made that announcement he claimed for his Government, to quote his phrase, ‘an historic reform’. Tax indexation was to be not just another tax cut but a permanent reform that would benefit taxpayers year after year. In just 12 months that socalled historic reform has been eroded substantially. I will show that the erosion in the Bill before the House is not the only erosion that has taken place in regard to that broken promise.

Tax indexation has become just another item in a formidable list of broken promises. I believe that I am in order in listing some of those broken promises. I honestly do not think that there is sufficient time to catalogue all of the broken promises that have been perpetrated upon us by this Government, but just for the record I will mention a few of the more obvious ones. Initially there was the promise by the Prime Minister (Mr Malcolm Fraser) that the Budget deficit would be reduced, predominantly by promoting a higher growth rate in the economy. This approach to the economy, regrettably, was shelved very early in this Government’s history. That was a great pity, because that promise contained virtually the only piece of rationality about the deficit mentioned by the conservatives in that election campaign. We all know that the only answer that this Government has had to the deficit has been the slashing of government spending and that the only effect that that slashing of government spending, along with other disastrous policies such as devaluation, has had on our economy has been to bring the economy to its knees even further and to create the unprecedented unemployment that we are suffering at the present time.

The commitments to full wage indexation and to the maintenance of Medibank also were soon abandoned. They are 2 other promises that were broken. Wage indexation had to go because it did not fit in with the conservatives’ strategy of reducing real wages and forcing wage and salary earners to carry the major burden of the fight against inflation. It is interesting to note in passing that in the 12 months to March 1977 real wages had fallen when compared with the previous 12 months, but that inflation had not. Probably the most spectacular broken promise to date, however, has been the dismantling of Medibank. As honourable members know, Medibank is very appropriate to the legislation before the Chair at present. When one considers the confusion and inefficiency that have followed that decision, it is hard for me to imagine any rational reason that the Government could have had for making that policy decision or adopting that policy measure.

Mr Sainsbury:

– Has Medibank been dismantled?


-The impression that has been left is that the conservatives have dismantled the universal health scheme that was operating so successfully and have substituted for it the present unsatisfactory form of health insurance. I believe that this was done predominantly because the Labor Government set up the original scheme and the Government emotionally felt therefore that it -

Mr DEPUTY SPEAKER (Dr Jenkins)Order! I invite the honourable member for Adelaide to return to the Bill and not to answer the unruly interjections.


-Thank you, Mr Deputy Speaker. I will, of course, return to the Bill. You would know that one of the main measures in this Bill is the removal of the Medibank component from the calculations in relation to tax indexation; but I agree with you that the relationship is probably tenuous. I return to the latest example of the Government’s deception. When the Government brought in the so-called tax indexation it said that the consumer price index would be discounted for the effects of indirect taxes and charges for use in the tax indexation calculations. I had the honour of leading the Opposition in the debate on that subject at that time. The Opposition pointed out then that this meant that Australians in fact were not receiving full tax indexation. By putting qualifications on the extent to which taxation would be indexed, the Government left the way open for a further watering down of the proposal. That is precisely what has happened in this Bill before us tonight.

It is worth remembering that the Government was very much aware, when it introduced the Incomes Tax (Rates) Bill 1976-that is the Bill to which I have just referred; the original Bill in which tax indexation was introduced allegedly in one year with the qualification I have mentionedthat Medibank and other health insurance charges were going to inflate the December quarter consumer price index. I would like to put that in other words to make the position clear. It was clear at the time that the Income Tax (Rates) Bill 1 976 came into this Parliament that the Medibank charges would be included in the consumer price index. One can legitimately ask why the particular changes that are being made in the Bill now before the House were not made at that time. They would have been equally wrong at that time as they are now, but I want to know why the changes were not made at that time. If the Government had been honest it would have made provision for such factors in the original Bill and it would not have attempted to get the Australian people to believe that they were going to get something that they were not going to get. The Government received much favourable publicity at the time it introduced its version of tax indexation. I wonder whether the reception would have been quite as favourable if commentators had known of the changes that were going to be made later, namely, the changes in this Bill.

The total cynicism of the Government’s approach in this matter is demonstrated by referring to page 122 of the transcript of the September national wage case. I referred to this matter at question time today. Mr Morling, Q.C., who was appearing for the Commonwealth before Mr Justice Moore and other members of the Conciliation and Arbitration Commission, was asked by the Bench, before lunch on 4 November, whether the Medibank component of the CPI would be removed for tax indexation purposes. A specific question was put to him. I shall quote again from the transcript of the hearing on 4 November 1976. The Bench resumed after the luncheon break at 2.15 p.m. The implication of that is that there had been consultation with the Government before the answer was given. The whole implication of the way in which Mr Morling phrased his words was that there had been proper consultation. Mr Morling said:

Before the adjournment His Honour Robinson, J. asked me whether I could inform the bench as to whether the Medibank components of the December consumer price index would be removed from calculations determining the tax indexation adjustment to take effect as from 1 July 1977. The answer is no to that question.

I repeat that was a considered answer given immediately after the luncheon break when clearly consultation had taken place with the Government as to what the answer should be to Justice Robinson’s question. This was not a vague election promise. This was a specific undertaking by a representative of the Government during a national wage case. When Mr Morling gave the answer I have just outlined he was, I repeat, being quizzed by the Bench over the Government’s contentions in its submission that there would be a modest increase in real disposable income during 1976-77, the current financial year. Obviously the Bench was taking all possible sources of increases in disposable income into account in reaching its decision. The Bench reached its September and subsequent decisions on the assumption that wage and salary earners were to receive the benefits of tax indexation according to the rules then applying and according to the rules that Mr Morling outlined to it. The Government, I assert, has deceived not only the Australian people at election time and subsequently, but also the Bench on that occasion.

I also wish to mention that it has come to my notice that when in February of this year, or it may have been early March, the Bench was considering the December quarter consumer price index, there was no mention or indication in the Government’s submission that there would be anything but full indexation- not indexation qualified and discounted by the Medibank component of the CPI or indeed by any devaluation component of the CPI.

Mr Willis:

– Another broken promise.


