House of Representatives
20 September 1977

30^th Parliament · 2^nd Session

PETITIONS
- Broadcasting and Television Programs
- Private Nursing Homes: Pensioner Patients
- Estate Duty
- Whaling
- Albury-Wodonga Growth Centre
- Excursion Air Fares to Europe
- Metric System
- Abortions
- Tertiary Education Assistance
MINISTERIAL ARRANGEMENTS
QUESTION
- QUESTIONS WITHOUT NOTICE
QUESTION
- CAPITAL OUTFLOW
QUESTION
- AUSTRALIAN MANUFACTURING INDUSTRY: DEFENCE CAPABILITY
QUESTION
- FOREIGN EXCHANGE RESERVES
QUESTION
- NUCLEAR WASTE DISPOSAL
QUESTION
- FARM INCOMES: EFFECT OF INCREASED FUEL PRICES
QUESTION
- GOVERNMENT EXPENDITURE AND PUBLIC SERVICE STAFF CEILINGS
QUESTION
- CAPITAL OUTFLOW
QUESTION
- COMMUNICATIONS IN OUTBACK QUEENSLAND
QUESTION
- TAX INDEXATION
QUESTION
- MINING AND EXPORT OF URANIUM
QUESTION
- RHODESIA
QUESTION
- INTERNATIONAL LABOUR ORGANISATION
QUESTION
- NURSING HOMES: PENSIONER PATIENTS
QUESTION
- RURAL TELEVISION SERVICES
QUESTION
- ASSISTANCE TO ABORIGINES
DISTINGUISHED VISITORS
QUESTION
- SUPPORT FOR 1982 COMMONWEALTH GAMES
QUESTION
- PURCHASE OF COMMONWEALTH CARS
QUESTION
- ABORIGINAL HOUSING
COMMONWEALTH BANK REPORTS
WHEAT RESEARCH ACT
OVERSEAS TELECOMMUNICATIONS COMMISSION
PERSONAL EXPLANATIONS
AUSTRALIAN INDUSTRIAL RESEARCH AND DEVELOPMENT INCENTIVES BOARD
- Ministerial Statement
LEAVE OF ABSENCE
QUESTION
- PUBLIC SERVICE STAFF CEILINGS
ADJOURNMENT
- Death of Mr Steve Biko-Pensioners-State and Local Government Elections-The Parliament-Repatriation-South Africa-Commonwealth and State Relations- Trade Unions- Aboriginal Education
ANSWERS TO QUESTIONS UPON NOTICE
- Conciliation and Arbitration (Organizations) Act 1974: Complementary State Legislation (Question No. 211)
- Tabling of Annual Reports (Question No. 1138)
- Social Welfare Programs: Western Sydney (Question No. 1157)
- Home Nursing Organisations: Nurses and Subsidies (Question No. 1165)
- Treasury: Allegations of Payment to Member of Foreign Investment Division (Question No. 1220)
- Treasury: Allegations of Payment to Member of Foreign Investment Division (Question No 1221)
- Electoral Division of Sydney: Public Works Projects (Question No. 1234)
- Balance of Trade Between Australia and ASEAN Countries (Question No. 1237)
- Department of Defence: Civilian Employees (Question No. 1255)

Mr SPEAKER (Rt Hon. B. M. Snedden, Q.C.) took the chair at 2,15 p.m., and read prayers.

page 1283

PETITIONS

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

Broadcasting and Television Programs

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 because television and radio:

a) affect our social and moral environment,
are family media watched and heard by many children at all times, and
present too much explicit violence and sex, they therefore need stronger control than other media and the existing standards need stricter enforcement in both national A.B.C., and commercial sectors.

Your petitioners therefore humbly pray:

That the Australian Government will amend the Broadcasting and Television Act, in relation to both national and commercial broadcasters, to legislate

for adequate and comprehensive programs in the best interests of the general public,
for a ‘Dual System of Regulation’ enforced by the Australian Broadcasting Tribunal by internal regulation and external control,
for an independent consumer body to represent the best interests of the general public, and
for immediate and effective penalties to be imposed for breaches of program and advertising standards.

And your petitioners as in duty bound will ever pray. by Mr Sinclair, Mr Dobie, Mr Graham and Mr McLeay.

Petitions received.

Private Nursing Homes: Pensioner Patients

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

That many pensioners who are holders of the pensioners health benefit card, have suffered undue hardship as inmates of private nursing homes, because the Federal Government subsidy was insufficient to meet the charges as laid down.

Many pensioners whose spouse was an inmate of the private nursing homes suffered poverty in an endeavour to sustain their partner while in the nursing home.

Only in rare cases was the statutory minimum patient contribution as laid down adhered to.

That the telephone was a matter of life and death to many pensioners, but because of the cost of installation of the telephone many are unable to afford the installation.

That those pensioners who have only their pension and very little else to live on and are forced to pay high rents, are in many cases living in extreme poverty.

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

Make sure that subsidies paid to private nursing homes are such that each pensioner holding a pensioners health benefit card will pay the private nursing home no more than the statutory minimum patient contribution, which will allow six dollars per week to be retained by the pensioner patient for their personal use.
That a pensioner holding a pensioner health benefit card shall have a telephone installed free of charge, or at a very nominal charge.
That those pensioners who have only their pension and very little else to live on, shall receive a subsidy to assist them. The subsidy to be governed by a Means Test.

And your petitioners as in duty bound will ever pray. by Mr Sinclair, Mr MacKenzie, Mr Les McMahon and Mr Ian Robinson.

Petitions received.

Estate Duty

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

That where whole or part of a deceased estate passes to the surviving spouse it should be free from federal estate duty.

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

Petitions received.

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

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 Newman.

Petition received.

Abortions

To the Honourable Speaker and Members of the House of Representatives in Parliament assembled. The Petition of the undersigned citizens of Australia respectfully show that:

Abortion has become a multi-million dollar enterprise in Australia despite the fact that the Medical Practice Clarification Bill 1973 was overwhelmingly rejected.

The multi-national giant, Population Services International, which operates in Sydney is now expending its business to include Canberra. In 1976 alone, over 46,000 abortions were being paid for under the existing medical benefits schedule, which stipulates the benefit payable for medical services under both Medibank and the private health insurance funds.

Item No. 6469-(the evacuation of the contents of a gravid uterus by curettage and suction curettage) now attracts a benefit of $65. In 1976 close to $5m were spent to destroy unborn children.

Under the ‘Abortion Item’ No. 6469 abortion on demand is now being paid for from public monies, i.e. contributions to the existing health funds.

Your petitioner therefore humbly pray that the Government takes action:

1 ) To stop payments of abortion claims under Item no. 6469 of the Medical Benefits Schedule, except in the case that the abortion had been carried out in a hospital, and it being a certified medical procedure of preventing the death of the mother.
To stop the funding and operation of any so called pregnancy help service or health centre which offers abortion on demand.
To financially assist those pregnancy help services which provide a genuine support to both mothers and their unborn children, e.g. Birthline-Adelaide.

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

Petition received.

Tertiary Education Assistance

To the Honourable Speaker and Members of the House of Representatives in Parliament Assembled. The petition of the undersigned students, parents, teachers and citizens of Australia respectfully showeth:

That the decision of the Government to withdraw all forms of financial assistance to students of non-State tertiary institutions in the main, business colleges, is in total conflict with stated Government education policy.

The decision will result in a shortage of places for training secretarial and clerical students and an inordinate demand upon the State government technical education systems.

At a time of severe economic disruption, this action must lead to an unnecessary worsening of the current employment situation for school leavers.

Your petitioners, therefore, humbly pray that the Commonwealth Government will act immediately to reverse its decision.

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

-Is the Prime Minister aware that the merchant banks are receiving daily requests for funds from the Australian subsidiaries of large foreign based corporations? Is he aware that the Australian subsidiaries are being instructed by their parent companies to transfer these funds out of Australia because of their lack of confidence in the Australian dollar? When will this Government put a stop to these private outflows of speculative capital?

Mr MALCOLM FRASER:
LP

-The honourable gentleman continues in the path of deliberately trying to create more speculation and concern. I certainly am not going to aid him in that process.

page 1285

QUESTION

AUSTRALIAN MANUFACTURING INDUSTRY: DEFENCE CAPABILITY

Mr ALDRED:
HENTY, VICTORIA

-The Minister for Productivity will no doubt be aware of a recent report to the Defence Minister detailing the grossly inadequate capability of Australian manufacturing industry for defence production. Can the Minister inform the House of what steps are being taken to improve the efficiency and effectiveness of manufacturing industry to overcome this inadequate capability, including measures taken in respect of the Government factories that form a significant part of the responsibilities of his portfolio? In particular, what is being done to better the operation of the Government Aircraft Factory to improve the way in which its products are marketed, and to achieve the best possible use of the Government Aircraft Factory within the context of a rationalisation of the aircraft industry?

Mr MACPHEE:
Minister for Productivity · BALACLAVA, VICTORIA · LP

– The honourable member has referred to the report to my colleague, the Minister for Defence. Of course, I certainly cannot make a specific comment upon that report. However, I would say that all industrialised countries are experiencing gaps in their technologygaps which are due to the rapid rate of growth in technology and also the high cost which is associated with it and the installation of the capabilities that go with it. Of course, if Australia considers its small economies of scale, it is realised that we have a serious problem indeed. So our policy within the government factories has been to provide a basic capability so that we can adopt and adapt new technology when the need arises. The honourable member asks about productivity initiatives. We have installed within the factories numerically controlled machine tools. We have begun project management programs. We have improved plant and work place design and communication within the plants, and we have given great attention to industrial safety programs.

Within the Government Aircraft Factories, we have adopted all of those policies. In addition, we have engaged outside consultants to ensure that those factories are able to compete with private enterprise. We have adopted marketing programs, especially in respect of the Nomad aircraft. We have done a lot of work for the Boeing Corporation under the offset program, and that has helped the Government Aircraft Factories to tender competitively with private enterprise. There is, I believe, evident in the public comment upon the report to my colleague a general willingness to criticise Australian technology. I think Australians ought to remind themselves that we have within the Government Aircraft Factories produced the Ikara, the Jindivik, the Nomad, and InterScan, the microwave landing system. All of these projects have received world acclaim. They are all fine pieces of technology which have brought spin-offs for private industry in Australia as well as employment opportunities.

Shortly after taking up my position as Minister for Productivity, I appointed as Chairman of the Production Board which supervises the 12 Government factories, Mr Robert Millar, a highly respected Melbourne industrialist who has great experience in the private sector. He has made a considerable contribution towards the improvement of productivity within the Government factories.

page 1285

QUESTION

FOREIGN EXCHANGE RESERVES

Mr STEWART:
LANG, NEW SOUTH WALES

-Is the Prime Minister aware that Australia’s foreign exchange reserves fell by $209m in the first two weeks in September and that that slide in our reserves has persisted unbroken for the past 17 weeks? Is it a fact that this decline cannot be accounted for alone by a weakness in the current account and that it must therefore contain a large speculative element? If so, what steps have been taken or are to be taken to curb this speculation against the dollar?

Mr MALCOLM FRASER:
LP

-The answer to the first part of the honourable gentleman’s question is yes. The second part of the question should be directed to many members of the honourable member’s own party, since there is a deliberate attempt by some members of that party to promote that very speculation.

page 1285

QUESTION

NUCLEAR WASTE DISPOSAL

Mr BUNGEY:
CANNING, WESTERN AUSTRALIA

-Can the Prime Minister inform the House whether the International Atomic Energy Agency has expressed a view on the safe disposal of nuclear waste?

Mr MALCOLM FRASER:
LP

-The International Atomic Energy Agency has expressed a view on that matter. I would like to come to that fairly shortly because the view that the International Atomic Energy Agency has expressed is not dissimilar to the position which has been taken by the Government. I am very glad that that is the position. There was a most important statement by the Leader of the Opposition last night which seemed to indicate that the Government and the Opposition have the elements of a bipartisan policy in relation to these matters. I believe that the statement made by the Leader of the Opposition was significant and, to a significant extent, responsible, which is not always the case. So that the nature of the policy implications for Australia can be understood it will be necessary for me to read some parts of the questions and answers in the interview with the Leader of the Opposition. The question was asked:

Do you think it is proper for your Party to say it will refuse to honour any new uranium agreements? This was something you were quite a stickler on when you were in government.

A significant part of the answer to that question was:

We have made it very plain that we do not think it appropriate, we don’t think it responsible to let Australian uranium go on the world market until there, are in operation safe methods of storing or disposing of the nuclear wasteThere are not at the moment.

The Leader of the Opposition went on to say that he had made it plain that his party would not honour contracts which are in breach of that position. Then there was a further question:

But you also said it wasn’t just the waste disposal problem in your speech to the nation, you also were quite specific that there would have to be adequate safeguards in terms of nonproliferation.

The answer was:

Yes, that’s true, but the big problem, I believe, now, is the storage and disposal of the nuclear waste- I think that is the unresolved issue.

That answer itself needs noting. I believe it indicates that the question of proliferation, and safeguards in relation to it, are resolved. The interviewer went on to say that it was one thing to be in opposition and another to be in government. The answer was:

Yes, I suppose you could say that, but I still say that it is irresponsible to allow this substance to go on the world market when there are no safe ways of disposing of the waste.

There was a further question:

Well, in terms of the ALP policy, what would be the mechanism and who would make the decision that the safeguards had been developed, that the technology had achieved that breakthrough?

Obviously that is in relation to the question of waste. The answer was:

The International Atomic Energy Agency.

The next question was:

And you would accept . . .

And the reply was:

Yes, certainly. And our efforts, as a government, will be to get international safeguards supervised, policing, audited by the IAEA.

Of course, that is just what it is doing. I shall read one final question and answer.

And would you expect the bulk of the Party, say at the next conference or the conference after to accept . . .

The reply was:

If the IAEA said that there were adequate safeguards to monitor the storage and the disposal of the waste, the radioactive waste, from nuclear power generation. Of course the Party would accept it.

At the Salzburg conference Dr Eklund, the Director-General of the International Atomic Energy Agency had this to say:

National programs for the management of radioactive wastes are all investigating the possibilities of vitrifying the liquid-

Mr Bryant:

-I take a point of order, Mr Speaker. Do the restrictions you have asked Ministers to apply to the length of their answers apply to the Prime Minister or has he some special right?

Mr SPEAKER:

-It is the practice of the House to give an extension of courtesy to the Prime Minister and the Leader of the Opposition.

Mr MALCOLM FRASER:
LP

– I shall start Dr Eklund ‘s statement again:

National programs for the management of radioactive waste are all investigating the possibilities of vitrifying the liquid highly radioactive waste resulting from reprocessing and disposing of the product in geological formations.

This is the critical sentence-

Technology is now available for the safe treatment, conditioning and storage of essentially all the hazardous radioactive waste products from the nuclear fuel cycle.

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

– They are nowhere in operation, as Dr Eklund told me in Vienna last June.

Mr MALCOLM FRASER:

-Today the advice of the Australian Atomic Energy Commission was sought on whether the view of the International Atomic Energy Agency expressed at Salzburg had in any sense been varied. I know that the honourable gentleman visited there in June after the Salzburg conference. I hope the breakthrough in his thinking in this matter was not just a momentary one last night. In the past he had indicated that safe methods and techniques for the storage and disposal of waste were not available. Quite plainly, the International Atomic Energy Agency has said that they are known.

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

– And Eklund says that they are not in operation.

Mr MALCOLM FRASER:

– It is a question of whether the knowledge and techniques are known.

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

– They are unproven.

Mr SPEAKER:

Mr MALCOLM FRASER:

-Let me repeat Dr Eklund ‘s statement:

Technology is now available for the safe treatment, conditioning and storage of essentially all the hazardous radioactive waste products from the nuclear fuel cycle.

If the honourable gentleman cannot understand that, let me repeat it again. It is a very clear and concise statement. Dr Eklund said:

Technology is now available for the safe treatment, conditioning and storage of essentially all the hazardous radioactive waste products from the nuclear fuel cycle.

Then he went on to point out what has been known for a very long while:

What is now required is the practical demonstration of large scale geological disposal.

The knowledge exists. The future course that countries will take in this matter is as certain as it can be. In these circumstances it is utterly irresponsible for the Opposition to persist with its present policy to maintain a fiction- and it is a fiction.

page 1287

QUESTION

FARM INCOMES: EFFECT OF INCREASED FUEL PRICES

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

-I am delighted that the honourable member for Darling has asked me this question. It gives me a chance to explain to him and to the other members of the Australian Labor Party the consequences of Labor policies applied over three years. Australia progressively would have been so dependent on imported fuels that we would have been forced into a position of total import parity within the course of the next five years if it had not been for a change of policy by this Government. If we had not been forced into a position of total import parity we would have been getting very close to it. For the honourable gentleman’s benefit I would like to explain that the reason for the crude oil price policy change was to ensure that we would encourage greater exploration, development and exploitation of Australia’s crude oil resources. Indeed it might well be that through the utilisation of other energy sources we can contain future cost increases not just to the rural community but to the whole Australian community. If we had not adopted a policy designed to encourage the utilisation of energy resources in

Australia we would have been in a hopeless position which, of course, was the full intention of the Labor Administration as a result of the policies it pursued in every direction. It is true there will be a temporary increase in the price input generally for people in the rural sector.

-The Minister for Post and Telecommunications will be aware that as a result of his visit to my electorate in March this year the Australian Telecommunications Commission has been investigating the connection of outpost radios to the telephone service through base stations of the Royal Flying Doctor Service. Can the Minister advise the progress of these investigations? Can he say why such a relatively simple investigation has taken so long to complete?

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

-I well remember being in the honourable member’s electorate earlier this year and going with him to look at the communications system at the Royal Flying Doctor Service base. There is no doubt that if we could get an interface between that outpost service and the Telecommunications Commission it would assist immensely in communications in the outback part of his electorate. It is this Government’s policy, as distinct from that of our predecessors, to be concerned about providing increased facilities for communication services in all parts of Australia.

Mr Bryant:

– You closed down radio stations.

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

-The Government of which the honourable member for Wills was a member had an abysmal record in regard to rural industries and communications. It did everything to prejudice improvement in those areas. As to the particular matter about which the honourable member for Leichhardt inquired, this has gone on too long. I have had discussions with members and management of the Telecommunications Commission. The Commission did meet in Brisbane, I think it was last week, and it will be having further discussions with officials of the Royal Flying Doctor Service. I have asked the Commission for a full report covering its attitude and competence to arrange this matter within the next two weeks. Like the honourable member for Leichhardt, I am determined to see that communications systems are improved in his electorate and anywhere else throughout Australia.

page 1289

QUESTION

TAX INDEXATION

Mr JAMES:
HUNTER, NEW SOUTH WALES

– I direct my question to the Prime Minister. Does he share the concern of the honourable member for Tangney that the Government has failed to honour its election promises and that tax indexation in the Budget did not go far enough? Does he intend to emulate the example of the honourable member and retire at the next general election?

Mr MALCOLM FRASER:
LP

– I would find it difficult to understand how tax indexation could go further than to cover taxpayers fully for the effects of inflation, which is precisely what it did. At the same time I thank the honourable gentleman for the opportunity to state again that the tax reforms announced in the Budget by the Treasurer are probably the most far reaching and fundamental taxation reforms that have been introduced in any Western country, and they will be of great advantage to this country and to all taxpayers in Australia. The more often that the honourable gentleman asks questions that enable those points to be made in answer, the better I will be pleased.

page 1289

QUESTION

MINING AND EXPORT OF URANIUM

Mr HODGES:
PETRIE, QUEENSLAND

-Is the Minister for National Resources and Minister for Overseas Trade aware of continuing claims that there should be a referendum in Australia as a means of settling the dispute over the mining and sale of Australian uranium for peaceful purposes? Does the Government have a view on the referendum proposals?

Mr ANTHONY:
Deputy Prime Minister · RICHMOND, NEW SOUTH WALES · NCP/NP

-There are two aspects at which one should look when examining the referendum issue: Firstly, the suggestion of a referendum has been put forward by the Australian Council of Trade Unions, in a threatening and challenging way, to a government exercising its right to make a decision on a very important issue. The Government has no intention of bowing to the ultimatum of the ACTU. It believes that it has a responsibility to investigate the issues thoroughly, to source all the information it can and then to make a decision- and this it has done. Secondly, although a referendum may sound to some people an easy or ideal way to resolve the question, it oversimplifies the matter. In fact, it is frighteningly simplistic.

Mr Hurford:

– Margaret Thatcher thinks it is a good idea to have a referendum.

– Once again it ‘is a question of choice. If pensioner patients want to insure themselves for doctor of choice they can do so by taking out a subsidised hospital only insurance which will cover them for a choice of doctor in a hospital or for nursing home benefits. It is a question of choice for the nursing home patients. I am not aware of any great confusion amongst nursing home patients at this point. I was aware of a great deal of confusion amongst nursing home patients during the winter recess because of a campaign that was launched by some private health funds which were trying to make a case that the Government would abandon subsidies to private nursing homes and nursing home patients. That was not true. During the winter recess I announced that the Government would provide higher benefits for nursing home patients and that the health insurance funds would be responsible for paying the benefits to those patients who were insured privately or with hospital only insurance. Those patients who are not insured will receive automatically the same higher benefits from the Department of Health. There is no occasion for private nursing home patients to insure in order to obtain their benefits. Let that be quite clear. If they wish to insure themselves for doctor of choice and treatment of medical conditions, they have the right to do so and the insurance fund will pay the benefit, not the Commonwealth Government.

page 1292

QUESTION

RURAL TELEVISION SERVICES

Mr KATTER:
KENNEDY, QUEENSLAND

-Can the Minister for Post and Telecommunications at this stage indicate when television facilities will be provided for a number of electorates such as Kennedy, Maranoa, Capricornia, Dawson and Kalgoorlie, which do not yet receive television transmissions?

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

-It is true that a number of electorates throughout Australia do not have adequate television viewing facilities. I think the honourable member mentioned a number of electorates in Queensland. I have considered the situation in those areas and in the electorate of Kalgoorlie, which I think was mentioned also. There is a problem in virtually every State in Australia. In the present Budget we have been able to obtain an allocation of funds, and work to provide increased faculties will commence in a number of electorates. I have to point out that not only is there a restraint upon the amount of money available but also a limit to the engineering capacity of the Postal Department, the Australian Telecommunications Commission and others.