-As the honourable member for Gellibrand points out, this was another broken promise. I draw the attention of the House to page 129 of the transcript of the December quarter national wage hearing. The calculations included in the submission from the Commonwealth Government indicated that the cost of tax indexation would be the full cost without any discounting for the Medibank component. I also draw attention to exhibit M05 attached to the transcript of that hearing which indicates the same position, namely that there was no intention at that time on the part of the Government to discount tax indexation for the Medibank or devaluation component. So we must come to the conclusion that this is a recent decision for purposes of Budget balancing, to use a convenient phrase, and I shall point out later how it is a deceptive way of increasing taxes. The only conclusion to which we can come is that by this measure the Government is increasing taxes. The ramifications of this deception could be immense. How can the Commission and the various other parties to the wage hearings have any confidence in the Government’s future submissions? When the Government does not even honour its commitments to the country’s wage fixing authority, how can we even believe any other promises which the Government might make to any other authority? The Government misleads the authority as well as the people.

What will happen if the Government ever reaches the conclusion that a positive move in economic policy making would be an indirect tax cut in return for a limitation to wage rises as a trade-off? The unions, in the light of this experience, would have to suspect that the Government would not keep its ends of the bargain because, I repeat, the Government has deceived the Commission on this occasion. As well as eliminating the health insurance component of the CPI, about which I have spoken mainly to date in respect of this legislation, the Government in this Bill is also, as honourable members know, discounting the index for devaluation effects. Realistically this was only to be expected following the recent national wage decision. The Government has seized on another opportunity to attack living standards and to reduce the deficit.

I must tell the House that in accordance with normal courtesies I was given a copy of the Bill prior to it being brought into the House. The original Bill that I received did not contain the alterations relating to devaluation. The discounting for devaluation part of the Bill is another example of a last minute conclusion.

I have a number of objections to this proposal, not the least of which is the Opposition’s objection to the Government’s original decision to devalue. Although the inflationary effects of this move have been slower in affecting retail prices than was expected they will inevitably do so. They were slower because the information relating to the March quarter consumer price index was collected in the middle of February and retail sales were so sluggish that pre-devaluation prices were still pertaining in the middle of February. Therefore we have not felt in the consumer price index anything like the full adverse effects of the disastrous devaluation decision.

By opposing the passing on of devaluation induced price rises to wages, the Government has sought further to reduce real wages and thereby to reduce the living standard of millions of Australian wage and salary earners. The wage and salary earners should realise that this drop in their real wages will occur to satisfy the Government’s aims in income distribution. This Government is fonder of distributing income to mining companies away from wage and salary earners than it is in doing almost anything else. In forcing the decision to devalue on his Government colleagues the Prime Minister hoped to take income from wage and salary earners and give it to many others, including most particularly mining companies which did not need it. The recent Arbitration Commission decision coupled with this Government’s taxation changes unfortunately brings us closer to the hope being realised of that transfer taking place. Its realisation will do absolutely nothing for economic recovery because it means less purchasing power in the hands of the millions of wage and salary earners who need to have that purchasing power and to use it if we are to effect economic recovery in this country and get the many thousands of unemployed back into jobs.

One of the problems with discounting the CPI for devaluation effects for any reason is the actual estimating of the devaluation component. Distinguishing price rises due to exchange rate changes from other causes of import price rises is an exceedingly difficult, if not almost impossible, task. All estimates of such effects are subject to considerable qualification. It is of dubious worth to attempt to bring a process of such imprecision within the ambit of a tax Act and that is precisely what is happening in respect of this tax Act. It is very imprecise trying to obtain anything near a devaluation component in the consumer price index. It is regrettable that such imprecision is included in tax legislation such as the legislation we are now considering. Now that the Government has established this precedent it is open to it at any stage to find new qualifications to full tax indexation. Its so-called great reform of automatic tax indexation has been reduced to the level of a discretionary tax cut. I will grant that it is a very complex discretionary tax cut, but it is still discretionary in the way it is being effected by this Government. Next year if the Government is still overwhelmed with its Stone Age brand of economics and if it feels that it has to cut the deficit back further, no doubt it will find other factors which the Governor-General has to take into account before setting the final tax indexation figure.

If the Government had been committed to any real principle of complete indexation, the index figure for the 1976-77 tax scales would have been greater than the consumer price index. The Government has always said that the 1975-76 CPI would have been higher without Medibank. Surely the logic which says that when health insurance charges cause the CPI to rise they have to be discounted from the index, then that same logic should also demand that when health insurance charges limit the rise in the CPI, those charges should be added to the index. I repeat that point and remind the House that in the previous financial year when the Australian Labor Party Government introduced Medibank, the Medibank levy was substituting for health charges. Honourable members will remember that because of the substitution there was a beneficial effect on the consumer price index increase at that time. When tax indexation was introduced as from 1 July 1976 the figure which was used was the exact CPI figure which was less than it would have been because of the beneficial effects of transferring health insurance charges to the levy rather than it being paid to a private fund. The logic is that if we are going to discount the CPI because of health insurance charges on this occasion then at this time last year when tax indexation was introduced, the CPI component should have been larger because of the reduction which had taken place in the CPI due to the previous beneficial changes in the CPI.

The Government’s preoccupation with reducing the deficit has brought it to the point of sabotaging what it has always described as its greatest reform. We see what a subterfuge that so-called reform is. The conservatives made great promises about reducing the tax burden. But this Bill ensures that the real tax burden will increase. The economic implication of such a tax increase has to be considered. At the moment consumer demand is flat and indications are that April was a particularly bad month for retailers. This increase in the tax burden can only further erode consumer demand. Estimates of activity in the economy for the next financial year, pessimistic as they are, have been based on there being full tax indexation. These changes to the tax rates would increase real taxation by almost $145m relative to full indexation if that had been allowed.

The Government will do nothing in this measure for economic recovery. The Treasurer argued in his second reading speech that these changes would safeguard the stimulus to activity and the consequent employment effect that devaluation was beginning to bring about. He is one of the few people who has found evidence of stimulus to activity from devaluation. Perhaps the House could be given far greater details than it has at the present time of any evidence of the stimulus to economic activity from devaluation. The Opposition was going to oppose this Bill on the grounds that it involved the breaking of an election promise and that it would militate against economic recovery. These were sufficient grounds for our opposition but now we have discovered that in introducing this Bill the Government has reneged on an undertaking given to the Conciliation and Arbitration Commission and the matter therefore becomes significantly more serious.

There must be trust between the wage fixing body and the Government. Any government which breaks that trust should be rebuked in the interest of all. I wonder whether this Bill would have got through the Government party room if this deception had been known at the time. I trust that it would not have done. It is not too late for the Bill to be defeated or for the Government, at this stage, to decide to withdraw the Bill. I hope if the Government, for its own strategic reasons, feels that it is necessary to go ahead with the Bill in this House, that better counsels will prevail when the Bill gets to the Senate. The Opposition opposes the Bill.


– I think it is fair that before I speak to the main aspects of this Income Tax (Rates) Amendment Bill I should make some passing reference to the comments of the honourable member for Adelaide (Mr Hurford). Certainly, one of the areas of controversy in this type of legislation has been and always will be what index factors one takes into account- the amount assumed to discount the total revenue for the year and whether that is adequate. Of course, a Bill of this description cannot do that. The bone of contention in this place, among many others, is the Medibank levy. I think it is a bit hypocritical for the honourable member for Adelaide to stand before us and talk about discounting and its various aspects when his Party, when in government, had the opportunity if it so chose to implement legislation in relation to indexation. To talk about a loss of $147m to the taxpayers of Australia is only a guess by anybody. But I ask honourable members to think of the eventual loss if the Australian Labor Party had stayed in power. The taxpayers of Australia would have been paying $947m on inflated income.

Let us look at the Medibank component. The 3.2 per cent adjustment for the December quarter is, in fact, only a catching up because of the decrease of 2.8 per cent in the September and December 1975 adjustments. I think it is significant that we look at the Medibank component. On the one hand in 1975 we were talking about dropping the consumer price index which was or was not an advantage for the indexation of wages at that time. I ask honourable members to think of the eventual effect which Medibank would have had on the inflation rate to this country from the point of view of funding the national health scheme throughout Australia in an open ended cost arrangement. If this had occurred the cost would still be escalating. I dispute that Medibank has been disbanded. The national Medibank scheme is available for those people who cannot afford to belong to a private health insurance fund. It is there for pensioners who have a minimal income. For all basic purposes the Medibank scheme is still a national scheme available to those who want it. All we did- I believe we did it very successfully- was to ensure that those people who could afford to pay the Medibank payments did so. In spite of the confusion which existed at the time I believe that the changeover in the Medibank pattern has been successfully brought about by this Government. Possibly it has been more successful than some honourable members appreciate. But I do not want to dwell too much on that matter.

I believe that we should point out the hypocrisy of the assertions of the Australian Labor Party about the decrease in the deductions offered at this time in view of what that Party was prepared to do. In preference to following the report of the Mathews Committee the Labor Party chose to accept the Hayden Budget. The benefit which was expected from that Budget has yet to be proved. I prefer to describe that Budget as being the biggest fraud ever foisted on the Australian public. But let us get back to the Bill because perhaps there are some aspects in it which many people and many honourable members in this place are turning over in their minds. I refer not only to the indexation of taxation but also to the total question of indexation right across the board, as we now see it. In the inflationary period which we have had since 1972 until the present time- of course, the record years being 1973, 1974 and 1975- indexation did not give relief. The Australian Government at that time was able to pick up an additional 80 per cent in personal taxation of a windfall type. I believe that some relief is necessary in order to put some real value in the form of extra money into the pockets of wage and income earners throughout the Commonwealth so that they can maintain their relative position and be able to buy tomorrow what they can afford today. In that respect I believe that tax indexation is a measure which we can and do support. Let us get away from the argument of just how much the index figure should be. The consumer price index is only one index, and I do not think anybody in this Parliament would claim that one particular figure could be supported as the correct one.

When we talk about a reduction of $800m, we should ask ourselves whether it is enough or too little. No one will ever know because the legislation is sufficiently broad, sufficiently general. It is not intended to be specific. Certainly we would agree that in all these areas the legislation itself is imprecise and the figures are imprecise, but in respect of the general benefit which it is intended to give I do not see any solution in accepting another index or selecting another figure by which it could be reduced. In this context, it should be realised that people on fixed incomes will gain an advantage. They will get some benefit because their indexed rates will increase but the scheduled rates of tax will not rise. Again, perhaps that is the area of greatest need. What really matters in this country today is not the amount of income one earns or the amount of tax one pays but the amount left in the pocket after the whole calculation is done and the whole exercise finished. We need to ensure that the value of the money in people’s pockets is the same as it was before.

The danger of indexation is that it locks a government into a situation which may not be to its liking or advantage in the years ahead. The previous speaker took the liberty of saying that last year the Government published this initiative throughout the length and breadth of this country, but I am prepared to stand here and say that nine out of ten people in the street do not know what tax indexation is. I do not believe that we sold it sufficiently well, and as a result I do not think we will get any more credit for this legislation. It will not be viewed as a great tax reform. It will be regarded as a great reform in its day, but as it is indexed year by year it will become an accepted fact of life for which this Government will receive no credit.

Mr Sainsbury:

– They will vote us back.


-Certainly, with a greater majority, I trust. The real danger is that while this or any government is locked into indexation it is prevented from doing other things in areas where reform is vitally necessary, and I will mention a few. The first is the impact of inflation on the small income units which require a minimal living income. I believe that what we require in that area is a year by year adjustment to see what has affected the economy ever the past 12 months. I refer not only to inflation but also to other factors which should be taken into account to see whether relief is required to ensure such people are left with a minimal income. To take one example, we give a pension to the aged and allow them to earn up to $20 a week over and above that figure without affecting the pension. But that puts them into a taxable income bracket, and I think it is most unfair to give on the one hand and to take away on the other. We should put into an agreement a yearly figure which will increase the minimal amount which aged taxpayers have to receive so that the amount they can earn without their pension being affected is increased. Heaven knows, these people find it difficult to make ends meet week by week.