Within the next two to three weeks I shall be taking to the Government a suggested three-year program, which will give all electorates a very good indication of the sort of program that we envisage. I recognise that just to use traditional means would not solve all the problems. The enormous cost of extending television services throughout Australia by traditional means would, of course, be prohibitive. That is why with the use of technology and other initiatives I can see greater opportunities in the years ahead. I hope that the honourable member is aware that I am currently considering one or two initiatives. I am certain that before too long, I will be able to make a statement to the Parliament which will give even greater encouragement to people and help them to understand that this Government is committed to improving communication, in whatever medium, throughout the Australian community.

page 1292

QUESTION

ASSISTANCE TO ABORIGINES

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

– I ask the Minister for Aboriginal Affairs: Is it a fact that actual expenditure on Aboriginal assistance programs has decreased by 22 per cent since the 1975 Budget, contrary to undertakings given by the former Attorney-General? If that percentage is not correct, what in fact has been the percentage reduction since the 1975 Budget? I ask also: Is it a fact that before Aboriginal organisations can obtain a portion of the Government’s allocations the Auditor-General requires that these organisations be incorporated under a statute? Is Queensland the only State that has refused to incorporate an Aboriginal organisation under a State statute and is the North Queensland Land Council thus unable to secure either incorporation or assistance? Why has this Parliament’s Aboriginal Councils and Associations Act, which was based on a Bill passed by this House in November 1975 and which received assent on 15 December 1976, not yet been proclaimed? How much longer will it be before this uniform legislation is brought into operation?

Mr VINER:
Minister for Aboriginal Affairs · STIRLING, WESTERN AUSTRALIA · LP

– I thank the honourable gentleman for his question, which covered a number of matters. If in my answer I omit to refer to any of the matters raised I shall have them checked out and let him have the details. I do not have at my fingerprints the precise percentage comparisons between appropriation and expenditure since 1975, but I shall check the figures and let the honourable gentleman know whether his percentage is accurate. I remind him that I have supplied all honourable members and senators with a set of information papers covering expenditure on Aboriginal Affairs for the period 1974 to 1977 and allocations for 1977-78. 1 venture to suggest that it is the most comprehensive set of figures ever provided by a Minister for Aboriginal Affairs to the members of this House and of the other place.

The honourable gentleman referred to the incorporation of Aboriginal organisations for the purposes of receiving funds from the Commonwealth. It is a requirement that organisations be incorporated not only for the purposes of financial management of Commonwealth moneys but also because of the simple fact, as the Leader of the Opposition would appreciate, that incorporation provides a means for the Government to receive a valid receipt from the organisation rather than from any particular individual.

I do not know whether the North Queensland Land Council has applied under Queensland legislation to be incorporated either as a cooperative or as a company. There were instances in earlier years of some difficulty being experienced in some Aboriginal organisations in Queensland registering as a co-operative. So, it is not a fact that that body has not received any funds from the Commonwealth because it is not incorporated. A number of requests have been made to me for assistance to Aboriginal organisations in regard, for example, to the commission established by the Queensland Government to look at future policy in Queensland. I have received requests also from other organisations which are interested in putting forward submissions to that body for the purpose of advising the Queensland Government. I have had to consider each of those applications in order to determine which is the most worthwhile body to support I have that matter on my plate at the present time and I will be dealing with it.

The honourable gentleman also raised the matter of the proclamation of the Aboriginal Councils and Associations Act. I hope to proclaim that Act very shortly. A good deal of work has had to go into establishing the administrative structure, including the central registry, deputy registries and the like, before the Act can be proclaimed. That work has almost been completed. I know that Aboriginal organisations are anxious to have it proclaimed so that they can incorporate under Commonwealth legislation. As I say, I hope that I can bring that about very shortly.

page 1293

DISTINGUISHED VISITORS

Mr SPEAKER:

-I have to inform the House that we have present in the Gallery this afternoon the Justice Committee of the Swedish Parliament, led by Mrs Astrid Kristensson, Chairman of the Committee. On behalf of the House, I extend a very warm welcome to the visitors.

Honourable members Hear, hear!

page 1293

QUESTION

SUPPORT FOR 1982 COMMONWEALTH GAMES

Mr Peter Johnson:
BRISBANE, QUEENSLAND · LP

-My question is directed to the Prime Minister. When will the Commonwealth Government make a decision on financial support for the 1982 Commonwealth Games to be held in Brisbane? I ask the question in view of the interest of Queensland people in this great event.

Mr MALCOLM FRASER:
LP

-The Commonwealth Government had for some time been pressing the Queensland Government for details of the way in which the estimates for the 1982

Commonwealth Games were drawn up. Estimates had been given and the Commonwealth wanted to be assured to the maximum extent possible that the estimates were validly based. Having examined the matter and having had further correspondence with the Premier of Queensland in relation to it, the Commonwealth has decided that $10m will be made available towards the staging of the 1982 Commonwealth Games. The Commonwealth is making that sum available to the Queensland Government in association with the Brisbane City Council and the Commonwealth Games Foundation, to give the organisers the maximum flexibility in the way in which the funds are spent. They can therefore exercise their own judgment in that regard.

I think it ought to be noted that the $10m is significantly more than the sum the Commonwealth provided for the 1956 Olympic Games held in Melbourne or the 1962 Commonwealth Games held in Perth. I believe that it will be a very significant contribution. The Commonwealth Government is delighted to join with the Queensland Government and the other bodies associated with this very worthy enterprise. Following the provision of funds for sports development and assistance in the present Budget and also following the announcement of the establishment of the Sports Advisory Council, this grant is further evidence of the importance that the Commonwealth Government places on sport generally. I hope that the grant will be well received in Queensland. I congratulate the honourable member on the timing of his question.

page 1293

QUESTION

PURCHASE OF COMMONWEALTH CARS

Mr COHEN:
ROBERTSON, NEW SOUTH WALES

– I ask the Minister representing the Minister for Administrative Services: In view of the Government’s stated interest in conserving Australian energy, which was repeated here today by the Deputy Prime Minister and the Prime Minister, can he explain why the Government has just purchased a fleet of cars for the servicing of Parliament House which are guzzling petrol at the rate of 1 1 to 1 2 miles per gallon?

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

– I do not know where the honourable member got his figures for the petrol consumption of the cars.

Mr Cohen:

– From the Commonwealth drivers themselves.

Mr STREET:

– I shall check with my colleague who is responsible for this area about the petrol consumption of the cars servicing Parliament House. I am sure that the honourable member for Robertson would not wish to see the services provided for members of Parliament become inadequate in any way. I am sure that my colleague has that very much m mind.

page 1294

QUESTION

ABORIGINAL HOUSING

Mr RUDDOCK:
DUNDAS, NEW SOUTH WALES

-Is the Minister for Aboriginal Affairs familiar with claims for housing in Sydney by the Dhurruk tribe? Has he seen the comments of the New South Wales Housing Minister, Mr Mulock, that there was little he could do as Aboriginal funding was a federal matter. Are not Aboriginal people entitled to a fair share of general housing funds in New South Wales in addition to the generous programs of the Department of Aboriginal Affairs?

Mr VINER:
LP

-I thank the honourable gentleman for his question. It provides me with an opportunity not only to answer the New South Wales Minister for Housing but also to point out to that Minister and this House that in the current financial year the Commonwealth is providing to the State Government grants of $2,590,000 for housing in New South Wales through the State Housing Commission. In addition it is providing grants-in-aid to Aboriginal organisations of 3,260,000. The honourable gentleman will appreciate that a considerable amount of Commonwealth money is going into Aboriginal housing in New South Wales. Programs for housing through the New South Wales Housing Commission are worked out by agreement between the New South Wales Minister for Housing and my regional office. It is always open to the New South Wales Minister for Housing to seek to reallocate funds, for example, to the western districts of Sydney, if he considers that that is a matter of sufficiently high priority.

Mr Ruddock:

– He could use some of his own money, too.

Mr KING:
Wimmera

– I wish to make a personal explanation.

Mr SPEAKER:

-Yes. I claim to have been misrepresented in an article in the National Times of 19-24 September entitled: ‘Bush Crisis: What’s Being Done for Farmers’. My attention has been drawn to part of a paragraph which states:

Later, in the parliamentary dining room, the Country Party member for Riverina, John Sullivan, joined the fray and verbally attacked Fraser over the Government’s failure to help rural producers.

That is not true. I did speak to the Prime Minister but the conversation was casual, amicable and brief.

page 1295

AUSTRALIAN INDUSTRIAL RESEARCH AND DEVELOPMENT INCENTIVES BOARD

Ministerial Statement

Mr MACPHEE:
Minister for Productivity · Balaclava · LP

– Pursuant to section 40 of the Industrial Research and Development Incentives Act 1976 1 present the annual report of the

Australian Industrial Research and Development Incentives Board for the year 1976-77. Mr Speaker, I seek leave to make a short statement relating to this report.

Mr SPEAKER:

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

Mr MACPHEE:

-The report covers the first year of operation under the new Industrial Research and Development Incentives Act 1976. In introducing the new Act in 1976, it was the Government’s intention that a main thrust of the program should be in the area of project grants, so that support could be directed to those research and development projects showing technical and commercial promise and offering the greatest benefits in the national interest. In view of the fact that payments, as distinct from commitments, to companies under the new program have only commenced during the current financial year, it is still too early to provide an appreciation of the effectiveness of the legislation. However, this matter is continually under review and I have already received very useful comments from a number of sources, including companies, industry associations, professionals working in the research and development field and from associations of such professionals.

Since receiving the report now being tabled, my attention has been drawn to a statement in the other place on 7 September 1977 by Senator Jessop on behalf of the Senate Standing Committee on Science and the Environment following that Committee ‘s examination of the Board ‘s 1975-76 annual report. The Committee recommended to me that in future the report should include an assessment of the value of assistance given in relation to the objectives of the Act. It has clearly not been possible to include such an assessment within this report. I will, however, draw the Committee’s recommendation to the attention of the Chairman of the Board so that appropriate action can be taken for its inclusion in future reports.

I take this opportunity to mention a matter which has been causing me some concern recently. Correspondence addressed to me by companies which have applied for grants has revealed a number of cases in which consultants, claiming to have expert knowledge of the grants legislation, have advised companies badly in relation to grant applications. These clients have been led to expect grants much larger than their real entitlements, and in some cases could have been out of pocket after paying what appeared to be excessively high consultancy fees. These remarks are not intended to refer to all consultants operating in this field, but I would advise those companies which feel the need to engage consultants to select them with care. In this connection I point out that the Board issues explanatory notes containing extensive information on the legislation and associated procedures. The Board s staff is readily available to furnish advice on any points of difficulty which may be encountered by individual companies who are considering applying to the Board for a grant.

Mr YOUNG:
Port Adelaide

-by leave-We on this side of the House always support enthusiastically anything that is done by the Government in the field of research and development. Time and again in this Parliament we have had to be critical when the Government has seen fit to make across the board cuts in appropriations in this area. It has been our role to point out to the Government that, in terms of research and development and in terms of the future consolidation of many of our industries, the Government must play an important part in ensuring the viability of those industries. At the moment what we are doing in Australia is really only scratching the surface. We have derived a great deal of our technology from companies that have come into this country from overseas. To that extent, as the Jackson Committee pointed out, our industries have advanced a great deal as a result of the activities of those trans-national companies. None the less, overseas companies should not be allowed to set the ceiling on the research and development that may be done or to set the level of technology that may be invested in our industries. That is a decision that this Parliament and this country must make.

Our commitment to research and development is a wholesale commitment because we realise the importance of it and its importance in relation to the ambitions of a lot of young people who are completing a very high standard of education in Australia. Avenues ought to be available for a lot of these people to work in this area. When compared with the moneys that are being spent by companies overseas on their research and development programs what we are doing here in Australia looks rather minute. The Minister for Productivity (Mr Macphee) made the point that some consultants were wrongly advising companies. Perhaps the Government should look at its own role in terms of advising those socalled consultants before they go out and give information. It is the sort of thing that has happened with other legislation, where the Government has made available experts to interpret legislation to the people concerned and thus made sure that when companies are seeking guidance on these matters they are given the correct information.

I also draw the Minister’s attention to a question on this very subject which was put on notice by the Leader of the Opposition (Mr E. G. Whitlam) and to the answer he received from the then Minister for Business and Consumer Affairs on 15 March. The question related to the recommendation- twice- by the Industries Assistance Commission that the question of research and development ought to be referred to an inquiry conducted by the Industries Assistance Commission itself. Whilst the Minister replied positively to the questions that the IAC had indeed made such recommendations in its annual reports he merely said that the question of the reference was something for the Minister for Productivity to look at. That is now 6 months ago, so we ask the Minister these questions: What has happened in relation to the recommendations of the IAC? What is the intention of the Government? Does he not think that the IAC has a very important role to play in this area because much of the work it does borders on the necessity for greater detail in research and development in this country? Whilst pointing out the inadequacies of what the Government has done over the past two years, we on this side of the House will continue, as I have said, to support enthusiastically anything that is done in this area to assist industry to become more internationally competitive and to perhaps consolidate its role in the Australian economy.

page 1296

LEAVE OF ABSENCE

Motion (by Mr Sinclair) agreed to:

That leave of absence for one month be given to the honourable member for Indi (Mr Holten) and the honourable member for Wakefield (Mr Kelly) on the grounds of parliamentary business overseas.

Motion (by Mr E. G. Whitlam) agreed to:

That leave of absence for one month be given to the honourable member for Batman (Mr Garrick) on the grounds of parliamentary business overseas.

page 1296

QUESTION

PUBLIC SERVICE STAFF CEILINGS

Discussion of Matter of Public Importance

Mr SPEAKER:

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

The disruption to the effective provision of public services resulting from the Fraser Government’s continual reduction of staff ceilings for government employment.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the Standing Orders having risen in their places-

Mr WILLIS:
Gellibrand

-Recent reports tabled in this House have shown conclusively that this Government’s policy of continually reducing staff ceilings is doing enormous damage to government administration in this country. These reports have confirmed the many previous indications of growing inefficiency in the provision of public services because of these arbitrary reductions in the number of government employees. As a result of this stupid policy vast amounts of government moneys are being squandered. There are increasing, and in some cases enormous, delays in the supply of services. There is growing stress, tension and industrial disputation in the Public Service as a result of increased work loads, loss of certain employment rights and staff imbalances, and there is a reduction in the quality of services provided.

How did all this come about? The original rationalisation for staff ceilings was in our opinion largely ideological. The Government came into office committed to reducing the size of the public sector and to building up the whole myth about the public sector, both in terms of the moneys expended on it and the efforts of those who worked within it. The Government tried to promote to the Australian people an image of a Public Service which was lazy and fat and in which there was plenty of room for wielding the knife. So when it took office it commenced in fact to wield the knife and to start to reduce the number of public servants. While doing this the Government said to the people of Australia: You see, there is no reduction in services’. In fact, of course, as we will see later, there was a very substantial reduction in both the level and quality of services provided because of the very severe reductions introduced by this Government.

To be fair about the history of staff ceilings, however, I should not try to leave the impression that they were originated by the Fraser Government. In fact, they were first introduced by the Menzies Government in 1951 in quite a severe form. But they were then let lapse and were not revived again until the Gorton Government restored them in 1970. They were continued under the McMahon Government and also by the Whitlam Government. But except for the Menzies staff ceilings in 1951 all of these staff ceilings allowed for growth in the Public Service and the remainder of government employment. The Whitlam Government gradually reduced the allowable growth but it still allowed for some growth. Even in 1975 when it had reduced the level of staff ceilings it allowed for a growth of 1.5 per cent in 1975-76. However, the Whitlam Government did not see 1975-76 out.

When the Fraser Government came in, within 10 days of being elected the Treasurer (Mr Lynch) announced that the Public Service numbers were to be frozen at the level they were at the end of November. Then on 9 February 1976 it set a limit for the Public Service of 155,000 or just under to be reached by 30 June 1976. This was later varied up to 159,000 to allow for increased Public Service Act coverage. But still the pressure was there for reductions. The result was that on 30 June 1976 the number of full time employees covered by the Public Service Act, after allowing for variations in coverage by the Act during the year, was decreased by 4.2 per cent or a little over 6,000. The Government boasted that all this was being achieved without reduction in services or their quality. But this was either self delusion or deliberate deception of the public.

On 14 June 1976 the Prime Minister (Mr Malcolm Fraser) announced a further lowering of staff ceilings by 1.6 per cent for the year 1976-77. That clearly was a matter of concern to the Public Service Board. In its 1975-76 annual report the Board stated:

There is, however, a point beyond which restraints may impede efficient administration and lead to a decline in the quality of services provided by the Government.

So there was the Public Service Board in its report for 1975-76 saying in mid 1976 that staff ceilings, if taken too far, would impede government administration and lead to a reduction in the quality of services provided. Despite this the Government continued with its further reductions in staff ceilings. It also ignored the report of the Royal Commission on Australian Government Administration. This report became available in August 1976. I shall briefly quote from the section of the report dealing with staff ceilings. At page 242 the report states:

Considerable criticism has been directed at staff ceilings as a control device. The Commission initiated a research project on the use of staff ceilings and the results of this work are published with our Report. Much of the criticism is endorsed by the consultant’s report which urges that more effective staff reductions can be achieved by longer term planning and that such planning is compatible with targets for reductions at least on established working units.

Mr Wentworth:

– I rise to order, Mr Deputy Speaker. Under Standing Order 107 the honourable member was supported by eight members of his party. There are at present only three members of his party -

Mr DEPUTY SPEAKER (Mr Lucock)Order! The honourable member will resume his seat.

Mr Wentworth:

-Sir I am asking you whether, perhaps-

Mr DEPUTY SPEAKER:

-There is no point of order. The honourable member knows it. The honourable member is debating the matter and he will resume his seat.

Mr WILLIS:

-Thank you, Mr Deputy Speaker. The Royal Commission continued:

Such targets could be incorporated in the guidelines issued to departments for the preparation of Forward Estimates.

The Commission then recommended ‘that staff ceilings in their present form be abandoned and that Cabinet incorporate in their guidelines for the formulation of the Forward Estimates targets for manpower use in the years being covered ‘.

So the opinion of the Royal Commission on Australian Government Administration was quite clear. It recommended the scrapping of staff ceilings and instead the introduction of manpower planning in the Public Service. This was a very sensible recommendation. Of course, the study to which it referred- the one which it commissioned-covered the period not of the Fraser Government but of the Whitlam Government, and it made many severe criticisms of the use of staff ceilings under the Whitlam Government. But they at least allowed for some growth in the Public Service, as I mentioned. The staff ceilings as introduced by the Fraser Government, of course, have not allowed for such growth. They have in fact been reducing the level of the Service. Nevertheless, it is instructive to look at one short criticism by Mr Wiltshire, the consultant referred to, in respect of the severe consequences of staff ceilings. At page 124 of Appendix Volume 1 of the report of the Royal Commission on Australian Government Administration he said:

One of the most serious consequences of staff ceilings relates to the actual areas which have been cut back by departments, and the significance of these cutbacks. Trainees and apprentices are the first to suffer and this has tremendous long term ramifications. Typists and stenographers are another area for the first stroke of the knife and this results in an imbalance in departments, with admirals cleaning the latrines rather than planning strategies and steering the ship. Even more serious is the slackening in attention to control and audit measures in departments to save on numbers. This has led to financial and legal complications, and has serious implications for the accountability of government, not to mention the fact that it allows undeserving rogues to take advantage of weaknesses in the system for their own ends (the rogues being clients of the departments and not employees). In all these areas the Public Service Board has exhorted departments to maintain a balanced approach to cutbacks and it seems that this was more feasible in years of higher ceilings but extremely difficult in the one per cent growth ceiling of 1974-75.

How much more true that is of the period since 1975 when in fact there have been no growth staff ceilings but much reduced staff ceilings. Despite all these warnings- the warnings from the Public Service Board and the warnings from the Royal Commission on Australian Government Administration- the Government pressed ahead with its blind pursuit of reducing the numbers in the public sector.

On 17 August 1976 the Treasurer announced in his Budget Speech that the Government had decided to reduce staff ceilings by a further 2 per cent in 1976-77. When that latest figure was added to the 1.7 per cent cut announced in June, it made the cut 3.7 per cent in all. The Government also stated its objective of achieving this reduction as soon as possible and it did so by early in 1976-77. Then in Januray 1977 the Public Service Board told the Government that further reductions in staff ceilings for 1976-77 should not be made, so that staffing imbalances could be corrected by appropriate action. It also asked that decisions on staff ceilings for 1977-78 should not be taken until it had received and examined forward staff estimates by departments. But what happened? What happened was that the Government simply ignored that advice, as is utterly clear from the latest report of the Public Service Board. On page 3 of its report it said:

On 1 4 January the Treasurer announced that a figure of up to 700 lower than the ceiling determined by the Government would be taken as a new celling objective for end June 1 977. Actual staffing at 30 June 1 977 was 580 below the approved staffing level for that date. The Treasurer also said that the Government would be regarding the actual aggregate staff numbers at 30 June 1977 as the ceiling objective for 1977-78. In May departments were advised of provisional ceilings for 1977-78; in aggregate the provisional ceilings require staff numbers to be reduced below the actual staff level achieved at 30 June 1977.

So, against the advice of the Public Service Board the Government cut the 1976-77 staff ceilings further. It fixed the staff ceilings for 1977-78 and set them below the 1976-77 level, totally ignoring and going against the advice given to it by the expert body in this area, the Public Service Board. The Board makes it quite clear in its 1977 report that the continual reduction in staff ceilings has created problems and that the Prime Minister was kept informed about them and made the decisions in relation to them. I refer honourable members to pages 3 and 4 of the Public Service Board report where it gives detailed examples of the problems which have arisen through the use of staff ceilings in recent years. In fact, having mentioned all these problems, the Board then said:

In current circumstances, it is the Board’s view that any further general reductions in staff ceilings would call for corresponding decisions by the Government to forego functions or reduce standards of service.