In the case of middle income families, is tax indexation sufficient to maintain the incentives we expect of them? The middle income people are the silent ones, the people through whom we expect productivity, businesses to expand and to be established. Does tax indexation allow them the incentive to become more productive, to earn more income, when they see at the end of it a large tax loss being taken off the top and the Government being a greater recipient of the benefits of their extra labours than they are themselves? Because of indexation, that is just one area where we could be prevented from giving assistance in the Budget, and it is an area where productivity is desperately needed.

Another aspect with which I want to deal is that of rent collection. These days many people are required because of their jobs to transfer from one place to another, but in order to provide for their eventual retirement they like to keep one house to which they can return. When they leave that place of residence they rent it out so that they can make it produce income in the meantime. At the other end of the scale, they are likely to be paying rent in the place to which they have been transferred, and that is not a tax deduction. On the one hand they are receiving rent and on the other hand they are paying out rent, but they are not counterbalanced for tax purposes. That is one area where tax reform is necessary, but once again perhaps we might not be able to find the funds immediately or even in the long term.

I have spoken on quite a number of occasions about the working married mother in the community. I believe that a significant rebate, if it could be offered within the framework of the tax Act, could be an incentive for married mothers to stay at home and look after their children. This would prevent the social disease of latchkey children who have no parents to come home to because both parents are forced out into the community to earn sufficient to bring up the children as they wish. In going out to work, such parents lose touch with their children and deprive them of an essential ingredient in their lives, that is, parental care and attention 24 hours a day. Many people say that they do not believe married women should stay at home. I do not mind seeing married men stay at home to provide parental attention for their children, but again the incentive or rebate has to be great enough to enable them to do it. Those are all additional problems for which we could give some relief, but because of indexation we are locked into the system and cannot provide a solution to the many problems which arise.

Another aspect recognised by tax indexation relates to zone allowances, allowances for spouses and allowances for dependants. However, because of family allowances children are no longer included in that aspect of indexation. If we are to move into indexation in this field, surely we should also be moving into the indexation of family allowances, although they are not yet 12 months old. Perhaps that is something the Government could look at as a matter of equity. We have deprived the taxpayer of a deduction for children, but we have now indexed zone allowances and other dependants allowances. Perhaps we should also index family allowances for each child so that the value of the money received will remain the same. I believe everybody would agree that indexation of age, invalid and health pensions is absolutely necessary because those people are on fixed incomes and rely heavily on the amount they are given because of their position in life. We would also agree that it is necessary because, if it does nothing else, it takes politics out of pensions. That is a matter which has been fought over for decades in this country, and I hope that we have now gone past the stage where pensions and politics go hand in hand. For that reason I believe that indexation of pensions is necessary. At the same time, why should we index unemployment relief when one of the main problems in this country today is that unemployment relief is so high that there is no incentive for a person who does not wish to work to go out and look for work. The only initiative we could maintain in this area was to peg unemployment relief so that the value in relation to average weekly earnings decreased and did not increase. In the last half year’s indexation we had the spectacular decision that unemployment relief would be indexed with the Medibank component, yet Medibank payments do not have to be made by the recipients of unemployment relief.

Let me get back to wages. The indexation of wages, which has been the catchcry of the ALP and the trade unions for the past 2 years, is something that I believe the average person in the street is looking at very definitely and very hard at the moment. I agree that in normal circumstances an increase in wages which is not backed by productivity is not wholly and solely responsible for the inflation rate but it adds considerably to it, so once a wage is indexed, an amount is automatically added for the next quarter so far as further inflation is concerned. This was particularly the case not so much when the decision was given by the Arbitration Court as when the indication was given by the Government that the Medibank component would be included. I believe that many workers in this country, as well as employers, wondered about the wisdom of that.

I believe that the whole situation in regard to indexation had to be looked at very closely. If we are logical in this matter, if taxation is indexed and everything else, including wages, is indexed, why do not we index our capital programs? For example, consider a program that it is intended to complete over a period of three or four years and is financed in the initial year by a block grant. Inflation will probably double the cost of that project but the base amount has not been indexed. If we are to look at indexation, let us look at the whole area. You, Mr Deputy Speaker, mentioned in this House only a month ago, when speaking on another tax Bill, income averaging for primary producers. Why has not that income been indexed from the year 1966 when it was last moved 1 1 or 12 years ago? That base rate of payment has remained the same. Why did not we index that? If we do not index it, let us increase the ceiling or get rid of it altogether.

While I can support this Bill and do support it in the present rate of inflation, and while I do not agree with the hypocrisy of members of the Australian Labor Party in saying that the percentage of the index was not right or that so much has been taken off the taxpayer on the other handan amount that Labor have greatly exceeded- as quickly as we can we should get inflation under control and look at all aspects of inflation right across the board so that we can get out of this locked-in position in which we currently find ourselves. We are locked in with wages because while we index wages we do not look at productivity. While we index taxation, we are not allowed necessarily to look at other areas of tax reform that are so vitally and obviously necessary.

I support this Bill but I feel that I had to make those additional comments to impress upon the Government the need not only to bring inflation under control but also to look at all aspects of the current indexation. For goodness sake, when we start to consider the indexing of anything else, we should have a hard look at it.

Melbourne Ports

-What the honourable member for Dawson (Mr Braithwaite) has just said points to the reality of the position. When we start to index, we are beginning to acknowledge that inflation is not under control. As I said in a speech I made not very long ago, if we begin to index everything I am not too sure that we index anything. Whenever a government begins to index selectively, it may be doing justice to some sections at the expense of injustice of other sections. I think that the honourable member probably would agree with that. I think he said that what was being done was a little imprecise. Sometimes when there is imprecision, the tendency exists to suggest that what is being done is specific. There are great difficulties in what is being done in this mechanism of indexation. What does the Government mean by indexation? Does the Government mean that if a person has a certain income at the beginning of the ear- he may be a farmer, a sole employee or, as think is meant principally in this case, an employee- and because of inflation the income becomes higher and adjustments are made to it? Is not what we are arguing about in this Bill that a person’s income, taking tax into account at point A should be the same at point B-usually 12 months later- after allowing for cost of living increases? In other words, taking tax into account, the person’s income should be exactly at the same level at point B as it was at point A. That is not what happens in relation to what is called tax indexation.

Let us get down to fundamentals. There is no exemption of income earned. The total income is still taxed. All that is done to allow the brackets of taxation to slide up. I do not think that anybody has demonstrated that after taking into account the additional tax and the additional income the taxpayer is as well off as he was 12 months before. This is why I say that sometimes we use a term as though we understood what it meant. I referred the other day to the common fund queston relating to international trade, which is not altogether relevant to this debate. I made the point which I am trying to advance now, namely, that we latch on to a phrase and we think that because we adopt the phrase we have found the solution. This is not the situation.

What is tax indexation about? It is supposed to produce a situation in which, after a person’s income has risen above that of the previous year, taking tax into account he is in the same position as if prices had not risen. Nobody can seriously say that is what this Bill does. Really, the Government has violated the principle on which it stood. It has discounted the amount of the indexation. It has taken into account factors which may be relevant to the overall economic situation but are not relevant to the particular circumstances of the individual. After all, income tax is about the individual incomes of people at the end of a certain point of time. I do not disagree with my friend, the honourable member for Dawson, about certain propositions but he has not analysed the position far enough. If the Government indexes some things but does not index others it is giving the people an advantage. I do not know whether it is giving the maximum advantage or the right advantage but it is giving some people an advantage as against the rest of the community. But if we begin to index everything and do not halt inflation have we really made everybody or anybody in the long run better off? It is simply acknowledging that inflation is there. I believe that in the finish what is called indexation simply means that the tax schedules must be adjusted every year.

Mr Braithwaite:

– With other considerations also.


– Exactly, with other considerations. It is the other considerations to which I want to draw some attention. There is a sort of tendency to believe- I am afraid it still persiststhat what is collected in taxes does down the drain or down the sink. But what is collected in taxes is part of the social performance. The public cannot demand greater social performance, as I think it does, without an increase in taxation. We cannot start to take into account in advance what is called indexation without acknowledging on the other side that there may be greater demands on government. I believe that despite this sort of zeal for what is called private enterprise versus public enterprise- if that is the termincreasingly the sort of things that are demanded in a democratic society call for relatively more expenditure at the public level and relatively less expenditure in the other arena. Once we start indexing tax we can go to the extreme of indexing the tax schedule if we like, and then decide that overall we need, say, a 10 per cent increase in taxation. What will we do then? Will we redistribute the schedule we have readjusted in the name of indexation and then say that we have to go to indirect taxation instead of direct taxation?

One of the things which I admire about the National Country Party members, who are interjecting, is that when one of them speaks the others come into the House and support him. However, occasionally they do not. They did not yesterday. There was one zealous member speaking, but he was the only one from his Party in the House and I was the only one on this side of the House listening to him. Now, suppose that we want additional money to pay for a superphosphate bounty.

Mr Corbett:

-What about nitrogenous fertilisers?


-This afternoon I twitted one of the honourable member’s colleagues about the floor price for wool. It was much harder in our day to sustain that price. I am not too sure that I supported the original price, but I thought that once we had started the scheme it was terribly silly to withdraw it and I persuaded the majority of my colleagues not to withdraw it. We got in the clear because the economic circumstances changed. However, that did not stop honourable members opposite in those days criticising the amount of the deficit, which was $400m greater because we had to support the floor price for wool. They still wanted to criticise the total deficit. Occasionally we have to subject things to better analysis.

What we are doing with the indexation of taxation is adjusting tax schedules annually. In my view they ought to be adjusted annually. We should not allow the position to be camouflaged by the mumbo jumbo that it is indexation and it is doing justice. It is not. Look at the schedule that is provided. Some people, as does every one of us here, get an advantage of $720 a year- $14 a week- through indexation, and some people get an advantage of $70. If honourable members think that that is more equitable taxation, I do not. I believe that we have to have a closer look at it and not allow the real position to be camouflaged by formulas that are imprecise. As has been said, we have to begin to be specific.


-The first thing I want to say is that tax indexation is not a tax cut at all. It does not represent a cost to the Budget. The Treasurer (Mr Lynch), in explaining the legislation relative to tax indexation, said that the cost to the next Budget of the Commonwealth Government would be $825m. That is nonsense. All that he should be saying and all that he can properly say is that there will be no increase in the real level of taxation in total over what it would be in the absence of inflation. That is a very distinctly different thing from saying that there has been a tax cut, that the real level of tax that people pay has been reduced. It is nonsense and misleading and inappropriate for the Australian public to be deceived in this way. I remind honourable members that this is really a high tax Government. This year the increase in tax is a record $ 1,800m, or 25 per cent, bringing total collections to a record $8,775m. A 25 per cent increase in the level of net personal income tax is indisputably the most substantial increase we have seen in personal tax in this country. Yet, remarkably, the Government seems to have had at least some success in persuading people that it is against tax increases and is committed to tax reductions. The evidence is against that.

Let us look at the point which I mentioned a few seconds ago about the alleged cut in taxes. It is not a cut in taxes at all. It avoids tax increases due to inflation. This is not novel. It has happened on several occasions in the past. It happened during the period of the government headed by Mr John Gorton and it happened in the period of the government of the Australian Labor Party until 1975. 1 recollect that in the last

Budget introduced by the Labor Government the cost of proposals under the new tax arrangement was $365m in a half year or equivalent to a $730m benefit in a full year. Measure that $730m against the $825m about which the Treasurer talks as the adjustment through tax indexation and the increase over the 2-year period, the relevant period, is only 1 1 per cent. Yet the consumer price index this year will increase by between 14 per cent and 15 per cent and next year goodness knows what the figure will be. It certainly will be a double figure. So the saving is relatively wan when compared with the benefits provided in the adjustment to the tax system in the 1975-76 Budget.

I want to move quickly to more important aspects of this proposal. I believe that it is a fake on the part of the Government to claim that it is treating taxpayers fairly in the tax indexation system and then to deduct the effects of Medibank charges, as adjusted by changes brought about by the present Government, and the effects of devaluation. The Medibank charges are a euphemism for hidden tax and the devaluation, to the extent that the adjustment disadvantages taxpayers under indexation, represents a cost imposed on taxpayers and makes them pay the penalty for the Government’s mistakes. What has happened effectively is that a cosmetic has been prepared to allow the Government to increase its total tax take in real terms above that which would be justified in the absence of indexation. Rather than dwell on that matter, because my time is limited to 7 minutes, I want to deal with a particular case to expose the fallacious basis of the argument that tax indexation benefits income earners; that they are better off as a result.