That was a clear warning to the Government that if it were to go on as it was going it would completely destroy the service provided by the Australian Government’s administrative service. But what happened? Despite the fact that the Government must have known that this was the Board’s view, the Treasurer announced in his Budget Speech this year that overall government employment staff levels would be further reduced by 3,000 or 1 per cent. So, despite this very fervent warning by the Public Service Board, we had a further cut in the staff ceilings, which represented just a blatant ignoring of the view of that government body whose prime concern is the efficient operation of the Public Service.

But, worse than that, the Government now seeks to blame the Public Service Board- the Board which has been protesting about the damage done by staff ceilings- for the problems that have arisen now. Those problems have been further exposed by the report of the AuditorGeneral from which it is clear that staff ceilings have been a significant contributing factor to the overpayments of $40m in unemployment benefits and $ 18m in pensions. In respect of the unemployment benefit, the Auditor-General said that audit examinations in 1976-77 had revealed unsatisfactory aspects in control over the payment of the unemployment benefit and that these unsatisfactory aspects had been attributed to inadequate staff resources, an increase in the work load due to a rise in the volume of unemployment benefit claims and problems associated with untrained and inexperienced staff. So, quite clearly, the Auditor-General saw staff ceilings as being an important factor in relation to that overpayment.

When the Government was confronted with all this it denied responsibility. Both the Prime Minister and the Minister for Social Security (Senator Guilfoyle) tried to shunt the blame off on to the Public Service Board. The Prime Minister grossly misrepresented the Public Service Board in Question Time late last week by saying that the Board, in its report, was addressing itself to cuts beyond those which had been announced already. That is nonsense. The Public Service Board revealed in its report, as I have shown, a whole list of problems already created in 1976-77. It was not talking about any future cuts or cuts relating to 1977-78. It listed a whole stream of problems created in 1976-77. Therefore, it was absurd for the Prime Minister to say, as he did, that the Board in fact was talking about prospective problems rather than the problems that had occurred already because of the staff ceiling cuts that this Government had blindly pursued. The Prime Minister also said:

The staff ceilings are implemented on advice from an interdepartmental committee.

He said that the recommendations of that interdepartmental committee had been followed. But this avoids the whole point. The interdepartmental commitee makes its recommendations on departmental claims for more staff in the context of the overall staff ceilings. It is absolutely ridiculous and downright dishonest for the Prime Minister to pretend otherwise. The Prime Minister also made this statement in Question Time last week:

In no case did the Public Service Board advise me that existing staffing levels would result in inadequate control of payments made by the Department.

The fact is that in the 1976 report, as I have shown, the Public Service Board demonstrated its concern in regard to staff ceilings. And it did not have available to it at that time the AuditorGeneral’s report. If it had, its comments would have been interesting indeed.

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

Mr STREET:
Minister for Employment and Industrial Relations and Minister Assisting the Prime Minister in Public Service Matters · Corangamite · LP

– The honourable member for Gellibrand (Mr Wills) seems to think that there is something inherently desirable in a growing Public Service, and in that he is being consistent with his colleagues and the general attitude of his party that public employment is preferable to private enterprise employment. Frankly, the Government does not agree with that proposition. We believe that it is a prime responsibility of government to see that the taxpayers’ money- after all, it is the taxpayers who foot the bill for Public Service salaries- is looked after properly, consistent with providing adequate services to the community. The honourable member for Gellibrand has joined the ranks of those who in recent days have made allegations about the supposedly harmful and disruptive effects of the imposition of staff ceilings in areas of Commonwealth employment.

I welcome this opportunity to make quite clear the Government’s position on this issue which in the minds of some people seems to have assumed an importance quite out of proportion to the real situation. The fact is that the Government has taken decisions to reduce staffing levels not only for economic reasons but also because it was clear to the Government on coming to office that the size of the Commonwealth area of employment had grown far beyond the demands for effective and efficient staffing. It is relevant to note that during the three years that the Australian Labor Party was in government staff numbers in the Australian Public Service grew as follows: In 1972-73 the growth was 4.09 per cent; in 1973-74 it was 4.87 per cent; and in 1974-75 it was 4.01 per cent. The cuts that this Government has made have to be seen in the context of the rise in numbers during those three years.

Since we came to office the Australian Public Service staff was reduced, after allowance is made for changes in Public Service Act coverage, in 1975-76 by 4.2 per cent and by 1.7 per cent last year. As the Treasurer (Mr Lynch) announced in the Budget Speech there will be a further reduction in numbers during 1977-78. In its application of staff ceilings the Government has been very much aware of the need to maintain a satisfactory delivery of services to the Australian public and has therefore paid close attention to the effects of staff ceilings on those departments responsible for the provision of those services. As this House will be aware the particular situations of my Department and of the Department of Social Security have been kept under constant review and adjustments to ceilings have been made periodically following the several reviews which have taken place. In addition, special arrangements have been made between the Department of Social Security and the Public Service Board to ensure that emerging staff problems are monitored and attended to promptly.

More generally, the Government has been concerned to ensure that a proper and effective mechanism exists for the speedy consideration of representations made to the Government by departments and authorities. As the Prime Minister (Mr Malcolm Fraser) has already said, this mechanism has taken the form of an interdepartmental committee comprising representatives of the Public Service Board, the Department of Finance and the Department of the Prime Minister and Cabinet. This interdepartmental committee has reported to the Prime Minister who has approved when there has been justification either a lifting of ceilings or a temporary penetration of ceilings. We believe that staff restrictions most certainly have had favourable effects on the efficiency of management of human resources in the Public Service. It is a fact of life that in situations of limited resources more attention has to be paid to planning, organisation of work and priority setting and we strongly believe that it is in the interests of the community that resource management of this kind is achieved in the Public Service. It cannot be achieved in situations of virtual unlimited growth which occurred under the Labor Government.

I would like now to examine the detailed arrangements which operate in relation to staff ceilings because it is important to remember that these ceilings are flexible. There are two important points. The first is that when ceilings are set at the start of each year they are tailored to the work loads and needs of individual departments at that time. The second point is that even then the mechanism exists and is often used to amend ceilings during the course of the year if circumstances change. What happens is that the initial settings are determined by the Government following receipt of recommendations from officials. In turn the officials’ recommendations are based on estimates from each department or authority of its staffing needs for the current year. Those estimates give bids for the number of staff against each major program or project for which the department is responsible. The net effect of this process is that even when overall ceilings are reduced a number of departments are allowed to grow on the basis of a proven work load. That is what happens at the start of the year.

Now let us look at administration during the year. Departments and/or Ministers who believe that their ceiling is inadequate for whatever reason can present a case for having an adjustment made. Normally this would arise because circumstances had changed since the ceilings were set but it could simply be an appeal against the original level set in the way I described a moment ago. Each representation is treated on its merits and many adjustments to staff ceilings are made in this way. Some of these changes are very significant. For example, the staff of the Department of Social Security grew by almost 900 during 1976-77 largely as a result of changes to ceilings as the work load in the Department grew. Similarly, in my Department of Employment and Industrial Relations the staff number also grew in real terms by several hundred during the year in much the same way.

The House will remember the details I gave some time ago of increases in staffing in the

Commonwealth Employment Service in line with the interim report of Mr Norgard on the Commonwealth Employment Service. We accepted that interim report and increased staff ceilings immediately. There are in addition several smaller examples that show the flexibility of the staff ceiling arrangements. For example, the staff number in the Family Court grew by over 130 last year and in the Department of the Capital Territory by 120. As I have mentioned, there were the substantial increases in the Department of Social Security and my own Department. So the setting of ceilings is flexible. It is determined by proper processes in the first instance and reviewed during the course of the year according to representations received from departments or Ministers.

It is also relevant to note that the claim is often made that although the profit motive does not apply in the Public Service setting, the application of staff ceilings to the Public Service does apply many of the constraints of the profit motive on managers within the service. They have to weigh up very carefully against their department’s objectives the relative merits of deploying staff against particular programs and do so in such a way that the best use is made of available staff resources. Under the constraint of recent ceilings a number of beneficial effects have been noted in areas such as better forward planning, overall resources management and avoidance of waste. I refer honourable members to the Public Service Board’s annual report of 1971 which referred to several of these factors including increased emphasis on actual examination of priorities, improved planning, better organisation of work and more effective use of resources. The Government and the Public Service Board will continue to ensure a proper balance between the size and efficiency of the Public Service and the services it provides to the Public.

Mr Antony Whitlam:
GRAYNDLER, NEW SOUTH WALES · ALP

– The issue of staff ceilings is one which has not been resolved in the Australian community and the concern felt at all levels about the effect of staff ceilings on the delivery of public services is very real, as the honorable member for Gellibrand (Mr Willis) said. Let me first deal with a couple of points which the Minister for Employment and Industrial Relations (Mr Street) made. The Munster said that the Australian Labor Party had a view that there was something inherently desirable in a growing Public Service. That is nonsense if he is talking simply about the number of government employees. The Minister then went on to say that we are always interested in employment being in the public sector rather than the private sector. That is not necessarily so, but when it comes to dealing with the problems of the unemployed, with the performance of the Commonwealth Employment Service and organisations like that for which he has ministerial responsibility, naturally we are concerned about their performance and I will come back to that in a moment.

The Minister struck on the real objection which the Labor Party had to the Government’s policy in relation to staff ceilings when he said that the decision taken by the Government in relation to the size of the Public Service was not taken simply for economic reasons. That is perfectly clear. It was taken solely for ideological reasons and the Minister conceded that every Government Minister had a prejudice that the size of the Public Service was, per se, too big and ought to be reduced quite apart from the size of the problems with which it has to deal. This attitude is a reflection of every policy that has come from this Government in the last 18 months. The refusal of the Government to face up to economic facts and the refusal of the Government when determining economic priorities as shown by its strategy on expenditure items to deal with those problems are reflected also in the problems of the Public Service. The Minister went on extensively to tell us that everything was rosy in the garden. One thing one has to remark is that this is in complete contrast to the very real concern expressed by an apparently less influential Minister, the Minister for Social Security (Senator Guilfoyle) in the Senate last week. On two successive days the Minister was at pains to point out- I do not have to go through every page of Hansard and indicate where she did it- ner concern because her Department did not have the manpower resources to deal with the problems with which it was confronted and that continuing demands made upon the Prime Minister (Mr Malcolm Fraser) and through the interdepartmental committee, to which the Minister referred, had been refused. That is the fact.

The facts are not, as the Minister for Employment and Industrial Relations (Mr Street), put it, that somehow the situation is rosy and that, in fact, Government departments are able to meet the problems. The Minister commented blithely that numbers had increased during the past year in the Departments of Social Security and Employment and Industrial Relations. Is that not remarkable! The observation is as fatuous as would be the remark of a Minister who, in 1943, said that in the last four years the numbers of defence personnel had increased rapidly. Of course the numbers have increased rapidly. The situation has changed. It needed to. The Opposition in this debate is saying that staff ceilings have been used unintelligently as an ideological bludgeon by the Government against the Public Service and, therefore, indirectly against the Australian people and their very real needs and expectations. That is our objection to the Government’s policy.

The Australian Labor Party has no objection to intelligent manpower planning in the Public Service. It would support that policy. It would support a government which was developing flexible policies in order to respond in different areas as demands on resouces altered. But that is not what we are faced with here. We are faced with arithmetical figures being imposed across the board without regard to the real demands which are being placed on departments. If honourable members think that this is a view entertained only by the Opposition, they are sadly mistaken. I shall refresh the minds of honourable members by drawing attention to some of the official but non-partisan sources of data which we have on this matter. Recently, the Public Service Board annual report chronicled in a detailed way the history of the Government’s imposition of staff ceilings on the Public Service. The Board was at pains to point out that the Government’s decision has not been made upon its advice and that, in fact, the ceilings had been imposed in a blanket fashion across the board for ideological purposes. As long ago as January this year when the Board advised that further reductions would be unwise the Treasurer (Mr Lynch) in the same month, within a matter of weeks, announced a further reduction in numbers across the board in the Public Service.

The Minister for Employment and Industrial Relations referred to interdepartmental committees. I point out that they do not make policy in this country. If honourable members read the report of the Public Service Board they will see that it makes that very clear. It states:

The Committee has prepared reports to be used by the Prime Minister in making decisions on staff ceiling matters.

These decisions are made by the Prime Minister not by a Public Service interdepartmental committee. The Government must accept responsibility for those decisions.

In relation to these staff ceilings the Public Service Board concluded, after it counselled against the ceilings in January this year in firm tones, that it felt obliged to repeat the counsel in its annual report this year. It stated:

In current circumstances, it is the Board’s view that any further general reductions in staff ceilings would call for corresponding decisions by the Government to forgo functions or reduce standards of service.

That was the Board’s conclusion and that is the conclusion about the short term effects of the Government’s decisions. We are not talking about the longer term effects about which the Public Service Board also expressed considerable reservations. These reservations are set out on the same page of the annual report. The Board talks about the effect this policy will have on mobility, on the reluctance of departments to accept transfers from other departments because they will affect the staff ceilings. Therefore the situation attacks the very basis of our integrated Australian Public Service which is designed to ensure a mobility and ability to tap at any time the best available public servant for the job.

The Minister for Employment and Industrial Relations ought not to be too blase about the situation because the subject of single greatest concern to the Australian community at the moment is unemployment. The prospect of people being put back into work relates directly to his ministerial responsibility and particularly to the performance of the Commonwealth Employment Service. Recently we have had two reports on this subject; one was the Norgard report and the other was the Myers report. The Norgard report concludes in very sterile official language its view about the effect of staff ceilings on the performance of the Commonwealth Employment Service. It states:

The Review- that is the committee- believes the inadequate staff resources have been made available to the CES . . . recruitment has been severely affected by the staff ceilings imposed throughout the Public Service and that the Public Service Board has not given the CES staffing situation any special consideration. Staff shortages in the CES have resulted in a number of vital procedures being either drastically curtailed or, in some instances, omitted completely. For instance, if there is an upsurge of clients seeking employment assistance at an employment office, it is common practice for any officers engaged on vacancy and promotional activities to be recalled to the office to assist with the increased traffic. This is quite wrong; the opposite should apply. As the number of clients increases so should the level of vacancy canvassing if jobs are to be found for the people concerned.

That is sterile; that is not emotional. Every honourable member knows from his dealings with his constituents about the concern people have over the unemployment situation. They know how distressing it is. I ask honourable members to imagine the distress of counter staff in the Commonwealth Employment Service, in the Department of Social Security, who, because of understaffing, are faced with many more clients than they are able to deal with. Instead of being able to devote 30 minutes to learning of someone’s job skills and potentialities they can devote only IS minutes. They are able to place only one out of every four job applicants instead of one out of every two. This is the human face of this Government’s ideological bludgeoning of staff ceilings. The Australian people will not tolerate this situation any longer because everybody knows that the Government is prancing like a cat on a hot tin roof. The heat is coming from a fire which the Government lit under the staff ceiling issue.

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

Mr HASLEM:
Canberra

-Unlike the honourable member for Grayndler (Mr Antony Whitlam), I lived in Canberra during the years of the former Whitlam Administration. I know what that Administration did to the Public Service. I know how the Public Service squirmed and why it put me into Parliament. For the honourable member- he is a new member of Parliament who was overseas for most of that time- now to claim that this Government is guilty of some form of Public Service bashing is complete hypocrisy. We all know what the honourable member for Hindmarsh (Mr Clyde Cameron) had to say about the Public Service. We all know how successions of Ministers abused senior public servants, went behind their backs for advice, of how they appointed political appointees and generally brought the Public Service to ridicule. I am not going to hide from the problem faced in Canberra because the Government thought it necessary to cut back on expenditure. That policy has fallen heavily in ( tan.berrra. We went through a period of unbridled growth. The Public Service suffered because of that. There were plenty of jobs around and many public servants spent most of their time putting in for new jobs and reading the Government Gazette instead of getting on with the job. All that has changed. The Public Service Board in its 1 977 annual report correctly states:

Both the Government and the public have a right to expect that such an emphasis should be a continuing and pervasive feature of public service management.

The Board made this comment in relation to ensuring that staff restrictions had led to critical examinations and improvement of planning, organisation of work, analysis of priority and effective use of resources.

This Government came to power at a time when the whole Australian economy was in tatters. It had a job, given to it by the people of

Australia by a quite massive majority, of bringing sound government back to this country. One of the most elementary rules of administration is to make sure that the people who work for an administration do so properly and efficiently. I worked in the Public Service for 5Vi years of my working life of 1 5 years. I know something of private enterprise, both large business and small business, and I know something of the Public Service. Not one public servant in my electorate of Canberra would claim that the Public Service is perfect.

The stories one hears of inefficiency, slackness and mismanagement when one talks with public servants in Canberra are legion. I am not suggesting that the practices are widespread, but we all know of them. Only recently, when I was drinking in a hotel at Woden during the lunch hour, having a counter lunch, not while Parliament was sitting, I overheard a public servant who was standing next to me say: ‘Well, I had better go back to work and have a snooze’. That was said at a time when there were widespread complaints, particularly in Canberra, of public servants being overworked and understaffed.

I believe the Public Service Board was quite correct in pointing out to the Government that staff ceilings cannot be reduced any further and that any management techniques which are introduced from now on will have to be much more sophisticated and much more flexible and will not have to be such a blunt instrument. When one comes into government and finds the country in trouble, when one finds the country going bankrupt, the niceties, I am afraid, sometimes have to be put aside while one rolls up one’s sleeves and gets one’s hands dirty. Once things have been set in order, I believe, some of the more sophisticated and gentler processes of management can be used.

Let us look at the figures relating to Public Service employment in the Australian Capital Territory. I feel that those people who have been complaining so strongly about the situation in Canberra perhaps have been overstating the issues a little. In Canberra the Public Service fulfils two functions. The first is to serve the nation through policy departments. The second is to provide the people of the Capital Territory with services such as those undertaken by State governments and municipalities. Let us look at the figures for the State and municipal-type functions in Canberra. There is very little evidence of any fall in the delivery of community services. The number of people employed by the Australian Capital Territory Police has fallen from 570 at the end of November 1975 to 549 at the end of June this year. That was a marginal and regrettable decrease. The number of people employed by the Canberra Theatre Trust has remained the same.

The number of people employed by the Australian Capital Territory Fire Brigade-the provision of fire prevention services is essential in any city- has increased from 111 to 165 during the same period. That is a quite massive increase. The number of people employed by the National Capital Development Commission, the body charged with the responsibility of planning and building a national capital, has fallen from 491 to 405. At the same time senior officers of the NCDC have assured the people of Canberra and the people of Australia that the number of staff they have and the amount of money they have are quite adequate to meet the needs of a capital which is now growing more slowly. The total number of staff of the Department of the Capital Territory plus its statutory authorities has grown, albeit by a small amount, from 4,640 in November 1975 to 4,663 in June 1977. It has done so with some trauma. I feel that by and large it is a much more efficient and much tighter operation than it was when this Government came to power.

Another particularly important area in Canberra is education. We have a very young population, and it is growing. Let us look at the staff figures for the Australian Capital Territory Schools Authority for a similar period, 31 October 1975 to 31 August this year. The number of Australian public servants administering our education has risen from 596 to 698. The number employed by the Commonwealth Teaching Service has risen from 2,569, with 93 part time, to 2,825, with 251 part time. That is hardly the record of a government which is neglecting the basic rights of and its basic obligations to the people of the Capital Territory. I do not have the figures for the Capital Territory Health Commission, but I understand that there have been like increases, although at this point there are some strains in relation to the obligation to open the Calvary Hospital- not to staff the hospital but to support the staff that will go into that hospital from a Roman Catholic order.

The Public Service is the largest organisation in Australia. In Canberra it provides jobs for our young people. It is a key organisation in relation to employment in the Capital Territory. I repeat information which Senator John Knight and I have received from the Prime Minister (Mr Malcolm Fraser) in relation to the growth of the Public Service in Canberra, and that is that during the next few weeks Cabinet will consider the transfer of some 400 extra public servants to Canberra, that 200 public servants will be appointed on a temporary basis to the Department of the Capital Territory during the Christmas holidays and that during the coming weeks additional positions will be created in the Taxation Office, Canberra. There will be many jobs for school leavers because of normal wastage during the next 6 months.

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

APPROPRIATION BILL (No. 1) 1977-78 Second Reading (Budget Debate)

Debate resumed from 15 September, on motion by Mr Lynch:

That the Bill be now read a second time.

Mr WILLIS:
Gellibrand

– I move:

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

a) intensify and prolong the recession,

increase unemployment,

have little impact on inflation,

d) make regressive changes in the tax system, and

e) reduce living standards ‘.

In speaking to the motion and the amendment, I wish firstly to go back to a consideration of what life was like two years ago. Two years ago in this Parliament the Opposition was preparing to reject the Budget of the Whitlam Labor Government because of the alleged failure of that Government to control the economy. It went ahead with its delaying tactics. It told the people of Australia that it would bring about a fundamental change in the economic situation of this country and that it would turn on the lights. What has it done in the interim? If we compare the state of the economy now with the state of the economy two years ago, when the Opposition was preparing to reject the Budget, we can see that it has failed absolutely to revive the economy and that things are far worse than they were two years ago.

Let us look at unemployment, which is a very important economic indicator. The Commonwealth Employment Service figures show that registered unemployed at August 1975 numbered 248,000 and in August 1977, 334,000-an increase of 86,000 or 35 per cent. Alternatively, if we look at the figures for unemployment produced by the Bureau of Statistics, in August 1975 243,800 people were unemployed; in August 1977 the figure was 317,600, anincrease of 73,800. If we look at employment figures rather than unemployment figures, we find that the total number of civilian employees in July 1975 was 4,743,400. In July this year the figure was 4,717,900, a decrease of 25,400. In other words, over the past two years- the period in which we should have expected the number of civilian employees to increase by about 200,000-there has been a decrease of 25,500. If we look at the number of employees in private enterprise we find that in July 1975 there were 3,309,700 employees and in July 1977 3,25 1,100 employees, a decrease of 58,600. So much for the turning on of the lights in respect of employment. Quite clearly the Government has failed disastrously in this area.