Let us take the case of a man who is an average income earner and is supporting a wife and 2 children. At 1 July 1976, the commencement of the current financial year, his gross pay would have exceeded $9,300 a year. If we assume that average incomes increase over the course of this year by 12 per cent, as the Treasurer presumed in his Budget statement, by 1 July 1977 average incomes will have increased by about $1,440. The tax on the former amount is about $1,543 and on the latter amount about $1,812 allowing for rebates. This means in simple terms that the average weekly earnings in that period increased by 12 per cent and that there was an increase of 17 per cent in the tax which had to be paid, representing an increase in after tax income of about 10.9 per cent. We are expecting inflation in the course of this year of between 1 4 per cent and 15 percent.

Let me go over that. Average earnings increased by less than the rate of inflation and after tax income increased by much less than the rate of inflation and much less than the rate of increase in average earnings. However, the increase in taxation was much greater than the increase in any of those indices. Clearly, in real terms average income earners are worse off.

page 2161


Mr DEPUTY SPEAKER (Mr Lucock)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.

Question resolved in the negative.

page 2161


Second Reading

Debate resumed.


-In the course of this financial year Medibank charges have been introduced. I repeat that this is a thin veneer, a completely unpersuasive cosmetic to camouflage an increase in personal taxes. By 1 July 1977 the average income earner will be paying his Medibank levy at a rate of about 2.5 per cent. He will be paying about $26 1 for Medibank in the course of the year. If we move on and take the income after tax and Medibank charges on 1 July 1977 the figure is $8,370. On 1 July 1976 that amount was $7,780 in round figures. That means that after tax and Medibank charges his income increased by only 7.6 per cent. Inflation, again, is between 1 4 per cent and 1 5 per cent.

I shall extend this exercise further. Let us consider the benefits of family allowances of which we have heard so much and as a result of which it is alleged by Government spokesman the average income earner in the community will be much better off. Family allowances for a man supporting a wife and 2 children are approximately $442 a year. After tax and Medibank charges but with the addition of family allowances the average income earner had at 1 July 1976 $8,220 to dispose of according to his own autonomous wishes. At 1 July 1977 he will have $8,810 to dispose of in this way. That is an increase on only 7.2 per cent. One can see as these sums are developed that he will be progressively worse off. In terms of disposable real income, that is after Medibank charges and so on and allowing for family allowances, he is some $ 1 1 .50 a week worse off as a result of the passage of the current financial year. In real terms the average income earner is not better off as a result of indexation. It is not the panacea which has been claimed by Government spokesmen. How could it possibly be such when the average income earner, after making these quite legitimate allowances I have mentioned- that is deducting the tax he has to pay after the indexation arrangements have been applied, deducting the Medibank charges which he has to pay by 1 July and adding his family allowances- is, in fact, suffering a reduction in the income available to him for autonomous disposal of well over 7 per cent in the course of the year. That means that he is worse off by more than $ 1 1 . 50 a week.

That is the sort of reduction in real living standards which the average income earner has suffered under this Government. This is a high tax Government. Honourable members should make no mistake about that. It is a Government which, on the basis of evidence arising from its own behaviour, is dedicated to the reduction of people’s living standards. That is a most savage reduction in the living standards of the average income earner in the community. It is little wonder that the average income earner in the community is finding it so extremely difficult to make ends meet. This has been a disastrous curtailment in his living standards. Let us look quickly at the situation at the time of the delivery of the last Labor Budget in 1975. It was pointed out then that in the course of the preceding financial year the average income earner, after paying tax, was more than $7 a week better off in real terms. If allowances were made for the redistributional benefits of various programs developed by the Government in that period he was more than $9 a week better off after tax. Honourable members should compare that record with the experience of the average income under 12 months of a conservative coalition Government dedicated with the greatest determination imaginable to reducing the living standards of the average income earner. He will be more than $1 1.50 a week worse off in real terms at the end of this financial year as a result of his experiences at the hands of the Government. Where are the vaunted benefits of indexation. Where are the great advantages from family allowances which are supposed to have sprung to the families of Australia? The fact is that the whole proposal is a fake and a deception. It is just a cheap trick on the community. The community is indisputably much worse off as a result of the fiddling and machinations of the present Government.

Minister for Aboriginal Affairs and Minister Assisting the Treasurer · Stirling · LP

– I shall make only a few comments, particularly about the remarks of the honourable member for Oxley. (Mr Hayden). One must wonder about his assertion after assertion of deception, fiddling and so on. Assertion can never make way from fact. I shall quote a couple of figures from the table showing the 1977-78 tax indexation benefits released by the Treasurer (Mr Lynch) on 25 May 1977. 1 invite honourable members and the public to look at those tables. More than that, I invite members of the public to look at their pay packets on 1 July. They will see that what the honourable member for Oxley has said is untrue. Members of the public will find that they have more money in their pay packets because of the effect of tax indexation. I shall give a few figures quickly for the record. A taxpayer with a dependent spouse and an annual income of $5,000 will benefit from indexation by a saving of $81.80. He will pay $81.80 less tax. For an annual income of $6,000 the benefit will be $166.22. For an annual income of $7,000 the benefit will be $187.50. For an annual income of $8,000 the benefit will also be $ 1 87.50. The same’ benefit will apply to an annual income of $9,000 up to $11,000.

The facts speak for themselves. On 1 July the pay packets of the taxpayers will speak for themselves. As a direct result of tax indexation taxpayers will receive a direct cash benefit. In that way there will not be any hidden taxation by reason of the operation of inflation in contrast to the situation under the administration of the former Government and particularly under the handling of the economy by the former Labor Treasurer, the honourable member for Oxley.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 2162


The following Bills were returned from the Senate without amendment:

Australian National Railways Amendment Bill 1 977.

Housing Loans Insurance Amendment Bill 1977.

Loan (War Service Land Settlement) Bill 1977.

page 2162


Fraser Government -Parliament House: Anniversary of Opening- Public Service- Leadership of the Australian Labor Party -Sydney Telephone Directory

Motion (by Mr Viner) proposed:

That the House do now adjourn.