With regard to inflation, there has been some reduction m the consumer price index, although there has been nowhere near the reduction which the Government tries to claim. In the 12 months to June 1975 the consumer price index rose by 16.9 per cent in line with the very high world inflation rate at that time. In the 12 months to June 1977 it rose by 13.4 per cent, which represented a reduction of 3 per cent. In the meantime, of course, other countries have managed a much more drastic reduction of their inflation rate than we have. Efforts by the Government to use indices other than the consumer price index do not really convince the Australian people. What is relevant to people in considering inflation is the consumer price indexthe index of prices paid by Australian consumers for goods and services- not some implicit price index which is related to the price of capital goods which are largely imported. That is what inflation means to them. Therefore, one must use the consumer price index. If we do so we see that there has been a minimal decline in inflation.

If we look at production statistics for the 12 months to June 1975 we find that the gross national product in real terms grew by 3.5 per cent. But in the 12 months to June 1977 the gross national product in real terms grew by only 1.4 per cent. What a miserable rate of growth we nave had in the past 1 2 months- a little over onethird of the rate of growth for the year ended in June 1975! The number of building approvals was 19 per cent lower in June 1977 than in June 1976. In July 1975 there were 12,478 approvals and in July 1977 only 10,700 approvals, a fall of 1,778. For the 12 months ended in July 1975 motor car registrations totalled 60,500 and to July 1977, 50,500-a fall of over 10,000. So with all these indicators we can see that the economy is going downhill at a rapid rate. If we compare the situation now with what it was two years ago we see that the situation now is much worse than it was then.

International reserves have declined somewhat in that two year period. Of course, in the past few months they have been racing downwards. The value of the currency compared with the trade weighted average of international currencies is now 13 per cent less than it was when Labor was in office two years ago. If we look at living standards- a fundamental indicator of the welfare of people in this country- we see that in the 12 months to June 1975 real household disposable income, that is the real income which people had in their hands to spend, went up by 5.1 per cent. In the 12 months to June 1977 that figure declined by 2.4 per cent. In the past 12 months the people of Australia have become poorer by 2.5 per cent in terms of real income that they have in their hands after tax. This is a drastic change from the figures for the 12 months to June 1975 when the then Opposition said that the situation was disgraceful and that the Government of the day had to be thrown out. Quite clearly the situation is much worse now.

If we look at the total living standards of people we have to take into account the very diminished level of government services available because of the drastic cuts in government expenditure, living standards being comprised not only of the real income which people have in their hands after tax but also the level of government services provided. Those services are being cut back at a frightening rate. So clearly living standards have been drastically reduced by the Fraser Government.

It is not just a matter of comparing the situation now with what it was two years ago. It is interesting also to see what is happening right now. In the past few months the situation has become worse. The rate of acceleration of deterioration has increased. The figures produced by the Australian Bureau of Statistics show that in the past three months, in seasonally adjusted figures, there has been a rise of 20,000 in unemployment. We cannot do the same analysis for the CES figures because this Government has decided not to publish the seasonally adjusted figures any more. It has done that because those figures are embarrassing. Although they are available and are used by the Treasury in the preparation of the Budget Papers, this Government tries to hide the extent of unemployment by refusing to publish the seasonally adjusted figures produced by the Commonwealth Employment Service. This is a disgraceful action. There is now a rumour that the Government might also refuse to publish the original figures. That would not surprise me. Clearly the Government is greatly embarrassed by its total failure to get on top of the employment situation.

The ANZ Employment Advertisement Series, which looks at the number of advertisements for jobs appearing in newspapers in the capital cities of Australia, shows that the number of these advertisements fell every month this year. Month after month it has shown a seasonally adjusted decline, showing that fewer and fewer job vacancies have been available for people to fill. Retail sales in the past four months have fallen in real terms by 0.6 per cent, and so on. The economic situation which this Government has created is little short of disastrous.

Why are things so bad? The Government blames everyone but itself. It blames the unions first and foremost. The unions have become the Government’s No. 1 scapegoat. Minister after Minister spends his time outside this House raving about the antics of the unions and their supposed destruction of the country. In fact, if we look at the figures we see that there has been a drastic decline in industrial disputation. In the past five months there has been a remarkable reduction in the level of industrial disputation in this country. The level also fell heavily in 1976 and, indeed, in 1975. Indeed, there has been a continual reduction in the level of industrial disputation in the past two or three years.

Even though the average level now is well below that for any year up to 1968, the Government keeps ranting about unions being the cause of this country’s economic problems. Quite clearly the Government is just scapegoating- using the unions as a basis for trying to avoid responsibility for the economic mess it has created. The Government’s attack is levelled not only against the unions, although they are the Government’s principal target; it has placed a fair bit of the responsibility for the mess with the Conciliation and Arbitration Commission. The Treasurer (Mr Lynch) in particular has done so. In one of the most disgraceful statements made by any Treasurer in this country, he said the day after making his Budget Speech:

The major disappointment of last year was, of course, failure to bring about any improvement in the level of unemployment. Let there be no doubt that the responsibility for this outcome rests principally on the shoulders of the Conciliation and Arbitration Commission, which has consistently refused to face up to the employment consequences of its decisions.

What a disgraceful comment! It displayed a total avoidance of any responsibility whatsoever for the failure of the Government to reduce unemployment and put the whole burden onto the

Conciliation and Arbitration Commission. As I said, at other times the Treasurer has placed a substantial amount of responsibility with the unions, but this time it was with the Conciliation and Arbitration Commission. Yesterday we heard the Deputy Prime Minister (Mr Anthony) talk in similar terms about the Conciliation and Arbitration Commission, but I shall come back to that later.

The Government has also used the Industries Assistance Commission as a scapegoat. Even though it is only an advisory body, it is said to be destroying confidence and inhibiting investment in this country, thereby stopping economic recovery. Clearly, this Government is seeking any means it can to find an excuse for the economic mess it has created. What has been its role in creating this economic mess? The mess stems firstly from the ideological basis of the Government’s economic decision making. When the Government came to office it wanted to transfer resources from the public sector to the private sector, to cut government expenditure, and to give private companies massive tax concessions. It went ahead and did so. It did that not because it was clear that it would be the best thing for the country but because it had an ideological commitment so to do. It had told the people of Australia for so long and so often that government expenditure was evil and that public sector spending had to be reduced in the interests of the people that, when it came into office- even though it was by no means clear that it would be good for the country; in fact, I assert strongly that it was very bad for the country- the Government went ahead with that kind of program for ideological reasons.

The same is true of the Government’s transfer of real income from wage earners to profits. It asserted that that was necessary to restore the level of profitability so that companies would be encouraged to invest and so that we could get economic recovery going again. But, if a government at the same time reduces the capacity of people to spend, clearly that inhibits economic recovery. It was again an ideological commitment which spurred the Government on to the path which it is still pursuing.

A similar situation applies in regard to the need to slash the deficit. The deficit had been made an amazing political issue. An increasing deficit was seen as the height of economic irresponsibility. So the Government had to slash the deficit. In slashing the deficit it also has had to take actions which have aggravated the economic mess into which the country is sinking. What have been the effects of this policy? Firstly, the slashing of the deficit and government expenditure led to big reductions in demand. The public sector is an important sector of total demand. If it is cut, then demand is reduced. Therefore, the prospects of economic recovery being generated are reduced.

Government expenditure was cut in early 1976. It was cut by 4 per cent in real terms in last year’s Budget. It has been cut again in this year’s Budget. So, there has been a substantial reduction in demand from the government sector, and that has flow-on effects into the private sector because a lot of government expenditure relates to the private sector. Capital expenditure and so on uses up a lot of building materials and equipment which are supplied by the private sector. If that kind of government expenditure is cut, demand for goods and services provided by the private sector will be reduced. That has downward multiplier effects, and creates more and more unemployment. That is what this policy has done.

The situation in relation to real wages is similar. They have been cut by between 2.5 per cent and 3 per cent. The reduction would have been to much more if the Government had had its way. The effect has been to reduce consumer spending. That cut in real wages has not been offset by tax cuts, despite what the Government says about cutting taxes and thereby boosting the after-tax income of people. It is true that tax indexation has been introduced, but tax indexation is not a tax cut. Tax indexation simply prevents the tax burden from becoming heavier. The Government increased child endowment; that is true. However, it also abolished tax deductions for children. So, that total effect was that the increase in the child endowment was almost completely offset.

The Government introduced the Medibank levy, which is nothing more than an increase in tax. It takes money away from people so that they cannot spend it on other things. Tax deductions for mortgage interest payments were abolished. So, despite all the propaganda about tax cuts, there has been an increase in the tax burden, That, together with the cuts in real wages, means that families in Australia are worse off in real terms, as I mentioned before. Real household disposable income is now less, seaonally adjusted, than it was in September 1974- almost three years ago. So, clearly the Government’s policies in cutting government expenditure and cutting wages have ensured a reduction in these crucial areas of demand- consumer expenditure and government expenditure. Without some increases m one of those two areas there cannot be economic recovery. Indeed, the Government recognised that in its own Budget Papers which were presented last year. It said in Statement No. 2 at page 22 of the Budget Papers:

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

That was very true; and it is still true. It therefore means that the Government’s policy of reducing the real income of consumers must inhibit and prevent economic recovery.

Let us look at the effects of the Budget which was presented in the last month. It continues on the disastrous path along which the economic policies of the Government have already led this country. Government expenditure is cut by about 2 per cent in real terms; real wages will fall, if the Budget is successful, by a further 1.5 per cent. Indeed, if the Government’s wages policy is successful the fall will be more than that. However, the Government hopes for at least 1.5 per cent. So again it has provided for further cuts in government expenditure, further cuts in real wages, and therefore further cuts in demand. Therefore, we will have more unemployment. On the face of the Budget Papers it is clear that there will be more unemployment. The Government says that employment may grow by perhaps 2 per cent. Everyone knows that the work force normally increases by at least something of the order of 2 per cent or more. But, if employment increases by only 2 per cent, then clearly there can be no reduction in the level of unemployment. That 2 per cent estimate in relation to employment is clearly an optimistic one. If the Government’s forecast is in any way out and the increase is less than 2 per cent, which I suggest it certainly will be, then there will be much more unemployment.

Indeed, we have already seen the unemployment figures increase month by month, as I have already mentioned. There is absolutely no reason to think that they will not continue to increase because of these incredibly stupid economic policies, which are not offset in any way by job creation programs. It is a disgrace that this country has no job creation programs as such, despite the fact that we are in the worst recession since the 1930s. The Government has no job creation programs, except for the Special Youth Employment Training Program which now has almost 10,000 young people employed under it. But the moneys made available in the Budget for that program are not enough to keep any more than a little over half of those young people going for the rest of the financial year. Perhaps the

Government intends to make more moneys available. It will have to make substantially more funds available if it wants to keep in employment the current numbers on the Special Youth Employment Training Program. Furthermore, it is not by any means clear that that program is creating more jobs. It is putting more young people in jobs, but it is not clear that it is creating more jobs in total.

Inflation is estimated to remain at 12 per cent. The Budget Papers indicate that that will be the case. So, clearly there will be no reduction in inflation either in this financial year. So, in respect of these crucial factors- unemployment, inflation and economic growth- there is little to look forward to in 1977-78. The Government’s Budget is a disgrace. It commits this country to follow further along the path of recession and of inflation. We therefore condemn the Budget in the terms which I have outlined in the amendment. For the reasons I have mentioned in the amendment, we strongly oppose the Appropriation Bills.

Mr DEPUTY SPEAKER (Mr Lucock)Order! The honourable member’s time has expired. Is the amendment seconded?

Mr Lionel Bowen:

-I second the amendment and reserve my right to speak.

Mr JULL:
Bowman

-I was interested to hear some of the comments of the honourable member for Gellibrand (Mr Willis), who preceded me in the debate, in regard to job creation programs. Indeed, I have a deal of sympathy with his remarks. However, I think that really we should be looking more towards a long term plan. One of the problems we in Australia have had over the years past is that we have never really had a manpower policy for this country. Maybe that is really what we should be looking towards in the long term if we are to project Australia into the decades ahead. Maybe in the future we should be looking to see whether we cannot get a more efficient use of our manpower resources and try to settle the situation down in that way.

I am sure that most people would agree that the single most spectacular action announced in the 1977-78 Budget was the establishment of standard rate taxation and the very real benefits that it will bring to the taxpayers of Australia. As from February, there will be tax reductions at all levels of taxable income. As from that time, 225,000 people who presently pay tax will pay no income tax at all. The lower income groups of the community have been looked after in a way in which they have never been looked after before. Thousands of pensioners on small private incomes will pay no tax at all. I am sure that we all are aware of the stress that existed in the community previously, especially amongst our pensioner groups, when taxation time came around. Yesterday I had some very real evidence of the relief that is being felt by the pensioners in our community when I attended a meeting of a pensioner group at Wynnum in my electorate. They were pleased to know that this major social reform had been made and that they had that feeling of security from now on, even though they had a small extra income coming in on top of their pensions.

It is not only the pensioner who benefits. The first $3,750 of everyone’s income is now tax free. Ninety per cent of taxpayers- people with incomes up to $16,000 per annum- are to pay no more than the marginal rate of 32c in the dollar. The dependent spouse rebate remains. This means that someone with a dependent wife can now earn up to $5,484 without paying tax. The Government has given a guarantee that all taxpayers will be better off under the new system. For months there were demands from all sections of the community for tax relief. It has now come along with some of the most progressive reforms of the tax scale that have ever been seen in this country or many other countries around the world.

There are a number of observations of the 1977-78 Budget which should be made, especially as they affect my electorate. On a number of occasions in the House I have stressed the need of small businesses and many of the problems they are facing. The Government is strongly committed to creating an economic climate in which small business can expand and prosper. A number of very significant taxation reforms have been introduced since we came to office. In my electorate I run a regular monitoring service of small businesses. The last survey was conducted in recent weeks. I think it is fair to say that many of the implications of what the Government has done for small business have not been widely understood or accepted. The investment allowance with its special income tax deduction of 40 per cent has been a boon to those who have used it. The 20 per cent rate after 30 June 1978 is a further incentive. The trading stock valuation adjustment scheme, the increased retention allowance to private companies, tax averaging, income equalisation deposits and personal income tax indexation have all been highly beneficial.

Obviously, it is not only the Federal Government which must make a contribution. State and local governments also have a very real part to play. In the survey in my electorate we proved that small businessmen were vitally concerned about payroll tax and workers compensation payments. In Queensland the State Treasurer, Mr Bill Knox, has foreshadowed major reforms in the payroll tax rates. I think he should be congratulated. This is an area which is proving to be a real concern, not only in Queensland but also around Australia. Employers are urgently seeking lower premiums for workers compensation. I think this can be traced as a major inhibitive factor in a number of firms employing extra staff. I have also spoken previously in this House about the effects of local government charges on future expansion of small businesses, especially in relation to the Brisbane City Council. In fact, there are four recent cases in my area in which expansion of projects has not proceeded because of these charges. Unreal site development charges of up to $40,000 were made for extensions to an engineering plant. The extensions cost only $16,000. Excessive charges are made for underground power even when no underground power is being planned either now or in the distant future. Local government authorities have fared exceptionally well under this Government They must now be given the opportunity to reduce these charges to allow for further expansion of our small businesses.

There is another area in which the Commonwealth Government can assist in helping small businesses, especially a number of small businesses engaged in professional activities. At a time when some small professional companies are in severe financial difficulties I believe that the Commonwealth could take a lead from some of the State governments which are now subcontracting more and more of their work to provide professional groups. Certainly this is happening in the survey and mapping area along with some construction activities in Queensland. Indeed, many smaller companies would not be in business today if it had not been for this particular attitude.

– Freddie Laker would have to take 100 passengers off.

Mr JULL:

– Freddie Laker would never look at Brisbane international airport as a stop for that very reason. I should imagine that he would have to take more than 100 passengers off. It seems crazy to me that Queensland, being the holiday State of Australia, has to suffer this sort of imposition purely because of the stubbornness of governments over the years since 1968 which have not decided to proceed with the airport complex. This is an area of very real concern to the people of Queensland. We trust that in the next few weeks the Minister will make a major announcement.

The Budget is a good Budget for the future of Australia. The tax reforms have been widely welcomed right throughout the community. Already we can see that Australia has started to return to its normal prosperity and progress. I fully support the Budget and reject the amendment.

Mr LIONEL BOWEN:
Smith · Kingsford

– I support the amendment which has been moved by the Opposition because it clearly shows the defects of the Government’s strategy and of its strategy in the previous Budget. What the Opposition is saying m the amendment has already been proved in the past 12 months, namely, that inflation has not been controlled, that unemployment has soared and that there is a crisis of confidence. From the point of view of jobs and security people do not know where their future lies. This is not just a political opinion by the Opposition; it comes from the evidence submitted at the last national wage case hearing. Today we heard the very interesting news that a supporter of the Government- the honourable member for Tangney (Dr Richardson)- has resigned. He said that he is disillusioned because the Government has failed to honour its election promises. He is entitled to be disillusioned. We see within the Government’s ranks a further fracture of its so-called solidarity on how well the country is going.

Gallup polls clearly show that the Government will be defeated unless it can drastically improve its present image. We say that that is impossible, for the simple reason that the honourable member for Bowman (Mr Jull) mentioned. Where are the Government’s manpower policies? There are none in this Budget. One can do no better to ascertain evidence of the Government’s failure to fulfil its obligations than to turn to the Budget and to look at the amount of money that has to be given by way of assistance to the unemployed and the sick. As clearly indicated by honourable members on this side of the House, we see in this Budget an amount of approximately $800m for unemployment benefit and we see that compared with previous allocations, there is a reduction in structural adjustment assistance.

What nonsense it was for the Prime Minister (Mr Malcolm Fraser) to say last Thursday night what a great Budget it is, how it will help the economy and how it will help to create jobs. It does nothing of the sort. We are debating this Budget at a time of virtual record unemployment. There are 334,000 people registered as unemployed. This is 64,000 more than in August of last year when the previous Budget was introduced with the specious reasoning that it would do something for the economy, that it would uplift confidence and that it would create job opportunities. The Government has failed. It deserves to be defeated at the polls. We understand that there is to be an election in December because the Government wants to have an election as quickly as possible. It is so deep in the mire as a result of its philosophies and policies that it has lost its credibility. Fraserism and federalism for the reasons that I have mentioned are no longer marketable commodities in this country.

Let us look at some of the issues. The Prime Minister last Thursday said that he would welcome any wage earner who could tell him that he was worse off as a result of this Budget. He challenged anyone on the Opposition side to tell him. I have five dependent children. Because of the elimination of the tax rebate of $250 for each dependent child, I am $4.50 worse off each week. Other people with dependent children must be similarly affected. Yet the Prime Minister has the audacity to challenge us on this issue with such a specious argument. He has failed on that one issue alone.

Let us look at a more fundamental issue- what is wrong with this Government? I refer to the election policy speech of the Government. The official publication containing this policy is entitled ‘Turn on the Lights’. The Government sought a mandate to carry out the promises contained in its policy speech. On page two of the policy speech, the Prime Minister said that his Government would:

. defeat inflation and provide jobs for all.

The Government has failed to do so. He said further

We have a comprehensive strategy to restore prosperity.

In the national wage case, the Full Bench of the Commonwealth Conciliation and Arbitration Commission clearly said that private employers had submitted to the commission that there is a crisis in confidence. So there is. It is no good blaming the Industries Assistance Commission for reports that set out factually what must be done to protect industries when industries themselves know that they are not able to utilise their plant and equipment to the limit of their resources. They have no market for the goods if they can do so. Is it not ridiculous to put the blame on issues such as lack of protection. What is needed in this country is a program for structural change, a program for jobs and a program for prosperity that gives confidence. But confidence has not been engendered by this Government.

We see from a reading of table 1 of Budget Statement No. 1 that the number of people in the work force is now down to 61.8 per cent. In December 1975, it was 62.1 per cent. The number of people in the work force has fallen consistently since then. There is not one tittle of evidence which entitles this Government to say that it should remain in office. It is for these reasons that public opinion has swung violently against the Government. This swing can be seen from the results of the South Australian elections and the New South Wales municipal elections. I make these points because the credibility of the Government is at issue.

The Prime Minister also said in his policy speech:

More investment will lead to jobs . . .

The evidence is to the contrary. The Government gave handouts to certain people through the investment allowance, but there are fewer jobs resulting from that investment. The Prime Minister also said in his policy speech that, with the turning on of the lights, a growth rate of 6 per cent to 7 per cent was quite feasible. But the growth rate is down to 1.4 per cent. In the policy speech he said that a Liberal-National Country Party Government would start to index personal income tax fully for inflation over three years. This Budget indicates that next financial year tax indexation will be reduced to 50 per cent. This is another failure on the part of the Government. The Prime Minister said in his policy speech that his Government would support wage indexation. But the Government has gone into every national wage case hearing of the Australian Conciliation and Arbitration Commission and opposed full indexation. Where are the bona fides promises of this Government?

The Prime Minister in his policy speech also said:

We will be generous to those who can’t get a job and want to work.

How generous is the Government? The unfortunate unemployed in the main have no chance of getting a job. Many of those with jobs are very worried about their job security. A great number of people, particularly young people, are unemployed. In May of this year, 114,000 persons aged between 15 and 19 years were unemployed. We should note also that 1 5.2 per cent of 1 5 to 1 9 year olds are unemployed. This Government is talking about a future, about a confidence and about an ability to govern this country. As I have said, the Government has failed on every issue.

The Prime Minister said that his Government would redress the situation caused by a loss of prosperity. But it has not done so. He said that his Government would guarantee equity to the rural community because this section of the community desperately needs help. There has been rural crisis. Mr Deputy Speaker, you of all people, would know that the crisis has deepened and worsened. There is a crisis in the rural community at present which could lead to the annihilation of the Government in rural electorates.

The Prime Minister in his policy speech further said:

We will provide a sound basis of financial independence and responsibility for the States and Local Governments with the most significant reform of the federal system since Federation.