Mr FitzPATRICK (Darling) (10.39)- I rise tonight to remind the House of the unimaginative and, at times, outright negative way in which this Government approaches the affairs of the nation. Last month a delegation of ordinary Australians came to the Government seeking its attitude to a new road to link the south with the north through western New South Wales and Queensland. Their idea was to provide an allweather road link, from Broken Hill to Boulia using the existing road and about 70 miles of unsurveyed road in the Channel country. They were seeking to have the Army walk the route and survey the virgin country as a preliminary to a decision on its construction. The group already knew what the Bureau of Roads thought and was seeking the attitude of political leaders. The Bureau said that it was too costly but it had praise for the idea.

Last month, in company with other honourable members, I went with the delegation of representatives from the cities of Mildura, Broken Hill and Darwin to meet the Minister for Transport (Mr Nixon) and the Minister for Defence (Mr Killen). I came away from that meeting disappointed, particularly at the attitude of the Minister for Transport. I was not the only one. Councillor Andriske, the Mayor of Mildura, was bitterly disappointed at the Minister’s attitude and when he went home he sent the Minister a letter which was published in the Mildura paper, the Sunraysia Daily, on 2 April. I might add, for the benefit of honourable members opposite, that Mr Andriske is not a Labor man; in fact he is the vice-president of the Liberal Party in Mildura. I quote from the paper’s account of that letter. It stated:

I was quite surprised at your negative approach.

All imaginative projects must have a commencement point and this is a project which has not been lightly considered or hastily presented.

The deputation was well aware of the government’s commitments, the serious cash situation and the state of the economy. These points needed no emphasis.

The mayor went on:

I came away from the interview with the sad impression that you believe the present situation will be going on forever.

If this is so, I can only feel sorry for this country as it appears that we have traded one set of leaders who could say nothing but Yes for a group who can say nothing but No.

Despite your attitude, sir, I believe our country does have a future.

The mayor went on to remind the Minister that continued noes to the electorate might bring forth a rebounding no from the electorate in 1978. It is this negative attitude throughout the Government that will bring it down. I have repeatedly asked for funds for jobs in my electorate and the answer has always been no. I believe that the time has come for more positive approaches to the running of this country, time for a little imagination and time for an end to the blaming of all and sundry for the condition of the economy. I think it is time that the Government did something for the people of this great country.


-There must be a number of honourable members in this House as well as many other people outside it who would expect some contribution to be made by and something to be said from the back benches about our 50th anniversary of the opening of this Parliament House. Indeed, great speeches have been made in the King’s Hall and we have had a very interesting time recalling the events of those days. But I suggest that it would be amiss if there were nothing on the record of this honourable House to show that somebody was willing to say a few words. Therefore, coming from the other House- the House of Commons- I make no apology for saying that I think it would be sensible and perhaps appropriate if I made some observations this evening.

I think that the younger people of Australia show a great sense of history. Those who show students around the House, those who have Australia Day students visiting the House, always notice the great interest that they show both in this House and in the other place. Of course as we look to our nation with so many different nationalities from Europe, Africa and Asia, we must agree that our strength lies in our diversity of culture. Perhaps the most enduring virtue of the Commonwealth of Nations of which we are a member is faith- faith in our religious traditions, faith in our honesty of purpose in the world and faith in ourselves. For we are not sent here to waste this planet for our own material ends but to think about and to work for things of spiritual value. I affirm that I have talked to many young Australians and they are quite mindful of the sacrifice that has been made by their grandparents and by their parents. They accept their role that it is not what they want to get out of Australia but what they can give to Australia and their fellow men. They face up to their great role in international order and the international world by sharing our wealth with others who are far more in need than we are.

Perhaps it would be suitable then to return to the address made by Prime Minister Bruce on 9 May 1927 when this honourable House was opened. He said:

Today it is our solemn duty to affirm our faith in our country . . .

He added:

Today we look back and renew our faith by remembering what has been achieved. Thus we shall strengthen ourselves for the great accomplishment that lies before us.

Within these portals will be framed those laws which will mould the destiny of a people. May those who enter this open door govern with justice, reason, and equal favour to all . . . May they speak with the voice of those who sent them here- the voice of the people.

There are some who would disparage the work that is done in this honourable House. There are some who occasionally make criticisms about the work both here and in the Senate, but I assure honourable members in this chamber and I assure those people that the House is here now and will be here always as the guardian of the rights of the people of this nation.


-Tonight I raise 2 matters concerning conditions of Public Service employment. The first matter with which I should like to deal follows on a speech given during the adjournment debate last week by that famous public servant basher, the honourable member for Hindmarsh (Mr Clyde Cameron). It concerns first-class air travel for public servants going overseas. This is a matter which has been before the Parliament on a number of occasions and a number of honourable members have taken the opportunity of rather insensitively speaking about the rights of public servants when they go overseas.

I feel quite strongly that members of the Public Service in certain circumstances are entitled to first-class air travel. I believe that all senior officers of First and Second Division status should travel first-class as I do and as do other members of Parliament. I believe quite strongly that public servants, where their families, include children under the age of 16 years, should be able to travel first-class when they have to travel many thousands of miles. I do not say this because I think first-class air travel is a privilege or that public servants should be pampered. I say this because I feel that Australia is a very remote country and a country which has conditions of service and needs quite different from those of so many other diplomats and members of government services of other countries. Families who travel for 24 or 36 hours on end are under extreme difficulties. Mothers would find it very difficult to deal with their children, particularly small children with nappies to be changed if they have to queue up for toilets and the like. First class travel for them is not a matter of rich food and free grog; it is a matter of necessity in caring for their children.

The third category of people whom I feel should have first class air travel comprises unaccompanied children under the age of 18 years. I think it would be quite wrong if we expected children of public servants who are not accompanied by their parents to travel overseas in crowded accommodation in aircraft when they could be at risk or feeling very insecure. The extra assistance and attention they would get in first-class travel is justified. The next class of people who should travel first-class is made up of people travelling because of medical evacuation. If a person who is so sick that he has to be transported back to Australia as quickly as possible cannot travel in the relative comfort of first class accommodation, I think the people of Australia would be letting him down. One further class of people for whom I would recommend first-class travel would be members of delegations, no matter what their status in the Public Service, depending upon what duties they have to perform when they arrive. If people have to be effective within 24 hours of arriving I feel that they should have comfort and sleep so that they can do the best for the Australian public when they arrive.