We heard a great deal about federalism in the last Budget. We heard about Stage one and then we heard about Stage two. Stage two has to come in this year. If one looks closely at this Budget Speech one can find no mention at all of Stage two. From the point of view of this Budget, federalism seems to have flown out of the window. There is no mention of some form of cooperative effort with the States. The States are scared out of their wits that Stage two, if implemented, would mean that they would have to levy their own income taxes. We wonder what Mr Bjelke-Petersen will say in the coming weeks when, during the Queensland election campaign, he announces whether he is in favour of Stage two of the federalism policy. If he does, will he levy income taxes? If Stage two was so advantageous, if it was so helpful and if it attracted so much attention in last year’s Budget Speech, why is it that no mention is made of Stage two this year? Why is it that the stage that was supposed to be implemented this year is not given even a passing reference? The more one goes through the policy speech entitled ‘Turn on the Lights’ the more one sees that there is not a generating plant even to create electricity to give any illumination.

I turn to some of the matters that relate to my shadow responsibility, the portfolio of the Attorney-General. I will list some of the matters for which the Prime Minister has claimed credit. He told the Australian Legal Convention that his Government had implemented more reforms than any previous government. Let us look at what has happened. The Prime Minister mentioned the Ombudsman. But the Ombudsman was a Labor proposition- it was Labor that espoused that cause. We welcome the fact that the Prime Minister adopted our proposition. Labor also espoused the Administrative Decisions Judicial Review Act. This legislation resulted from a report that Labor encouraged to be made. We are very concerned to think that this piece of legislation has not been proclaimed. If it had been, an unfortunate person named Mr Salemi would have been able to appeal against the decision of the Minister for Immigration and Ethnic Affairs (Mr MacKellar). Mr Salemi took his case to the High Court which divided ‘threeall’ in its decision. The Chief Justice went against him on the issue of law and not on the merits of natural justice. As a result he failed. But his case could have been reviewed if the Administrative Decisions Judicial Review Act had been proclaimed. But the Act has not been proclaimed, perhaps because the Government wants to protect one of its Ministers.

The Administrative Appeals Tribunal Act was a Labor enactment. Yet the Prime Minister is claiming merit for that. Another example is the Criminal Investigation Bill which is still under discussion. Labor authorised the Law Reform Commission to prepare such legislation. The Prime Minister is claiming credit for all of these matters, all of which were initiated by a Labor Government. The Australian Legal Aid Office has not expanded but has contracted and is likely to die of financial starvation. Anyone who seeks legal aid these days has to be in the most impecunious circumstances. One does not get legal aid unless one has some patronage from the Government. If one seeks legal aid on a means test basis, one will fail completely. There has been no expansion of the Australian Legal Aid Office. People are entitled to justice. They are entitled to get the financial wherewithal to sustain their case. People should not be frightened of pursuing their claims because they cannot get adequate legal aid.

The Human Rights Commission Bill is a sham. Australia adopted a covenant in the United Nations and said that it would ensure political and civil rights to people. Anybody on the Government side would know that that covenant is contradicted in Queensland. In that State there is no equality of political and civil rights such as we say should apply throughout the world. Electoral gerrymandering guarantees that people in Queensland do not have valid voting rights as they should have under the civil rights covenant. The Government introduced a Bill on the basis that there should be a human rights commission, but it will be just a breeding ground for complaints and it will have no ability to correct any of the defects. If the proposed commission finds something wrong in a State it will not be able to do anything but write a letter to the Premier and say that human rights are not being applied there as they should be, whether they be political rights or civil rights. In Queensland in recent weeks we have seen threats to the effect that anybody who wants to demonstrate will be dealt with. Under the human rights covenant people are entitled to demonstrate peaceably. Why is it that in this country we have this sort of outrageous conduct and the Government doing nothing about it? This Government has adopted a cosmetic approach in setting up a commission which has no legal teeth to correct defects or to fight against the complete destruction of human and civil rights.

I turn now to the trade practices legislation. A committee known as the Swanson Committee was set up on the basis that it was going to alter the trade practices legislation. That it did. Did it alter it for the benefit of the consumers? I submit that it did not. It clearly showed that where monopolies, mergers, and authorisations of restrictive trade practices were involved the benefit would be given to the private enterprise sector, with the consumers running a very poor last indeed. Have we seen worthwhile Labor legislation adopted as this Government’s policies? Not at all. We have seen effective legislation which we introduced being mangled and strangled. It has been made defective from the point of view of being able to do something for the people.

In the Karen Green case we clearly saw the responsible Minister effectively defying the law and attempting to put the blame on some departmental head. The point was, was it not, that anybody who could not get a job ought to have been entitled to the unemployment benefit? An edict was issued by the Government in which it said that no school leaver was to get the unemployment benefit until a certain period had elapsed. The Government gave a direction about the time factor. Justice did not come into the matter. Karen Green had no chance because of a directive issued by a Minister to a departmental head. Again the High Court was able to show that this Government had done nothing.

The corporations and securities industry legislation is a myth. We are still waiting to hear about it. Meanwhile corporate crime, white collar crime, has increased. Is it any wonder that there is no confidence in the stock market? People are certain that they cannot enforce their rights and they have no idea whether their money is being wisely invested or misappropriated. Consider the disasters that have taken place in a large number of corporations. The people of Australia would welcome and support effective uniform legislation in this field. All lawyers want to encourage uniform legislation throughout this country, but we cannot get it. We have had the benefit of the Rae Committee, a Senate committee which was set up by a Labor Opposition with the support of a minority group at the time. It was set up years ago- at least four or five years ago- to establish what was wrong with the securities and exchange industry, and it handed down a report in which uniform legislation was suggested. But nothing was done. This Government has a pitiful track record.

Consider the situation of primary producers. I sit here every day at Question Time and hear questions asked by members of the National Country Party about what the Government can do for the beef industry and whether producers will be able to get better quotas in Japan. In reply we hear the usual nonsense. Ministers say: ‘Yes, we hope things will get better’. Like Micawber, this Government hopes that something will turn up. Consider the position in Japan at the moment. Our beef is going to Japan on the basis that it is bought in Australia at about 65c per lb. The Japanese Government considers that it is entitled to impose tax on beef. Obviously, that situation relates directly to guaranteeing Japanese producers a very satisfactory income from beefsomething which they would need to keep up with the cost of living in Japan. Beef sold to Japan for about 65c per lb escalates in price to $4 and $5 per lb by the time it is available to Japanese housewives. Is it any wonder that we cannot sell a lot of beef in Japan if they are the facts? Yet we hear all this nonsense to the effect that the quota may improve. There is no chance of it improving. As I said, the price of 65c per lb in Australia is escalated to $4 or $5 per lb in Japan. Therefore, it is important for the future of our rural producers that the Government get out and find new markets. New markets are available.

The Labor Government introduced the Overseas Trading Corporation Bill, but it was opposed by the Leader of the National Country Party (Mr Anthony) on the basis that it was the wrong sort of measure. He said that we should not be dealing with communist countries. It could well be that our best markets for beef are communist countries and that they could operate on a different basis. Is it not ridiculous to think that primary producers are offered 12c per lb for beef while the Borthwicks company or somebody else can sell it for 52c or 60c per lb and declare dividends of 25 per cent? Primary producers are going broke because they have no chance of controlling the marketing of their produce.

Another matter that is causing me some concern is the sugar contract with Japan. We fully support enforcement of the legal issue that there is a contract which the Japanese should be expected to honour. Whilst the Queensland Government apparently is the appropriate statutory authority to engage in the negotiating process that is going on, it has authorised CSR Ltd to act as its agent. That company is carrying on negotiations with a view to enforcing the contract and has gone to law or arbitration about it. In the middle of these negotiations the same group, CSR Ltd, with the full approval of the Queensland Government, has asked the Japanese Government or Japanese banks for a $50m loan. I could not think of any worse action to take. On the one hand the company is trying to enforce a contract and saying that the Japanese have to pay the full price, while on the other and in the same breath it is saying that it wants a $50m loan.

I make this point in conclusion: Where is the Loan Council approval of the Queensland Government authorising CSR Ltd to go to Japan and negotiate a $50m loan? There are shades of the Sankey case there. There was not a mention of that approval. We have never heard a word from the Prime Minister indicating that he has authorised any such loan. How could it possibly help the sugar producer if we are running to the Japanese Government and begging to borrow money- I assume with the approval of the Federal Government- while at the same time we are asking that the Japanese pay the full price under the sugar contract? The whole proceedings are fantastically amateurish. The Government is talking about how it will support people’s rights, but it does not have the ability to do so.

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

Mr HODGMAN:
Denison

– It is an honour to participate in this Budget debate. I think it is appropriate at this time to mention briefly the extraordinary amendment that has been moved by the honourable member for Gellibrand (Mr Willis) to the motion for the second reading of the Appropriation Bill (No. 1) 1977-78. The Labor Party contends that the Budget should be condemned because, as it claims, it will intensify and prolong the recession. That is wrong; in fact we are corning out of the recession. Secondly, it claims, in a typical scaretactic manner, that the Budget will increase unemployment. That is demonstrably wrong. Thirdly, it claims that the Budget will have little effect on inflation. I simply draw attention to the fact that inflation has dropped since the Labor Government was thrown out of office. It was then running at 16 per cent and now, as a result of this Government’s economic policies, it has dropped to 9.2 per cent. Fourthly, the Opposition claims that the Budget makes regressive changes in the taxation system. On the contrary, the tax changes are the most progressive and fair ever introduced in Australia. Lastly, the Opposition makes the extraordinary claim that in some way the Budget will reduce living standards. I submit that the amendment is unworthy of the Opposition and that it does little to enhance the debate on the Budget.

For the benefit of people all over Australia who are listening to this debate, it is perhaps appropriate that I point out that this is one of the few debates in the parliamentary year in which a member of this House is permitted to speak on virtually any subject, provided that it comes within the range of the functions of government. I wish to speak on two matters. One is related to foreign affairs and is a matter of concern to me and, I believe, to a large number of other Australians. The second part of my speech will relate to the economy and the achievement of economic recovery as a result of this Government’s policies.

What I am about to say about East Timor I say conscientously. I wish to preface it by making some very brief but general remarks. Firstly, nothing I say amounts in any way to a criticism of this Government’s policy on the question of East Timor. In fact, what I am about to say is based on statements made in this House and outside it by the Minister for Foreign Affairs (Mr Peacock) and votes by Australia in the United Nations. I take this opportunity to praise the Minister for Foreign Affairs for the manner in which he has handled a very difficult problem and what I say is against the background of the fact that two out of three Australians oppose the method of the takeover of East Timor by Indonesia. Albeit, Indonesia is an ally of this country we cannot condone what was done in 1975 and is being done right up to the present day. I believe that what I say would be supported by many people who believe in such organisations as the International Red Cross, the Catholic Commission for Justice and Peace, Catholic Relief, Community Aid Abroad and a large number of members of the Returned Services League who served alongside the East Timorese in World War II when 50,000 East Timorese out of a total population of Timor of only 500,000 fell. I believe that what I say would be supported by men and women everywhere who believe in human rights.

The fact that major military activity has occurred and still is occurring in a country one hour’s flying time from Darwin poses a serious threat to Australia’s national security. This threat to our national security must concern every thinking Australian. Closely related to the military action to which I refer is a fundamental moral question which must arouse Australia’s national conscience, a cri de couer, which must stir Australia’s moral fibre and to which Australia must undoubtedly respond. I refer of course to the dilemma of Australia’s attitude to Indonesia and to East Timor. It was for the above reasons that I and other back benchers of the Parliament of the Commonwealth of Australia deemed it our duty to seek visas to permit us to visit East Timor on a fact finding mission. Before I detail the precise circumstances of our submission for visas and what has occurred since that date I shall for the record briefly retrace my involvement in and my concern for the people of East Timor.

Like most Australians during 1975 I read the Press reports and followed television news as to what was occurring in East Timor subsequent to the withdrawal of Portugal. Like most Australians I knew little of Fretilin, UDT and Apodeti. The names of the leaders of the respective groups were unfamiliar to me and the details of the civil war immediately preceding the Indonesian intervention were hazy and confused to say the least. As so often happens, we found the groups labelled. For example, Fretilin was almost immediately branded a pro-communist organisation notwithstanding the fact that the overwhelming majority of its members were practising Catholics. As the months of 1975 rolled on there seemed to be a massive public relations campaign to brand Fretilin as a communist organisation, presumably supported by either Russia or China or both, and as such representing some sort of potential threat to Australia. In simple terms, UDT were the goodies and Fretilin were the baddies, and despite our enormous national apathy to what was occurring in East Timor, most people thought at that point that Indonesia might very well annex the small former Portuguese territory. East Timor, which has been in Portuguese hands for over four centuries, contained about 600,000 people and most of us, most Australians, to our eternal shame did not involve ourselves in what was going on. We watched with apathy a major military invasion on 7 December 1975- coincidentally the anniversary of Pearl Harbour- and most of us were ignorant at that time of high level discussions between the leaders of the then Australian Government and the Government of Indonesia which immediately preceded the blood bath of East Timor. The evidence now is overwhelming that to its eternal shame Australia gave the green light to the proposed Indonesian invasion. We all must share the moral culpability which flows from that action, that encouragement, that aiding and abetting, performed on behalf of the Australian people by its then leaders.

Through 1976 my concern in conscience as to what had happened in East Timor increased commensurately with the reports which started to emerge. The reports of atrocities, mass executions, pack rapes, looting of churches, persecution of priests, famine, deprivation and hunger, malnutrition and disease- whether the result of Indonesian activities or Fretilin activitiesappalled me. That this could go on in a country so close to Australia while our nation slumbered in national apathy and sloth disgusted me. I am neither pro nor anti Indonesia. I am neither pro nor anti Fretilin. I do believe in human values and I do believe in seeking, discovering and revealing the truth and, whatever had happened in East Timor, I was then and still am now determined that history should know. In December 1976 the Catholic Commission for Justice and Peace published a report expressing grave concern for the welfare of over 500,000 East Timorese. I could not understand why a reputable international organisation like International Red Cross should be barred from visiting East Timor. I gave vent to my feelings in an article pulblished in the Australian on 21 February 1977. I asked then and have asked since why, if there was nothing to hide, a United Nations mission, the International Red Cross or an Austraiian parliamentary delegation could not be permitted to visit East Timor to see the truth for themselves.

Late in the autumn session of this Parliament, I and a group of backbenchers decided to ask the Minister for Foreign Affairs whether it would be possible for a small parliamentary delegation to visit East Timor on a fact finding mission. The Minister took our submission to Cabinet and Cabinet’s judgment was- and in my opinion I should say I believe it was wise judgment- that the Government would neither support nor oppose the proposed visit. To have made the visit an official parliamentary delegation may well have had major implications according to international law. Our Government to its credit has not recognised Indonesia’s incorporation of East Timor and I would not have wished to have been party to any act which would have varied that stand to any degree. In short, the Government told us that our proposed delegation would not be a delegation officially representing either the Government or the Parliament but we were free to go ahead and make our own arrangements.

On 26 July, a formal submission requesting visas was forwarded to His Excellency Mr Nurmathias, Ambassador of the Republic of Indonesia to Australia. We were told then the decision would have to be made in Jakarta and we impressed on the Embassy officials the urgency of the matter as we had hoped our visit could eventuate before the Budget session of this Parliament. Day by day our requests for a response to our submission proved fruitless. An obviously embarrassed Indonesian Embassy in Canberra repeatedly had to tell us that no answer had been forthcoming from Jakarta. Finally, six members of this Parliament called upon His Excellency in an endeavour to resolve the matter. We presented him with a protest note signed by 80 members of the Parliament of the Commonwealth of Australia, members from both this House and the other place and members from both sides of each House. His Excellency, who was at all times courteous and friendly, then gave us the first of a number of explanations emanating from Jakarta as to why we were not to be granted visas. Six or seven varied and, some of them, contradictory explanations were given but the best we can say is that they were all unconvincing and unsatisfactory in the extreme. Coming as they did so soon after a visit by two of our colleagues from the United States Congress- one of them a woman- they represented in our judgment an affront to those of us who without fear or favour wished to visit East Timor to establish the facts.

Through you, Mr Deputy Speaker, I ask this Parliament and the people of Australia: Can we as a nation ignore reports of the slaughter of up to 100,000 of our fellow human beings living in East Timor, whether the slaughter was the result of action by Indonesia, Fretilin or any other group? Surely it is too monstrous and deplorable an act to be swept under the carpet? I should say at this point of tune that unlike the Government of Indonesia, the representatives of Fretilin have said they have no objection whatsoever to any form of international inquiry into atrocities alleged to have been committed by them. Why does Jakarta deny the right to its closest ally in geographical terms to seek and reveal the truth? Can we and the Australian nation ignore reports of mass executions including 2,000 at Lamaknan; 27 women both Chinese and Timorese on the wharf at Dili; 59 men on that same wharf in front of a crowd of 500 which was ordered to count; the murders at the Catholic Church of San Antonio in Dili; the execution of Chinese community leaders in the shop Toko Lay; the murder of a group of Timorese who dared to display an Australian flag from the third floor of a Dili building; the mass murders in the Taibesse area; the slaughter of 500 Chinese at Villaverde; reports of looting of Catholic churches; rounding up truckloads of young girls who were then subjected to mass rape; the desecration of the grave of Father Martins in Maliana; and last but not least, the vile and brutal murder on Thursday 16 October 1975 of five Australian newsmen, three of them shot in cold blood by an officer whose real name or war name was Lieutenant Markos.

These are but some of the reports which have emerged. I do not know whether they are true, but they are certainly too manifold to be ignored and swept under the carpet. In late 1975 the Indonesians categorically denied that there were any Indonesian troops in East Timor when in fact there were 30,000 of them-many of them supplied with Russian arms and equipment. Two weeks ago I said, and my information was true, that a major military operation was under way in East Timor involving up to 16 battalions of Indonesian troops. You all know the categorical denial from Jakarta, but five days later the Indonesian Defence Minister was forced to publicly admit that Indonesian forces were engaged in what he euphemistically described as a mopping up operation

I cannot, Australia cannot, the world cannot ignore East Timor and pretend it did not exist. I have at all times sought the truth. I deplore the fact that our parliamentary delegation has had the doors slammed in its face, but one thing above all is certain. The truth will out. The truth will be revealed. At some time in the future, history will recall that it would have been far wiser for Indonesia to have granted us visas, that it would have been far wiser if we had not been obstructed in our search for the truth. But then I suppose the last thing our Indonesian friends would have wished would be for half a dozen Australian parliamentarians to have been present in East Timor at this time in the light of their public admission of this so called mopping up operation.

The United Nations and the International Red Cross should now be admitted to East Timor. The matter has become far too grave and far too serious for a committee group of Australian parliamentarians. We are not pro-communist. We are not even of the Left. I point out in passing that I do not appreciate being described as procommunist as I was the other day. If it were not so serious, it would be the joke of the year. We sought the truth and it was denied us. The fact that Indonesia is anti-communist does not for one moment justify what, in fact, has been done to us. Hitler was anti-communist yet the world appeased his actions because of its fear of Bolshevism. In 1977 let us not permit a repetition of the crime against humanity which was perpetrated in 1938. In a spirit of goodwill I congratulate honourable members of Her Majesty’s Opposition for what they said on this very subject on 14 September. Paragraph 6 of their resolution which was made available to the public- I commend and congratulate them for it- stated:

The Federal Parliamentary Labour Party:

considers that, in view of accusations of atrocities, Indonesia would be wise to allow free movement of UN observers, the Red Cross and members of the Australian Parliament in East Timor to clarify the position.

The scene now switches to the United Nations. I believe that countries such as the United States of America, Holland, Sweden, and people all around the world who believe in human rights will take up this issue. I believe that it was, to say the least, unfortunate that a small group who simply wanted to find out the truth, without fear of favour and without bias or ill will, found the door slammed in its face.

In the time remaining to me I turn to the Budget. In eight simple points I urge the people of Australia and the people in the Parliament, to recognise that the Budget which we are debating at the moment is a good budget and one which will undoubtedly lead to Australia’s economic recovery. Why is it good? In eight, simple layman’s points the following seem to me to be obvious: Firstly, taxes are down. If a reduction in taxation is not good news for the Australian taxpayers, I do not know what is. As chairman of the Fifty Cents League which campaigned in a national compaign for lower taxation, a reduction in the marginal tax rate and the establishment of a flat tax rate, may I say that I and my colleagues are delighted. We congratulate the Government on its achievement in at last realising that people cannot be taxed harder than they can earn the money, and that people cannot be put into the position of being treated like stones from which blood is wrung. Secondly, pensions are up. Every pensioner m this country will receive an increase in his or her pension in November this year. I believe that is good news. Our Government has consistently increased the pension in accordance with movements in the consumer price index. I believe pensioners will welcome the increase. For the record I indicate that as from the first pay day in November 1977 the standard or single rate pension will increase by $2.20 to $49.30 a week and the combined married rate pension will increase by $3.70 to $82.20 a week. Thirdly, there have been no cuts in spending on health, education and social welfare. Whatever the Leader of the Opposition (Mr E. G. Whitlam) and other honourable members on the Opposition side say, the fact is that there have been no cuts in spending in those areas. Real spending has been maintained and for this to have occurred at a time of economic trouble is, I believe, something for which the Treasurer (Mr Lynch) and the Government should be commended. Fourthly, for the drinkers and smokers of Australia thank heaven that unlike the previous government, this Government left the price of cigarettes and beer alone. Fifthly, Australia needed and needs a petrol exploration tax from which funds can be raised for further development and exploration of Australia’s petroleum reserves. If we do not do that, we will run out of our own supplies of oil within the next five years. In the 1980s we will be unable to meet the challenge of the fuel crisis within this country. Sixthly, inflation is coming down. I am delighted that the Leader of the Opposition is in the chamber because when his government went out of office on 13 December 1975 inflation was over 16 per cent. Now, on a fair and accurate basis, it is 9.2 per cent. Seventhly, unemployment will come down despite what the critics on the other side say. They try to make political capital out of unemployment which, frankly, is something I deplore. Lastly but not least, interest rates are coming down. Short term Treasury interest notes were reduced seven weeks ago. The bond rate came down two weeks ago. The loan rate will come down within the next three to four weeks and commercial interest rates will come down too. That means there will be lower payments by young people buying homes, less pressure on small business and a return to economic prosperity. It is a good Budget. It should be sold as such. It is a Budget which will lead Australia back on the road to national economic prosperity, a road which we regrettably left for three years, between 1972 and 1975, but to which we have now returned. I support the Budget.

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

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

– I support the amendment which the honourable member for Gellibrand (Mr Willis) has moved to the Budget Speech of the Treasurer (Mr Lynch). First, I mention the speech of the Prime Minister (Mr Malcolm Fraser) on the Budget which was delivered last Thursday night. Friday’s newspapers delivered their judgment on it by virtually ignoring it. The Australian Financial Review alone of the major dailies gave a report of the speech, although a perfunctory one. But on an earlier page were two reports which provided the complete squelch. Under the general heading The Economy’ there were two headlines on page 5 of last Friday’s Australian Financial Review. The first headline was: ‘Worsening Jobless Trend Shows in August Figures’, and the other was: ‘Industrial Stoppages Lowest Since 1968’. In a few words, on a single page, the whole economic strategy and the whole electoral strategy of the Fraser Government is exploded.

The result of two years of this Government’s economic management is the worst unemployment since the Great Depression. In a month which has seen an escalation of ministerial denunciation of employees’ organisations, emergency legislation of an unprecedented kind directed against the Government’s own employees, an orchestrated intimidation of the Conciliation and Arbitration Commission and the dusting off of the catch-cry ‘Who’s running the country?’, the Australian Bureau of Statistics reports that fewer working days were lost in the June quarter of this year than in any June quarter since 1968. Significantly, both sets of figures- the unemployment figures and the industrial figures- - come from the Bureau of Statistics. The Prime Minister has tried to rubbish the Commonwealth

Employment Service statistics. But now the Bureau’s seasonably adjusted figures and the unadjusted figures issued by the Commonwealth Employment Service agree, there is a disastrous slide in employment. The Commonwealth Employment Service figures show 5.4 per cent of the work force unemployed. The Bureau puts the figure at 5.7 per cent. That is 36 per cent higher than in October 1975.

During the three years of my Government there was an increase in jobs of 250,000. Since November 1975 there has been a reduction in jobs of 13,000. That is the measure of the Fraser Government’s competence. That is the cost of its policies. Yet the Prime Minister claimed last Thursday:

At the same time, we have given high priority to programs for relieving unemployment, especially for the young.

Tell that to the 355,000 now unemployed, or the 450,000- 7 Vi per cent of the workforce- who will be unemployed early next year. Tell it to the parents of this year’s school leavers- the best educated generation we have so far produced, a generation in which the community and families have invested so much and whose expectations were correspondingly and properly higher than those of any previous generation. The unemployment created by this Government cuts across the classes, cuts across the regions, cuts across industries, trades and even professions, and cuts across age groups. Some sections are more badly hitthe young, the migrants, the rural town dwellers -but no section can now feel absolutely secure. The social and economic consequences of unemployment now reach through to the families of the middle income earners- the people who swept this Government in and who will just as quickly now sweep it out.

A mere four weeks have passed since the Budget was introduced. Each week new indicators have shown a worsening situation- worse unemployment, worse inflation, deteriorating balance of trade, further pressure on the dollar, declining business confidence, sluggish retail sales, a fall of 0.6 per cent in non-farm product in the first half of this year, a fall of 1.8 per cent in personal consumption in the first half of this year, a fall of 9.3 per cent in private capital investment in the first half of this year, and a fall of 10.8 per cent in investment in dwellings in the first half of this year. It is no wonder that scarcely a day has passed without some variation or reversal of the Budget, even before it has been passed. The Budget Speech was not 48 hours old before the Treasurer and the Prime Minister contradicted each other on the extent and cost of the tax changes. It was barely a week old before the

President of the National Party in Queensland, Mr Sparkes, proclaimed that there would be a rural mini-Budget to repair the omissions of the actual Budget. A week after that the Treasurer denied that there would be any such Budget. Within hours, he announced the restoration of tax averaging arrangements for farmers which had applied since 1934 but which had been forgotten in this year’s Budget.

Three days after the Prime Minister’s speech in the Parliament there was his broadcast to bis electorate, hailed as a declaration of ‘no more spending cuts’. It would be extraordinary, even for this Government, if new cuts were to be announced or foreshadowed less than a month after the introduction of the annual Budget. In his broadcast the Prime Minister said:

The Government has twice produced a Budget that reduced the deficit by more than half a billion dollars.

What he does not say is that the two Budgets provided for an additional $1 billion in concessions and subsidies which have failed to achieve their declared economic aims. The investment allowance did not achieve an investment-led recovery, the abolition of the minerals export levy did not achieve an exportled recovery. A handful have benefited- mainly internationally owned companies- but there has been no benefit at all to the Australian people, in terms of either better conditions or a healthier economy. Yet to find that $1 billion required the dismantling of a whole range of programs of vast benefit to the Australian people.

Today the Prime Minister described this process as ‘fiscal reality’. The reality is that there has been an economically futile and socially inequitable splurge of $1 billion at the expense of basic programs, many of them made in agreement with the States. Expenditure on the hospitals development program has been cut from $ 107.2m in the Hayden Budget 2 years ago to $50m in this Budget. Expenditure on the national sewerage program has been cut from $1 1 1.3m in the Hayden Budget to nothing in this Budget. Expenditure on growth centres nas been cut from $55.4m in the Hayden Budget to $1 1.93m in this Budget. The area improvement program received $ 15m in the Hayden Budget. No new grants have been made this year. The leisure assistance facilities program received $6.3m in the Hayden Budget. No new projects have been approved this year. The tourism development program received $2.9m in the Hayden Budget. No new projects have been approved this year. The water resources program, begun by Menzies in 1963, has now been abandoned. The aged persons homes scheme, introduced by Menzies in 1954, received $94.2m in the Hayden Budget. It will receive $63.4m in this Budget. These are things that the Prime Minister called ‘a mad spending spree’ two years ago- programs slashed or scrapped to make way for the Government ‘s own $ 1 billion splurge.

The Australian Labor Government was given the task of managing the Australian economythe economy of a great trading nation- at the most difficult time for the world economy since the Great Depression. Whatever our mistakes, the economic difficulties in Australia were shared by all our trading partners. In the financial year 1975-76, during which our basic policies operated, recovery was under way; inflation was being curbed. The Budget of 1976 destroyed the recovery. The devaluation of November last ruled off the book. It renewed inflation. After that devaluation the present Prime Minister asked the Adelaide Chamber of Commerce, rhetorically:

Is there a man here who would say they would sooner put Australia into hock to the tune of $ 1,000m rather than devalue, because that was the alternative offered to us by our official advisers?

Yet already in this financial year the Treasurer has announced an overseas borrowing program of $850m- with still nine months to go in the fiscal year. The slide which occurred in the four months before November last is being repeated now. Since the beginning of April there has been a drain of about $ 1,080m from our international reserves. This fall occurred in spite of a $685m addition to reserves in August through a revaluation of our gold reserves. The incompetence of Christmas 1971, the incompetence of last November, is being repeated. Simply, this coalition cannot manage Australia’s exchange rate. The speculators know it; the world knows it; blind Freddie knows it.

The Budget strategy is in disarray. The Government’s electoral strategy is in disarray. Well may we ask ‘Who is running the country?’, when there is so manifest a lack of leadership from the elected Government. When the Chairman of the Uranium Producers Forum fronts the Liberal Party Secretariat with an open cheque book one day last week and the Government retreats from its position on a super pro/it tax the next day, the people can get a fair idea of who is running the country. The electoral strategy mirrors the economic strategy: The chopping and changing in a desperate search for some economic solutions; the kite flying, the rumour mongering, the inspired speculation, the threats of confrontation- all in a desperate search for an election issue. And well may this Government be desperate for a diversion, a distraction, a phoney election issue. In South Australia, where the national issue of unemployment obliterated every phoney issue raised by the South Australian Liberals, the Dunstan Government has been returned with a swing of six per cent. In non-metropolitan areas the swing averaged eight per cent. In country towns it was as high as 1 5 per cent. In one that I visited it was 22 per cent. In New South Wales, Labor has reasserted its traditional strength as it did in the Northern Territory only a month ago. In Queensland, a National Party Premier is as poisonous in his propaganda against this Federal Government as he was against mine, while the Liberal Party is riven with internal dissension. Victoria- the second State, the Prime Minister’s State, the headquarters of the Liberal Party of Australia- is racked by scandal, division and disillusion. As the National Times said last weekend:

Many Liberal branches are growing more concerned at the performance of the Hamer Government which has, in the past 12 months, sold a Government building to the Liberal Party, suppressed a report by a leading suk on police malpractice and corruption, granted Government contracts without the benefit of competitive tenders, and concluded a number of deals in the housing development area which are unsettling to some people.

In Western Australia the honourable member for Tangney (Dr Richardson) announces he is leaving the sinking ship because, according to bis research officer, ‘the Government has broken its election promises’.

Dr Klugman:

– He had his finger on the pulse for the first time.

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

-The honourable member, who is a medical practitioner, has his finger on the pulse at last.

Dr Klugman:

– He has it on the pulse for the first time. He is a gynaecologist.

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

– I am told that the honourable member for Tangney is a gynaecologist. No wonder things have miscarried. The people, not least Liberal supporters, are now waking up to where the real scandals lie in this country and where the real skeletons are hidden. It was not my Government whose Ministers associated with and accepted aid from a managing director who has misappropriated nearly $lm, a grazier-financier who has been declared bankrupt and a solicitor who has been struck off the rolls.

The truth is that this is a tainted Governmenttainted in its creation, tainted in its associations. The people are waking up to it very quickly. Most of all they are a wake up to the real nature of this Government’s policies and the consequences of those policies. For all the disruption and division this country has been put through for two years and more by the men who now form this Government, what has Australia got? It has the worse unemployment since the Great Depression; inflation was higher last year than in 1975-76; it has reduced living standards; community services are declining rapidly; the dollar is vulnerable; and farm incomes are lower. This is the record after two years of superior economic management; this is the record of the men born to rule. They wrecked one elected Government so they could put their economic and social prejudices into practice. Now they are wrecking another- but with superb irony and supreme justice the Government they are wrecking is their own.

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

Mr LLOYD:
Murray

-Professor Don Aitkin, in his weekly article in the National Times immediately after the presentation of the Budget, made a significant assessment of the role this Federal Government sees for itself in Australia today, and of its judgment of how the electorate sees government. I quote from that article:

For the past 30 years, since the wool boom of the late 1940s, in fact, there has been little change in income tax rates. On the whole, the rates stayed as they were, incomes rose because of economic growth and mild inflation, and governments each year had more money to spend.

Since there was persistent public demand for government spending, and governments which spent seemed to stay in office, governments of all political persuasions were happy to spend this useful increment.

Well, things have changed. Hear our Treasurer ‘Australians should be able to determine to a greater extent how they spend their incomes. “That is, I take it, governments are not all-wise, and citizens may have a better idea of what they would wish from some of their marginal dollars than has the Government.

Interestingly, notions like these are gaining attention overseas too, and they follow in the wake of a certain disillusion with the potential of government that seems to have hit Western democracies in the last few years.

In fact, the Government is simply less certain about what ought to be done, and less sure about how to do it On the whole this seems to me to be a good thing, if only because immodest, pretentious governments are both a pain in the neck and fearful wasters of money. (I should make clear that in my view the coalition governments of the late 1960s and early 1970s fit this description as well as the Whitlam Government which followed them).

But reducing government expenditure and holding down public service expansionism is only part of the necessary change of heart What has to accompany it, if the result is to be other Scroogeism, is a re-assessment of priorities.

What is the principal task of the Federal Government? What sorts of goals are possible?

We are in a new era, and its key notes are consolidation and restructuring. Growth, boundless growth, and the exuberant confidence that went with it, is past. Governments are more cautious and more pessimistic. You sort your problems out, they are saying, don’t expect too much of us. And here’s some of your money back. From this perspective, the Whitlam Government was the last of the optimistic governments, the last of the expansionists.

I believe that this debate reflects that assessment. Speakers from both sides of the House have far lower expenditure horizons and belief in the capability of government to solve all the problems of our society than has been the case in any of the previous six Budgets in my parliamentary career. The possible exception to this was the speech of the present Leader of the Opposition (Mr E. G. Whitlam), who has just spoken. But what is of note is that even he, whilst criticising the expenditure cuts that might have been made, has not said that a Labor Government would reintroduce the measures which have been cut. He has not said that a Labor government would increase government expenditure massively. I think that has been the general point of many Opposition speakers: They have been critical but they have not said what a Labor government would do.

Most importantly, the message is that people do not want a return to the big spending, inflation creating, taxation increasing, big brother, socialist style of government that Australia so decisively rejected in 1975. This changed concept of government confirms this Government’s view that inflation is our No. 1 enemy and must be beaten before the economy and employment can return to normal levels. The measures taken already by the Government, now reinforced by the reduced Budget deficit, indicate that the Government is succeeding. The inflation rate is falling and because of it we are now seeing the first reduction in interest rates for several years.

This Budget contains many worthwhile benefits and initiatives, introduced in spite of the reduced deficit and in spite of the knockers who predicted cuts in such things as education, the removal of the $16 per day private hospital bed subsidy, a reduction in social security benefits and so on. The most important benefit contained in the Budget is the genuine and most significant reduction m personal income tax since Federation. If honourable members do not believe me, they should just remember what Professor Aitkin said. This benefit will accrue on top of the taxation indexation benefits of last year and again this year. All taxpayers will gain. Many people will not pay tax at all because the starting point for paying tax for a single person will rise by almost $1,000 to $3,750.

Two groups in particular will benefit. The first of these is the average wage earner. Because the marginal tax rate has effectively been abolished, the disincentive to work harder through overtime or by some other means or to accept a more responsible and more highly paid job is no longer present. The second group is that of the farmer. The new income averaging system for farmers not only removes the $50m extra tax which the Hayden Budget imposed on farmers but it also aids them at all income levels. The $16,000 ceiling is abolished. Farmers on falling incomes over the five-year period will no longer pay additional tax. Low income no-tax years will be more effectively incorporated. The farmer will be able to opt in and out of income averaging at will.

I am pleased that, in spite of the restriction on government expenditure, net cash outlays for primary industry have increased by $82m on last year’s figure. This figure will increase because of the open-ended nature of many of the rural policy commitments. The nitrogenous fertiliser bounty and the fresh apple and pear stabilisation scheme will continue to receive the present level of government assistance, contrary to the Industries Assistance Commission recommendation to phase them out. They will cost the Government this year approximately $17m. A final allocation of $1.3m for the tree-pull scheme is also contained in the Budget.

An increased amount of $47m has been made available for the broadened rural adjustment scheme, which now includes household support and farm improvement as well as the old debt adjustment and farm build-up schemes and the special concessional interest rate carry-on loans for dairy and beef producers. The beef industry will receive about $40m in Commonwealth grant money for brucellosis and tuberculosis eradication and to pay for meat inspection charges which the Labor Government had previously charged to the primary producer.

Together with other rural members, I have spoken for some months in the party room, in Parliament and with Ministers on the need to introduce a classification scheme and then a New Zealand type price buffer scheme, as well as making short term arrangements to provide urgently needed cash for producers in dire circumstances. I am confident that short term assistance will be provided and that the Government will assist financially the installation of the necessary equipment on the beef chains for classification. I am also more confident now than I was six months ago when I last spoke on this matter in the Parliament and when I made representations to the Minister, that a New Zealand type stabilisation scheme is likely to be introduced.

However, I want to make the point that it is one thing for a producer organisation to say that something should be done and it is another for it to develop a practical scheme that will actually achieve what is intended. Furthermore, the growing number of people claiming to represent beef producers and putting forward sometimes contradictory and unresearched proposals makes it harder for government to establish what the farmer really wants. It is one thing to say that the Government should immediately introduce a classification scheme and it is another to get agreement between the States and the industry on which equipment should be installed. I repeat what I said earlier this year, namely, that if the actual introduction of an objective classification scheme is delayed because of technical difficulties, a visual scheme based on Meat Board types should be introduced so that a stabilisation scheme can commence. New Zealand operates its stabilisation scheme on a visual classification basis.

The establishment of the Rural Bank is, of course, the big news in the Budget for primary producers. It is to be a bank that will provide long term loans for farm purchasers. It is important that the actual legislation and administrative arrangements with the private credit institutions, such as the banks, be finalised well before Christmas so that the Rural Bank can at long last become operative. Once it is established the election policy of having a young farmer establishment scheme must be developed so that we have a scheme similar to those already operating in New Zealand and Canada. Once the Rural Bank is operating we must look at the remainder of small business and its need for better credit facilities so that it can be helped in the same way as the rural small business sector will be helped with the establishment of the Rural Bank. One way in which that can be done is to broaden the charter of the Commonwealth Development Bank so that it can more effectively incorporate all forms of small business.

There are many aspects of the Budget which are on-going. Critics of the rural sector of the

Budget forget that point. They forget that many forms of assistance are either on-going, as I said, or are announced at the appropriate time rather than in the Budget. I refer, for example, to the dairy industry. The Government announced in good time the continuation of underwriting for the 1977-78 season. The introduction by the Government of underwriting and now the announcement of its continuation is a most important factor in the present stability and slightly better optimism in the industry. The final cost to the Commonwealth Government for the 1976-77 underwriting will be somewhere between $8m and $9m; and most of that will be in respect of butter.

I turn now to wool. Prior to the commencement of the wool selling season the Government announced that the minimum reserve price on a whole clip basis will continue at 284c per kilo clean for this selling year, if you like, and for this financial year. Contrary to predictions made by some of the knockers, the superphosphate bounty will continue and will cost the Government about $40m. Country people also tend to overlook what the Government is doing for local government. State government Press releases on council or road grants forget to mention that quite often that money comes from the Federal Government. Sixteen councils in the Murray electorate will receive more than $2,600,000 this year from the Commonwealth Government. That figure represents an increase of 19 per cent on last year’s allocation. In the case of some councils the grant is now 40 per cent to SO per cent of rate income. So imagine the rate problems our rural shires would have if they did not receive that form of aid.

I turn now to roads. The Government has introduced a new three-year Commonwealth Aid Roads Agreement to supersede that introduced by the Labor Government and the allocation will double from $15m to $30m this year for rural, local and arterial roads in Victoria. That money will be spent on roads by rural councils. However, the Victorian Government may reduce its commitment to these road categories so that local councils may not be much ahead financially.

Sitting suspended from 6 to 8 p.m.

Mr LLOYD:

-Before the suspension of the sitting I was talking about what is in the Budget for country people. In particular, I referred to the dramatic increase in road grants for country municipalities. In Victoria this year the allocation for rural local and arterial roads, that is money spent by councils, doubled from $ 1 5m to $30m. I made the point that it is possible that the Victorian Government may reduce its commitment to these road categories and local councils may not be much ahead financially unless State members of parliament can prevent this happening.

The Minister for Health (Mr Hunt) is to be congratulated for at last achieving the go ahead for a maximum security quarantine station on the Cocos Islands. Over $ 12m has been committed for this project and other capital works for quarantine facilities around Australia which are of tremendous importance to the continued health of our livestock industries. There are other measures of special interest to country people. One is in the field of education, where in the Isolated Children’s Allowance Scheme, certain allowances were increased in 1977. There are announcements in the Budget of increases in some of the other allowances in 1978. The Isolated Children’s Allowance will cost the Government in total, $ 1 3.8m. What is causing interest at home at present is that part of the Murray electorate is in one of the five special areas in Victoria for which funds have been advanced by the Federal Government for the Special Rural Disadvantaged Schools Program. Many people in the Murray electorate and I have been urging Ministers for Education to change the criteria for disadvantage. Rural people were left out of this category because of an out-moded criteria system. The Federal Government has responded and is to put $600,000 into Victoria for trial projects, $100,000 of which is now going into the Nathalia, Echuca, Rochester and Rushworth areas of the electorate.

Mr Fisher:

– Whose electorate is that?

Mr LLOYD:

-That is the Murray electorate. The Government has also increased the Tertiary Education Assistance Allowance (TEAS), that is living allowance, for 1978. That will be of benefit to country people because of the number of students who have to live away from home to obtain a tertiary education. The community health program budget has been increased. This is of significance to country people because that program allows a greater flexibility in health expenditure. In a number of community health grants the special requirements of country people can be met by this program whereas they cannot be met by the more inflexible general health grants.

The new nursing home benefits to operate from 1 October offer greater security for people who require to enter a nursing home or place their relations in one. This is an area of considerable concern to country people, particularly as many nursing homes are some distance from the area in which they live. There is always a fear of insecurity. One should always remind country people and all self-employed small business people of the importance of the change to the means test for pensions by abolishing the notional 10 per cent return on capital, that is the capital requirement, and taking into account only the genuine income. This is of tremendous value to farming people who want to retire and move out to allow the next generation to come in and to small business people whether they live in the country or the city.

The Myers report has recommended that farmers be no longer eligible for unemployment benefit. I sincerely hope that the Government continues to reject this recommendation. If unemployment benefit is cut out for farming people it will be a great injustice. I believe it should be extended for all self-employed people. Last winter, that is the winter of 1976, in the Murray electorate over 700 farmers qualified for the unemployment benefit. As it is adjudged on an annual income basis, that means that at least 700 farmers on an annual income basis- honourable members should remember that this includes return on capital investment and a return for skill and labour- earned less than the unemployment benefit. It is a tragic situation that some 700 people qualified for the unemployment benefit. However, it kept them in living expenses for a couple of months. This winter the number is down to 200 mainly because of the underwriting arrangements for the dairy industry and the better payments by canneries because of the special loans this Government provided when it first came into office.

The Migrant Information Service will continue. This is important because it is now beginning to provide a service for migrants in country areas. The handicapped children ‘s allowance criteria in respect of incapacity have been extended and relaxed. This has always been a concern for country people because of the problem of isolation from some of the special facilities available in the large centres. The cost to the Government will increase from about $ 1 1 m to $ 1 8m this year. I shall talk further on the estimates for health, welfare and social security, but I make the point that much still has to be done by this Government for country people. There is the fuel equalisation scheme. Federal estate duties have at least to be updated for inflation, if not abolished as some of the States are now doing.

Mr King:

– And gift duty.