The second matter I should like to raise in relation to the Public Service is a disgraceful Press release by the Secretary of the Administrative and Clerical Officers Association in Canberra last Friday. I think his name is Mr Blunden, but I would suggest his name should be Mr Blunder. He has jeopardised very delicate negotiations that are taking place in relation to paternity and maternity leave because he feels strongly against the Fraser Government. He is not an objective unionist. He is not representing his members. He is trying through his position to get back at a government and to espouse socialist policies in which he personally believes. He has jeopardised negotiations. He has risked a substantial backlash from this Government and members of the Opposition who feel very strongly on the subject of paternity and maternity leave. I suggest that members of his union should reproach him severely for this outburst at a time when the deliberations are in a delicate situation.

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

Mr HODGMAN (Denison) ( 10.52 ^Tomorrow is 3 1 May and it is significant that it is the anniversary of 2 historic battles. On 3 1 May 1 859 the battle of Palestro occurred and we celebrate tomorrow the 119th anniversary of that battle. To the best of my knowledge it was fought in Italy and resulted in a draw. But on 3 1 May 1916 the battle of Jutland occurred. On any basis, the battle of Jutland was the last great naval encounter in the history of the world. Tomorrow therefore is the 5 1st anniversary of the battle of Jutland. If one likes to check back one finds that there are remarkable similarities between the battle of Jutland on 3 1 May 1916 and the battle of Canberra to be fought in this building tomorrow. The battle of Jutland was the first occasion on which the British and German navies actually came into each other’s sight. If I might say so, it is a fair summary to say that the battle of Jutland, in essence, was a fiasco. This was so much so that in the sporting terms of Admiral Beatty at the commencement of the battle between the German battle cruiser squadron and the British battle cruiser force, when two of Beatty ‘s battle cruisers were blown up Beatty remarked in a jocular fashion to his flag captain: There seems to be something wrong with our bloody ships today’. A little later a further encounter took place, but it is best summed up by referring to a fascinating book by Stephen KingHall in which he describes the battle of Jutland in its concluding stages in these terms:

A confused, short and ineffective exchange of gunfire took place between the battle fleets. Some damage was done to the enemy, none to the British. The German fleet, almost encircled, turned to the west and then back to the east. Darkness descended and a strange quiet prevailed for a short period. The British fleet steamed slowly southwards, the battleships in the van, the destroyers and light forces in the rear. For the first and only time in the war the British Grand Fleet was between the High Seas Fleet -

That is the German fleet- and its base. When all the signals and movements were later analysed, it was evident that the Germans, between the hours of 10.00 p.m. and midnight, crashed through the light forces following the British battleships without the British C-in-C appreciating what was happening only 10 miles to the north of him.

In fact the Germans escaped. I quote again from Stephen King-Hall’s comments. He wrote:

It is even today . . . common to find it said that although the German fleet was not destroyed it ‘never dared come out again’.

I conclude by predicting that battleships will always defeat cruisers, and the cruiser about to be defeated tomorrow, like the German fleet, will never dare come out again. By that I mean that the Party opposite us, of which I do not have the honour to be a member, should choose to be led by a battleship rather than a light weight cruiser.

St George

– I draw to the attention of the House the serious threat to business posed by the Sydney metropolitan telephone book. There are a large number of books nowadays. They are supposedly cross referenced. It is difficult to find anybody who has a good word to say for the commercial telephone books. Last year the Minister for Post and Telecommunications (Mr Eric Robinson) visited the St George electorate. He spoke to a delegation of persons. The most vociferous complaints were made about the telephone books. Huge numbers of instances were drawn upon. I am pleased to say that the Minister accepted these representations and had an investigation made. I am told that something will be done. But it appears that it will be a minimal rearrangement of the facilities.

I point out to the House that in the electorate of St George there is a dentist who does not mind his name being used because he is thoroughly exasperated with the situation. He is one of up to forty or fifty persons seriously prejudiced in his business. Dr Rosenwax of Earlwood found that his name was not included in the yellow pages so he made an application for it to be included in the telephone book in the next year. He asked for some compensation. What did he get? All that happened was that the following year his name was not included again. So he wrote to me with a serious complaint. He said that he wanted the Government to pay compensation, that his solicitors were looking at the implications of extreme negligence, that he wanted to send out 4000 cards to his customers and that he required the Government to pay for them. The Government looked at the matter and eventually offered to give him 500 stamps and to have some cards printed. This is totally inadequate. I want the Minister to take up this matter and to provide ample compensation.

The next thing that happened to Dr Rosenwax was that, to cap it all, on 2 1 May this year he looked in the white pages directory and found that his name was spelt incorrectly and therefore was wrongly listed, that his business address and telephone number were listed in the residential section and the residential address was listed in the business section. He wants to know how long this is going to continue and what I am going to do about it. I feel that I must at least make a speech about it to draw it to the attention of the public. This doctor wants payments of postage for the notices which Telecom prepared and he wants rental payments for telephones at both addresses to be forgone for at least 2 years.

Since receiving this complaint other instances have arisen. There is a doctor in the vicinity who I am told has been similarly affected. If one rings his surgery one gets his mother and mum is becoming tired of having to refer people, often in urgent circumstances, to the doctor. But the most interesting example is this: If one rings up another doctor one gets a Chinese restaurant and his patients are becoming concerned. This is becoming something of a health problem because in Earlwood it appears nowadays that if one wants a doctor one will get either a Chinese restaurant or somebody’s mum. I suggest to the Minister that, as well as paying compensation, one month after the publication of the ordinary telephone book he should publish a bungles book in which there would be a supplementary edition listing all those persons who suffer from the bungling of Telecom Australia so that their businesses would not have to suffer for a full 12 months in any one year.

Mr DEPUTY SPEAKER (Mr Lucock)Order! It being 1 1 p.m. the House stands adjourned until tomorrow at 2 p.m.

House adjourned at 11 p.m.

Cite as: Australia, House of Representatives, Debates, 30 May 1977, viewed 22 October 2017, <>.