Mr LLOYD:

– In relation to gift duty we had a figure of $10,000 five years ahead of the Victorian Government. We also require a statutory control for the Canned Fruits Board so that canning fruit growers can receive payments similar to those which dairy, wheat and wool producers are receiving. There are the salinity problems in the Murray River. There are the real problems of the cost of telecommunications for country people. There is the need for more money for upgrading of country airports. There is the need for rebates for transport and accommodation costs incurred by country people who have to visit a specialist in a far away city. If a child has to attend a hospital considerable expense for the parent to be near the child is involved.

There is also the need for a general agricultural stabilisation statute in this country similar to that in Canada and, perhaps closer to home in New Zealand since the Zanetti report, to provide a legislative base on which to work for any rural industry which wants stability and is prepared to make a contribution itself. I emphasise that. When one considers the things that still need to be done for rural people and then takes into account the record of the previous Labor Government and the minimum attention paid to country people in speeches on the Budget by honourable members opposite, one can see that the Labor Party has no priority for country people. This indicates also that Liberal-National Country Party representation and endeavour are the only hope for country people. On that basis I support the Budget.

Dr KLUGMAN:
Prospect

-One of the interesting aspects in this Budget has been the attempts especially by the Prime Minister (Mr Malcolm Fraser) and the Treasurer (Mr Lynch) to describe the taxation measures as far reaching and revolutionary. As they do not generally tend to support revolutions, I assume that in this particular case they are referring to what they claim are beneficial changes resulting from the Budget. The important thing to realise when looking at the Budget is that there are no benefits for the taxpayer. Whatever our individual attitudes may be as to the rate of taxation which ought to be adopted by a government it is completely dishonest for this Government to claim that the taxation measures proposed in this Budget to commence on 1 February next year are greatly beneficial. We have only to look at the actual Budget. The Budget Papers show that pay as you earn taxation, that is the tax deducted from wage and salary earners, will increase this year by 17.2 per cent while wages and salaries are expected to increase by only 10.5 per cent. It is fairly obvious that if net pay as you earn taxation is to increase this year by 17.2 per cent whilst wages and salaries will increase by only 10.5 per cent, there will be an increased proportion of wages and salaries going to the Government.

Mr Hamer:

-That is wrong.

Dr KLUGMAN:

-Of course it is wrong. That is what I am arguing. It is wrong that taxation should increase at such a rate while incomes are increasing at a lesser rate. The Government is claiming that it is decreasing taxation. If we look at page 43 of Budget Paper No. 4 we see that the income tax collected from individuals- that is, pay as you earn tax from wage and salary earners- per head of population was $515.76 in the 1975-76 Budget, the so-called Hayden Budget; it was $609.60 in 1976-77; and it will be $707.02 in 1977-78. The increase will be from $515 to $707 per head of population. That is the total amount of pay as you earn taxation divided by the number of individuals in the community.

If we look at the total amount of taxation collected from individuals- that is, both pay as you earn tax and tax from self-employed individuals- we get the following figures, again from the Budget Papers: The income tax from individuals per head of population in the Hayden Budget of 1975-76 was $677; in the first Lynch Budget it was $790; and this year it will be $91 1, or an increase of $234 per head of population. For the average family of husband, wife and a couple of children this means an increase of income tax of $936 yearly since the Fraser Government promised to reduce taxation. If we look at the figures produced by this Government and released by the Treasury on 8 September in the Commonwealth Government’s Statement of Financial Transactions for 1977-78 and if we compare the receipts of this Government for the two months to 31 August 1977- that is, the last two months- with the comparable two months to 31 August 1976 we see that the net PA YE collection of taxation from individuals has increased from $ 1,000m during those two months last year to $ 1,450m this year. That is an increase of $450m or a 45 per cent increase in taxation in the first two months of the year. I realise that this rate will not be kept up for the rest of the year. It is due to the fact that tax refunds are much lower this year than they were last year. But the gross income tax collected from individuals has increased from $l,501m to $l,752m. Even there we have an increase of $25 lm in two months. So much for the claim by the Government that it is reducing taxation.

As was mentioned this afternoon by the Leader of the Opposition (Mr E. G. Whitlam), the honourable member for Tangney (Dr Richardson) has given as one of the reasons for his not returning to this House after the next election- apart from the likelihood of his seat being won by the Australian Labor Party- or as one of the reasons for his not nominating for the seat, that he realises that the taxation measures of this Government have not done the sorts of things that the Government claims for them. As the Leader of the Opposition said, the honourable member for Tangney had his finger on the pulse. This is remarkable, since he is a gynaecologist and obstetrician. Let us look at the Government’s second argument. Last year it introduced what it called a revolutionary system for helping the family. Let me quote from a recent article in the Sydney Morning Herald- & newsaper which does not exactly support the Labor Party. The heading of the commentary by Ross Gittens, Economics Writer, is ‘Tarnish on the tax image ‘. It says:

The Government’s halo in the area it calls ‘family reform’ is beginning to show distinct signs of tarnish.

This Budget is the first of the last three in which the income position of families (as families) has taken a step back, rather than a step forward.

The first big improvement for people with dependant families came in Mr Hayden ‘s tax reforms of 1 975.

It is not widely acknowledged, but one of the most important reforming aspects of the Hayden changes was to redistribute the tax burden away from taxpayers with dependants and on to the single, working couples and, regrettably, the elderly.

This was done by raising the basic tax rates but, at the same time, convening the old dependant reductions into much more generous dependant rebates.

It goes on to say:

Last year the Fraser Government made a rather more radical change to family incomes which it hailed, with typical modesty, as ‘one of this country’s most significant social reforms’.

I assume that the writer is being sarcastic. He goes on to say:

Its beauty-

He is referring to the Fraser Government’s reform- from the Government’s point of view was that it was able to help so many people at very little cost to the revenue.

This was because the change was introduced at the same time as ‘ full ‘ tax indexation.

Converting the child rebates into higher child endowment payments meant that the Government avoided the expense of indexing those particular rebates.

Thus, in a full year, the net cost of the higher child endowment payments was no more than the cost of indexing the child rebates would have been.

But the rub for taxpayers with families has come this year -not with what the Government did, but by what it didn’t do.

It didn’t increase family allowance to allow for the effects of inflation.

It is on this basis that the Opposition is arguing that ‘the vast majority of taxpaying families’ would have been better off had the Government maintained the child rebates and indexed them in 1976 and 1977 in the same way that the other rebates were indexed.

Put another way, the Government’s ‘most significant social reform’ of 1 976 is saving it a lot more money one year later.

To illustrate the Government’s trick or attempt at deceit, I have prepared a table and I seek leave to have it incorporated in Hansard.

Mr DEPUTY SPEAKER (Mr Lucock:
LYNE, NEW SOUTH WALES

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

The table read as follows-

Dr KLUGMAN:

-Basically the table shows that all taxpayers with children will be worse off. Under the Hayden scheme there was an indexed tax rebate of $200 for each child. This would have been up-dated by 13 per cent last year to $226 and $250 this year, with the 10.9 per cent indexation in this Budget. Under the Hayden Budget families would now receive $4.80 for the first child in tax rebate, plus 50c child endowment, making a total of $5.30. Under the Lynch Budget there is only the $3.50 family allowance, making a loss of $1.80 a week. For two children, under Labor the tax rebate would have been $9.60 a week plus $1.50 child endowment-50c for the first child plus $1 for the second childmaking a total of $11.10 compared with the present family allowance of $8.50, representing a l oss of $2.60 a week. Similarly, for three children the loss will be $3.40 a week and for four children the loss will be $4.45. Therefore every taxpaying family with children is worse off under this measure which was introduced by the Government last year and which has not been up-dated.

Let us look at the Budget assumptions which appear on page 90 of Hansard of 16 August 1977. Two of the assumptions on which the Budget was based were that, apart from the

Budget proposals themselves, there will be no new fiscal measures during 1977-78 and that Australia’s balance of payments will strengthen. Both of these assumptions have been proved wrong already. Therefore the assumptions on which the Budget is based are wrong already. So what can we expect from the Budget in general? The Treasurer (Mr Lynch) appears to me to be a particularly inconsistent sort of person. It is not surprising, then, that the arguments that he presents to the Conciliation and Arbitration Commission are not accepted. Let us take an example. He argued that the last Arbitration Commission decision on indexation should take into account tax changes which will be introduced next year. This is an argument one could possibly suggest. However, it contradicts the claim that the Commission should ignore Medibank levies and devaluation. The Government is arguing two opposite points of view, that the Commission should ignore what the Government does to the economy and at the same time that it should take note of when it helps the people in the economy. I do not think the Government can have it both ways.

The Budget is far too contractionary. It is most inappropriate given the condition of the economy and it does nothing about unemployment and inflation, and the most depressing aspect is that the Treasurer himself admits to this situation. I seek leave to incorporate in Hansard a table showing the numbers of persons registered as unemployed in certain areas.

Mr DEPUTY SPEAKER (Mr Lucock:

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

The table read as follows-

The numbers of persons registered as unemployed in the Employment Office areas requested were as follows:

Dr KLUGMAN:

-This table consists of part of an answer I received from the Minister for Employment and Industrial Relations (Mr Street) plus my calculations. It sets out the numbers of persons registered as unemployed in some of the Commonwealth Employment Service offices in the outer western area of Sydney for the end of August 197S. It then sets out the figures for two years later- that is at the end of August 1977- at a time when the present Government, as it claims, has done so much for the unemployed. We see an increase of 59.1 per cent in Parramatta, 80.6 per cent in Granville, 63.7 per cent in Penrith, 57 per cent in Fairfield and 45.1 per cent in Windsor. The average increase in unemployment in the area is 61.8 per cent. So much for the Government’s attempt to deal with unemployment.

Pre-school expenditure has been cut, especially in New South Wales, and also in other States. The amount to be contributed by parents in New South Wales for pre-school education has been doubled. This is a significant handicap for many people who must send their children to pre-school There has been a cut in expenditure on hospitals in two ways. I quote from an article which appeared in the Melbourne Age on 8 September 1977 in respect of the Budget introduced by Mr Hamer, the Premier of Victoria. The article stated:

The Premier, Mr Hamer, yesterday blamed the Federal Government for a 5 per cent cut in hospital budgets approved in March.

He expressed serious concern at the arbitrary way the Commonwealth had cut draft hospital budgets without consulting the State.

The article continues:

It was fundamental that the States should be confident the Commonwealth would adhere to its side of the contract in cost sharing agreements.

The States should not find themselves, without warning, carrying a much greater cost than expected.

He said Federal Government had -

I emphasise this- unilaterally cut its share of the costs of community health centres and the school dental program.

These are parts of the cuts that this Government has introduced. An article in today’s Melbourne Age points out that home dialysis treatment for kidney disease is in jeopardy in Victoria and probably in other States. The article was written by John Stevens who quite correctly points out that whilst it cost $18 a day to provide a patient with home dialysis treatment, the cost after hospital admission is at least $140 a day. The cost is probably more than that in the sort of hospital to which a patient requiring home dialysis treatment is normally admitted which is usually a teaching hospital. The cost is probably $200 a day. So by trying to save $18 a day and having withdrawn the Labor Government’s initiative in this area which involved full federal funding for home dialysis treatment the Minister hopes to reduce expenditure but expenditure in fact will be increased. The cost to the community will be much greater because the cost to patients admitted to hospitals will be $ 140 or more a day. How can one possibly argue that this is an economical method of health care? It is a very superficial method of trying to save money.

The Government introduced certain changes to Medibank. It argued that one of the reasons for the introduction of the changes was to improve the efficiency of the Medibank system. Let me give honourable members some example of this improved efficiency. As of 3 1 December 1975 100 per cent of the Australian population was covered by Medibank. The cost of the administration of the Health Insurance Commission in that year was $5 1.8m. The percentage of population covered by Medibank has now dropped to 33 per cent and the administrative cost of the Health Insurance Commission increased to $60m during 1976-77. What a ridiculous way of pretending to improve efficiency. The Government is increasing the cost and yet it is covering far fewer people for the benefits which the system provides.

There are many other areas in which the Government has cut expenditure on health. The community health program has been quite significantly cut by the Government not providing for any increase. The Government has reduced from 75 per cent to 50 per cent its contributions to the capital cost and from 90 per cent to 75 per cent its contribution to operating costs. Health expenditure in general has been cut in real terms. The Government continues to misallocate resources in its provision of health services by failing to increase funds in areas which put the emphasis on health maintenance; for example, the community health program, drug education, the school dental scheme, family planning and so on. At a time when health care costs are exploding, the Fraser Government is turning its back onrograms that will save money in the long term y reducing institutional care and preventing illness. I therefore strongly support the amendment moved by the honourable member for Gellibrand (Mr Willis) and deplore the attempt by the Prime Minister and the Treasurer to deceive the Australian people into believing that this Budget is of any significant benefit to them.

Mr MOORE:
Ryan

– I wish tonight to speak on some aspects of the Budget which have not been mentioned. The honourable member for Prospect (Dr Klugman), like other members of the Australian Labor Party, concentrated his comments wholly and solely on the fiscal areas of the Budget. Tonight I would like to speak about monetary aspects of the Budget because it is in this area that the state of the economy will be determined in the next 12 months. It is in this area that we have to look at questions of the exchange rates and interest rates to understand where we will be at 30 June 1978. The fiscal policy has been laid down. It is in the area of monetary management from now on that we will sink or swim in relation to the future of Australia and indeed in the future of politics in Australia.

I would like to say something in respect of exchange rates. It has become almost a daily habit for members of the Opposition to get up and ask a few Dorothy Dix questions about exchange rates which they base on comments from the front page of the Australian Financial Review. Certainly our reserves have moved down. There is no denying that. But we have to look at the question of how this can be best resolved. There is no doubt that Australia, with its tremendous resources, should be looking in terms of managing the exchange rate in a clear and precise way so that people know what we are on about. So far, regrettably, I do not think that has been done. I hope in the future we will establish first a forward market in the exchange rate area so that foreign investors who wish to come to Australia to participate in the major development of this nation can do so without fear of incurring a loss. Those proposals have been put forward. I hope that the Government will give reasonable and speedy thought to them.

In respect of foreign exchange, I think that we ought to look at the question of differential interest rates. In Australia we have a remarkably high level of interest at the moment. If we compare this with the overseas interest rates one normally would expect that money would come into government securities in Australia from low interest areas. The bank rate of interest in England is around the 6 per cent mark. The American interest rate structure, the bank rate, the prime rate, is about 7W per cent. Clearly there is a marked differential in relation to the Australian Government rates of 10 per cent to 10.5 per cent- 10 per cent at the short end. Why is this money not coming here? It is for the simple reason that Australia does not give adequate forward cover on exchange rates. If this were to occur a great deal could be accomplished in terms of lowering the short term interest rates and putting a stop to the run on the Australian exchange that we are seeing today.

A lot of the movement is caused by the terms of trade which have moved against Australia very significantly in the last 12 months. I do not see any immediate prospect of this improving. Commodity prices in the world today have taken a dramatic turn for the worse. This is not likely to improve when economic prospects around the world are anything but good. So in those circumstances I hope that the Government will give prime priority to the exchange rate. It needs to be defended. It needs to be understood. It needs to be put in such a position that business and commerce can readily use it without fear and can come to this nation for long term investment. I am not shrinking from the problem when I say that we need at least $ 1,000m to balance our account on foreign exchange before 30 June next year.

The second major item undoubtedly rests in the area of interest rates. They are far too high in Australia. However, the Government, through its efforts in economic management and its effort to control inflation, is moving towards bringing these interest rates down. It has indicated this in its moves in the money market but I think we ought to look at what constitutes the cost of interest. For far too long we have said that interest has to be high because inflation is high. If the rate of inflation is 12 per cent and the rate of interest is lower than that, the owner of money is losing out. It is time we gave some consideration to the borrower because he is the person paying something in excess of the inflation rate and he is the one who has to make that money work before any profit, or further employment or expansion of activity can take place. So interest rates have to be considered in terms of these possibilities.

What is going on? Well, there has been a modest fall. What is the mechanism behind these modest falls? I do not think that people in Australia have a great grasp of how interest rates come down. I have heard people with some credibility talk in terms of a 2 per cent fall in government rates. Quite clearly this is just not on. At the present moment I have never seen the Australian capital market so over bought in terms of government securities. We have a tight liquidity situation- the banking system- under which the institutions in Australia, the insurance companies, the banks themselves, and the money market operators, are heavily committed to government securities. However the July loan issue, which was pre-subscribed, heavily subscribed in the issue, and subsequent pre.subscriptions totalling about $ 1,200m, has brought about a tight liquidity situation within the community. In addition we have seen a significant run down on the external account. No country, particularly Australia, can stand around and contribute to government securities on one side, and contribute to the outflow of funds on external account, and wonder why the domestic interest rates are so high. The banks at present would be well strapped in terms of liquidity. They would have to be selling short dated bonds to meet these situations. The Commercial Banking Co., which admittedly has domestic problems, moved away the other day from its overdraft situation to term lending and this was in no small way attributable to the use of these overdrafts at the moment.

I would also like to draw attention to the fact that in the money market today a lot of institutionsthe savings banks in particular and the superannuation funds- have very significant book debts in relation to their government security holdings. If they were to liquidate today they would lose millions so in no small way they have doubled-up their position in the hope that they might get out as the Government moves to reduce interest rates. This has had a dramatic effect on investment patterns within the government sector. In terms of the usual spread of 15 to 20 years they have moved their investment programs right back to the short end of the market. As a consequence today the life insurance companies, the superannuation funds, the traditional long term lenders in the market, have moved their commitments back because when they lent long in the past they lost millions. Today a long term investment is 10 years, and the shorter the book the better they like it. This will have enormous repercussions in terms of Australia’s development.

Dr Klugman:

– They cannot be too confident about this Government’s low interest rates.

Mr MOORE:

-Well, I would not like their prospects under the Opposition. They are so many millions behind because of what happened when they put in their money under a Labor Party Government. Investment patterns in the future will have a significant bearing on raising funds in this community for the development projects which must take place. I am as much an Austraiian as anyone else and I hope that the development programs here will embrace the Australian investor as much as possible but this is not going to take place when the capital market in Australia is as strapped as it is today.

What can we do to improve the situation? It is no good complaining unless you have a few remedies. I have always thought that the Reserve Bank of Australia did a remarkably good job, given the position it is in. There is no doubt that the influence of the Treasury in its representation on the Reserve Bank Board, and its overall influence, has been something of a heavy hand on operations in the Australian capital market. At present the Reserve Bank is an open supplier for Treasury notes. It is a question of taking your bank cheque down and coming back with what you want- a rather remarkable position of supply and demand. The Reserve Bank is an open supplier of savings bonds. The same procedure applies- take your cheque down and come back with what you want.

Government bonds and Commonwealth securities are available on issue at the advertised price or you can have pre-subscriptions. As I said about the July issue, very significant amounts were taken out in the pre-subscription area. At the moment the Reserve Bank has very limited ability to defend the yield curve which is of paramount importance in determining government interest rates. As a consequence of this set procedure there is almost a phobia within the Treasury of the speculator. The speculator is almost carried away. Anything that is speculative or not understood is regulated. Things are much simpler that way. The Treasury says: ‘Let us not give the market forces a go because then we do not really know what is going on. ‘

What of the performance of government securities? In 1969 the M3 was $14 billion. The figure for sales of government securities to nonofficial holders was $6.8 billion and to the captive market it was $5.7 billion, roughly 50 per cent. In 1977 the M3 was $36.3 billion. Nonofficial holders of government securities had $11.5 billion and the captive market $10.7 billion, almost one-third. In the period between 1969 and 1977 the general performance of the Reserve Bank in selling government securities, acting as agent for the Treasury and therefore the Government, was significantly down. What can we do to improve this? Unless we develop a capital market in Australia we will never have any hope of being able to fund government securities, fund the government operation, or go on to the development projects.

What can we do to improve the general performance? I believe that the Reserve Bank needs a markedly freer hand. The influence of the Treasury ought to be allowed to wane in this area. The Reserve Bank of Australia should be allowed to operate in no small way along the lines of the American Federal Reserve or the Canadian Central Bank. With freedom and less interference I believe we can get a much steadier and much better operation within the money markets. To do this we need to know what will be the projected government debt in the coming 12 months. That should not be difficult to ascertain. We also need to know what is the cash flow position between the banks and the cash flow external to Australia. I am told that at present this information is not readily grasped by the Reserve Bank. These figures are available and I am quite sure that they could be obtained much more quickly than they are obtained at present.

I suggest that we change our approach to marketing by requiring that in future all government loans be set to an amount. In other words, instead of the July issue being open ended at the stated interest rates, it should be set. Let us take a figure of, say, $500m. The July issue raised more than $700m. In all my experience in the financial world I have not known any commercial lender, any semi-government borrower or any central bank borrower to go to the market at an interest rate and say: ‘I will take what is going’. That is an untenable position. Anyone who says that it is to difficult to work out needs only a few elementary lessons in mathematics because the figures would come from the Budget.

Let me now consider treasury notes. Last year the volume of treasury notes held varied from $300m at the low point to about $2,700m. That is quite a fluctuation.

Mr Donald Cameron:
GRIFFITH, QUEENSLAND · LP

-In one year?

Mr MOORE:

-In one year. Most of that money went out in taxation payments in March, April and May. These treasury notes are available on demand, but I suggest that in future treasury notes be put forward on a weekly tender basis for a certain quantity. If this were done, all the people who were operating in the market would be able to assess from the tender the demand for money. They could tell whether there was a heavy demand or whether there was not. At present we would not be able to sell very many treasury notes. There is not the liquidity to take them up. Current subscriptions would point that out. Treasury notes are a very valuable instrument; but they should not be allowed to operate on a completely on-demand basis, as they are doing at the moment.

Savings bonds are something of which we have not made great use. They ought to be the main retailer of government securities, and Commonwealth bonds ought to be the wholesaler for the professional users, for the money market and for the banks. The savings bonds provide for a $200 minimum subscription from, say, Mrs Smith of Bankstown and all other general subscribers.

Mr Bradfield:

– Bankstown is in Sydney.

Mr MOORE:

-I thought that was where all the money was. If this suggestion were adopted, we would be able to sort out the approach of the Reserve Bank in a far simpler and better understood manner. We must stop the use of the open window selling operations that currently exist. They are not useful to anyone in the market; they are not useful to the Government; and certainly they are not useful to the Reserve Bank.

I turn now to the Reserve Bank itself. It acts as agent for the Treasury in selling government securities and in the handling of securities. In that agency position it has to know what its riding instructions are. It appears that sometimes those riding instructions are conveyed merely by telephone and from time to time they can vary. I hope that the Reserve Bank will be given a much freer hand to deal within the market and will be given the ability to hold a portfolio of government securities and to deal both ways in the market at any given time. This would enable the Reserve Bank to understand demands far better.

The argument against that suggestion, of course, is that if the Reserve Bank is the holder of a portfolio of government securities it will not have the ability to switch quickly in interest rates. But that is sheer nonsense. Anyone can move out of government securities and if the Reserve bank has not that ability-! believe that it has-it should hire it so that it can move from one position to another and force market play to get on with the job which currently is not being done. Its real ability is to establish the position of the yield curve which currently is maintained on a minimum of effort, although at present we are moving it down and considerable amounts are moving in this operation. I am talking in terms of any significant movement downwards in interest rates. There will be an avalanche of people willing to sell their government security holdings if we move down by any significant amount. At present the Reserve Bank has not the ability to do any significant buying in that area. It would be a very limited buyer at the field curve figure and would back away the next day. In this sense its real position would be abdicated.

I shall make two final points because my time is running short. The time may well come when the Reserve Bank should be detached from its responsibility to the Treasury to become the real agent, the real central bank. It may well be a far greater discipline on government spending than indexation, which frankly has not been a great success, to put it upon the Reserve Bank to raise all the government debt and to remove from the Reserve Bank the facility for the IOU to fund short term or long term government debt. It would be a magnificent discipline on government for it to be forced into the market to sell its securities to raise funds to cover its own debt.

Before we go into the commercial bank area we ought to recognise that there is a vast need for an inquiry generally into the Australian capital market. It is not working effectively and has not done so for years. The Government has contributed to this in no small way by allowing the Treasury to dominate the Reserve Bank, with the Reserve Bank consequently not operating appropriately in the area. I could go on to deal with matters relating to commercial banks in Australia. I do not believe that in many cases they have fulfilled the role which the citizens of Australia would like to see them fulfil. They have not been the risk takers, the adventurers, which we would want them to be in a country such as Australia. The facilities are there; the savings are there. We as a government should not back away from any move towards this. We ought to look into the situation to determine what is going on in these areas, particularly in the recent development of the very extensive use of certificates of deposit -

Mr DEPUTY SPEAKER (Mr Giles:
ANGAS, SOUTH AUSTRALIA

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

Mr CHARLES JONES:
Newcastle

– I support the amendment moved by the honourable member for Gellibrand (Mr Willis) and, as the amendment spells out the Opposition’s attitude towards the Budget, I believe that it is worth repeating. It is a very good amendment. It states:

That all words after ‘That’ be omitted with a view to substituting the following words:

The House condemns the Budget because it will:

intensify and prolong the recession,

increase unemployment,

have little impact on inflation,

d ) make regressive changes in the tax system, and

reduce living standards’.

That amendment spells out positively and in a few words what we on this side of the House believe the Budget will do to this country. What concerns us is the credibility of the Government, the credibility of the Prime Minister (Mr Malcolm Fraser) and the credibility of his Treasurer (Mr Lynch). Day by day it is becoming more obvious to the electorate that it cannot believe a word that the Prime Minister says, because of the way he distorts -

Mr Donald Cameron:
GRIFFITH, QUEENSLAND · LP

– Point of order -

Mr CHARLES JONES:

-If you want to take points of order stand up and do not be the lout that you are.

Mr DEPUTY SPEAKER (Mr Giles:

-Order! I think both honourable members should maintain their peace. If the honourable member for Newcastle addressed bis remarks through the Chair it would be helpful.

Mr CHARLES JONES:

-Thank you, Mr Deputy Speaker. Nobody can believe any statement that the Prime Minister makes, and the way that he distorts statistical information is criminal intent because all he is endeavouring to do is to confuse the electorate and not to tell the truth.

Mr DEPUTY SPEAKER:

Mr Donald Cameron:
GRIFFITH, QUEENSLAND · LP

– Point of order -

Mr DEPUTY SPEAKER:

-Order! I do not need a point of order. The honourable member for Newcastle will not accuse the Prime Minister or any other member of this House of taking action which amounts to criminal intent. He will withdraw that remark.

Mr CHARLES JONES:

-I withdraw it. As far as the Treasurer is concerned, I need only to turn to the recent decision of the Conciliation and Arbitration Commission on wage indexation and refer briefly to the Australian Financial Review of 28 August this year, which stated: lt -

I take it that means the Conciliation and Arbitration Commission-

. also produced figures which directly contradicted Mr Lynch ‘s assertion in the Budget Speech that real wages had increased over 1976-77.

The Commission did not accept those facts and went on further to say:

These figures show that the consumer price index rose by 1 3.4 per cent between June, 1976, and June, 1977, while average weekly earnings over the period rose only by 10.8 per cent.

I quoted those two paragraphs because I wish to show to the electorate how the Treasurer cannot be trusted. No one can believe a word he utters because of the distortion which he brings into every statement which he makes. We sit here Question Time after Question Time listening to the garbage and distortion which the Treasurer continues to present to the Parliament. It is time the Government did something about the Treasurer. It should get a new Treasurer. The rope is waiting, so why does not the Government hang the Treasurer and get him out of the way. All that the Treasurer and the Prime Minister are doing is bringing this country into discredit. The Prime Minister has been talking about an election. He has been trying to create the impression of a forthcoming election. Let us have an election. Let us get on with the job. Let the people get rid of this tragic, dishonest Government.

As far as unemployment is concerned, we vividly recall how, in November and December 1975, this Government, then in opposition, said that it could fine tune the economy. It said that it would get rid of unemployment and of inflation. In the 1976-77 Budget, the Treasurer said that he would get inflation down to a single digit figure during this year. But what was the result? It was the figure which I quoted of 13.4 per cent for the last financial year. That is the way in which he reduced inflation in this country. What he did was to increase unemployment quite substantially. I have figures here which clearly show the position. The unemployment figure for Australia for the month of August 1975- this was the last year of the Australian Labor Party Government -was 248,229. In 1976, that figure had increased- this was the first year of the present Government- to 267,886, an increase of 19,657. In 1977, until the month just concluded, there were 333,978 people unemployed which is an increase, since the present Government took office, of 85,749 people. This was the Government which was going to fine tune the economy!

Let us have a look at what it has done with unemployment. Let us have a look at what it has done to the young people of this country. In 1975, there were 89,284 unemployed. For 1976, the figure was 102,085. In 1977, the figure was 120,998, an increase of 31,714. How is the Government’s fine tuning going? There has been no effort whatever by this Government to introduce any form of job creation. There has been no incentive to the community to provide people with employment. The same can be said about unemployment benefits. Once again we have seen substantial increases which indicate the hard core of people who are unemployed in the community today. In 1975, 170,297 people were in receipt of unemployment benefit. In 1976, that figure had increased to 198,648, an increase of 28,351 people on unemployment benefit. I take honourable members back to another figure for the number of people registered for unemployment in that period. The increase is 19,657. This indicates a hardening of the numbers of people who were on unemployment benefit. These were people who were unemployed for long periods. In 1977 the number of people on unemployment benefit was 254,863 which was an increase in the two-year period of 84,566.

I come back to the point that the Government parties of which you are a member, Mr Deputy Speaker, were going to fine tune the economy. It was going to control inflation. This is something which I do not think the electorate will ever forget. In my district, thanks to this Government the State Dockyard was closed down. It stopped the construction of a new graving dock. Almost $4m worth of equipment had already been purchased for that graving dock before the Labor Government was removed from office by the actions of the present Government. That job was discontinued. The material has been sold. Some of it has been sold as scrap. A lot of it was unloaded as quickly as it could be got rid of. The Government has taken away employment from people in an industry which has been in existence for some time.

Let us look at unemployment in my district which takes in the electorates of the honourable members for Shortland (Mr Morris), Hunter (Mr James), Paterson (Mr O’Keefe) and Lyne (Mr Lucock). We see that unemployment has increased. For example, in 1975 there were 8,204 people unemployed. In the first year of the present Government, 1976, there were 11,000 unemployed and, in 1977, 12,202 people were unemployed. This is thanks to the FraserAnthony Government. In that period we saw an increase from 8,204 people unemployed. There were 3,998 additional people unemployed in that two-year period.

Let us look at the unemployed juniors. These are the Australians of tomorrow, the young men and women who should be getting their training in various apprenticeships or skilled trades. Today they are not getting that training but they are getting unemployment benefit. All we get from this Government is a reference to these people as dole bludgers and the claim that they will not work. Why does not the Government provide them with the opportunity so that it can see whether they are dole bludgers and whether they will work. I have numerous parents talking to me, wanting to know where they can find employment for their children, for the young people just leaving school. What a dastardly thing the Government did to school leavers after the last school year. It wrote to young people and said: Your application for unemployment benefit has been declined because you have not taken appropriate action to find employment’. But cases have been brought to the attention of the appropriate Minister of young people applying for some 56 jobs in that time. They were told that they were bludgers. That is all the letter conveyed to them. As I said to the Minister, if there are any bludgers around, all the bludgers are in the Government.

In relation to unemployment benefit, in 1975 there were 3,835 young people in my district unemployed. By 1977, that figure had grown to 5,428, an increase of 1,593. Why does not the Government do something about the situation? Why does it not provide employment for the young people and give them the opportunities to which they are entitled? The next we know the Government will be complaining that there are no skilled tradesmen in the country. It will want to bring in migrants while young Australians are destined to be nothing more than carriers of water and hewers of wood. To show honourable members the way in which unemployment benefit figures have firmed up, I point out that in 1975 there were 6,004 people unemployed. Today there are 10,127, an increase of 4,123. From these figures, it is quite obvious that this Government is doing nothing about providing employment for young people or, for that matter, the adults of this country. All we find in the Budget is a discussion of what the Government will do to assist industry, namely, an investment allowance which will cost some $450m. When this proposal was first put forward last year, it was going to cost $700m for this year, the first full year. But the fact is that the Government has found that private industry is not prepared to pick up the investment allowance. We do not find the figure of $700m in the Budget this year but a figure of $450m because the Government’s proposition has not been accepted by industry as a whole.

I turn now to the Local Government (Personal Income Tax Sharing) Amendment Bill with which we dealt only last week. I do not know whether the Treasurer is a fool or whether he has been conned by Treasury.

Mr Innes:

– He is a fool.

Mr CHARLES JONES:

-He is a fool. I know he has been conned by Treasury.

Mr Howard:

– I take a point of order, Mr Deputy Speaker. I think even your customary tolerance m understanding the inadequacy of expression of the honourable member for Newcastle should not allow him to use such insulting and abusive language of a fellow member of the House.

Mr DEPUTY SPEAKER (Mr Giles:

-I uphold the point of order raised by the Minister. It is marginal. I would not think that the description of a man as a fool is a proper reflection on a colleague in this House. Therefore I ask the honourable member to withdraw that remark.

Mr CHARLES JONES:

-So that I can continue with my speech I will withdraw it. The fact is that somebody fooled the Treasurer into believing that the Budget would do something for rural producers. In the days immediately after the introduction of the Budget members of the National Country Party were crowing about all that the Budget would do for the country voter. Yet last week the Government had to bring down a Bill to cover up the mistakes that the Treasury had fooled the Treasurer into accepting as an improvement in taxation as far as the country voters are concerned. That will cost us something like $ 1 00m.

The stock valuation adjustment scheme will cost about $250m. The mining investment allowance and the repeal of the coal export duty will cost about $200m. All told the handouts are worth about $ 1,000m. Very little of them will provide employment. Yet when the honourable member for Oxley (Mr Hayden) made a suggestion a few weeks ago that a job-creation project costing some $800m which, after the payment of tax would have cost only about $500m, should be introduced, the Government said that it could not be done; that it would be inflationary and would increase the deficit. Why was not that sort of money taken out of the Budget and spent on job-creation projects instead of on the types of things that the Government is handing outhandouts to industry and commerce that will not really provide any employment whatsoever for people? So when one looks at the Budget the only conclusion that one can come to is that the forecasts being made today of there being between 400,000 and 500,000 unemployed next year must come to fruition whilst this Government remains in office. There is only one way to stop that, and that is to get on with the job of getting hd of it. So the sooner we have an election, the better. Let me turn now to taxation. At page 17 of the Budget Speech the Treasurer said:

As a result of tax indexation the Government has forgone revenues in 1977-78 of about $965m on top of the $990m forgone last year.

I refer the House to a table at page 173 of that Speech. It shows that total income tax for individuals in 1976-77 was $ 11,054m. The estimate for 1977-78 is $ 12,884m. In other words the increase is $ 1,830m. In percentage terms the increase in revenue from that source is 17 per cent. What a magnanimous hand-out by the Treasurer as far as tax adjustments are concerned. They are the facts and figures. I seek leave to have incorporated in Hansard a table which sets out the facts.

Mr DEPUTY SPEAKER (Mr Mr Giles:
ANGAS, SOUTH AUSTRALIA

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

The table read as follows-

Mr CHARLES JONES:

-I thank the House. This table sets out the position of people on incomes from $120 a week to $200 a week. The top bracket- $200 a week- is approximately average weekly earnings. People in the income brackets up to $200 a week represent 76 per cent of the taxpayers of this country. So they are the people about whom we are talking and the people who are most affected. An examination of this table reveals that in almost every instance people who have two, three, four or five children and a dependent spouse are worse off. Only on five occasions are they any better off than they would have been under the Hayden Budget if it had been indexed and brought up to date. This is a tax racket if the Medibank levy is taken into consideration. I challenge any member of the Government to say that the Medibank levy is not another form of taxation. If that is taken into consideration people in the income bracket to which I referred are much worse off today than they would have been under the Hayden Budget.

Let me turn to one little item- family allowances. The Government has indexed taxation. It has indexed a number of things. Why did it not index family allowances? Under the old taxation system if a person had a child that person was entitled to claim him as a tax deduction. The Government eliminated that system. Nobody can claim his children as a tax deduction now because he gets a family allowance payment for them. The Government indexed taxation but did not index family allowances. The position is this: People with two children are today missing out on $1.95 a week; three children, $3.33 a week; four children, $4.71 a week; and five children, $6.32 a week. That is how the Government gyps people who have large families. That is the way the Government puts it over them and the way the Treasurer has misled them.

The Treasurer and the Prime Minister have been saying in this House that the Government did not increase taxation on beer and tobacco. It did not, but it increased the tax on petrol. Petrol will cost the average worker in this community dearly. The Government will benefit as a result of the increase of 11c a gallon in the price of petrol. It will return to the Government a revenue of $ 180m a year. No wonder it did not increase the tax on beer and tobacco. It is getting enough out of petrol.

Mr DEPUTY SPEAKER (Mr Giles:

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

Mr BUNGEY:
Canning

-Let me wipe the tears from my eyes after listening to the honourable member for Newcastle (Mr Charles Jones) present the pitiful scene in his electorate.

Mr Innes:

– You ought to go back to looking after the Rhodesians. That is your caper. You make a better fist of it.

Mr BUNGEY:

-Thank you. The honourable member for Newcastle blamed the Federal Government for the failure of the Newcastle State dockyard. I think he has a very short memory indeed. He should lay the blame much more directly on the New South Wales State Government.

Mr Charles Jones:

– You are the people who closed it; we did not.

Mr BUNGEY:

-The Premier was the one. The Federal Government made genuine offers to enable the dockyard to continue. It would have provided generous subsidies if it had got the very rninimum of guarantees from the unions that there would be no industrial strife. That was negotiated through the Premier of New South Wales. There was no result. The workers in the dockyard were not prepared to give the very rninimum of guarantees that were required. I ask the honourable member why the State Government has not placed with that dockyard an order for a floating dock if it is so keen on preserving the dockyard in that way. He has taken a very convenient view indeed. It is easy for him to lay the blame on the Federal coalition Government. He refuses to look realistically at the matter and to lay the blame where it directly should be laid, and that is with the New South Wales Labor Government.

-No, of course not. As I was saying, it was the recommendation of the Parliamentary Standing Committee on Public Works to build this $6.9m facility on the Cocos (Keeling) Islands. It recommended this and a number of other projects prior to the term of office of the Labor Government but the construction of this facility is something which the Labor Government shirked. It is not shirked by this Government.

Mr DEPUTY SPEAKER (Mr Giles:

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

Mr MARTIN:
Banks

-In introducing the Budget on 16 August of this year the Treasurer (Mr Lynch) said:

I reaffirm the Government’s basic objectives. Our first goal is to maintain the underlying trend to lower inflation. Our second goal, which is dependent upon the achievement of the first, is to promote moderate and non-inflationary growth in order to create jobs and reduce unemployment.

Such a statement by the Treasurer can be described only as pious claptrap. The Budget Speech then goes on to show over 29 pages a complete and absolute disregard and lack of concern for people. It is in that regard that the Australian Labor Party differs from this Government. Our first interest is in people. Unfortunately, our Treasurer regards himself as an oracle’ and believes that all the pearls of wisdom repose in his brain. He seems to have classed himself as being the best Treasurer in this decade.

It reminds me of a story that is told of the Treasurer when he was travelling across the country in a VIP aircraft. I cannot vouch for the accuracy or the truth of the story. On board the aircraft were the Treasurer and two pilots from the Royal Australian Air Force. He also had on board with him two friends, one of whom was an aged clergyman and the other one of whom was a boy scout. As they were flying over the country the message came from the pilot’s cabin that they were having problems and that the passengers would have to abandon the aircraft. The pilot said: ‘Unfortunately, we have got only two parachutes for the passengers. Since there are three of you, you had better work it out amongst yourselves’. So the Treasurer, as is his wont, raced down to where he saw these bundles stored and grabbed what he took to be a parachute. He put it on and jumped out of the aircraft. The clergyman said to the young fellow: ‘I have had many years of this life and you have got the whole world ahead of you. You take the only remaining parachute; you go out and I will stay with the plane’. The scout said: ‘You know the smart Treasurer, he happened to jump out with my haversack on his back’. So we lost a Treasurer.

One of the things that the Treasurer announced before we lost him was that overseas borrowings this year will amount to $8S0m. That is only in the first three months of this year. With nine months of this financial year still to go, who knows what astronomical figure this Government will borrow overseas if it follows its present policies? I shall quote a few words from a prophetic poem written by a well known and loved Australian poet, John O’Brien, who wrote Around the Boree Log.

Mr DEPUTY SPEAKER (Mr Giles:

-Order! Unlike the honourable member’s last story, does this have something to do with the Budget?

Mr MARTIN:

– Yes. The prophetic words which apply to this Budget are in a poem called Hanrahan. They read:

We’ll all be rooned’ said Hanrahan, ‘before the year is out’.

I am afraid that that is the tenor of this Budget. Unfortunately, I cannot have the whole book Around the Boree Log incorporated in Hansard -it would be too long- but it, and particularly that poem, would make good readme for the Treasurer. I ask him to take it to heart. Only time will tell how prophetic the words of our Australian poet, John O’Brien, will be. We do not have very long to go before the year is out. If Hanrahan is right, we will all be ‘rooned ‘.

Unfortunately, this Government is adamant that it is following the right policies. It is sticking its head in the sand and following policies which of themselves must bring greater unemployment, with its attendant misery for the whole community. I think the honourable member for Newcastle (Mr Charles Jones) said that the biggest worry in the minds of people today is the spectre of unemployment. I agree with him. I know, by speaking to constituents in my electorate, of the fear in their hearts and the worry they have as to how long they will keep their jobs. The latest official figures that are available show that as at 3 1 August this year 333,978 persons were registered with the Commonwealth Employment Service. That figure represents 5.4 per cent of the labour force. I remind honourable members that in August 1975- the equivalent month, when a Labor government was in power- the unemployment rate was only 4.5 per cent. That certainly was too high, but the rate was not nearly as high as it is under this Government, the Government which was going to turn on the lights. During the period of the Liberal-National Country Party Government unemployment has increased by almost 100,000 compared with two years previously under a Labor government.

Unemployment has hit hardest in the western suburbs of Sydney, which is the area covered by my electorate. This area has the youngest population and the highest number of migrants. These two groups have been the worst hurt by the present record levels of unemployment. The official figures show that more than 50 per cent of the total unemployed in the western suburbs of Sydney are under the age of 2 1 years. That is a travesty. What hope is there for young people who have left school in the last couple of years? I know young people who have been unemployed for up to three years. One can imagine their hopelessness and loss of heart. They can see no future for themselves. When a person’s belief in the future is killed it almost destroys his mentality. The worst feature of the actions of the present Government is that this unemployment has been created deliberately.

Despite the Government’s deliberate actions it has announced recently that it intends to bring in legislation to deny the unemployment benefit to school leavers from the time they leave school. Surely it is fresh in people’s minds how the Government withheld unemployment benefit from school leavers last year. When its actions were challenged the High Court ruled that they were illegal. But the Government was able to defy the High Court decision on a technicality. To put the matter beyond any legal doubt the Government has announced its intention to introduce special legislation to prevent school leavers from receiving unemployment benefit even if they genuinely cannot get employment when they leave school. Surely this proves beyond any doubt that this Government has a callous indifference to the plight of the young unemployed who have been thrown on to the industrial scrap heap by its deliberate economic actions.

The only hope for the young unemployed is a job led recovery, which only a Labor government will provide. This Government has done nothing about unemployment on the basis that it must tackle inflation first. What a callous attitude. The Treasurer made this quite clear in the opening paragraphs of his Budget Speech which I quoted earlier. At the very least this Government should be setting up a decent and humane job creation scheme. Unemployed people, particularly the young unemployed, are sick and tired of the honeyed words of the Government and the pious platitudes. They are sick and tired of the ‘life was not meant to be easy’ syndrome, particularly when it comes from leaders of this Government who were born with silver spoons in their mouths.

It is about time the Treasurer admitted that his economic policies have failed. It is surely time he realised that the mammoth cuts in government spending which this Government has effected have resulted in a reduced demand for goods and services and, therefore, a reduced demand for labour and consequently more unemployment. It is axiomatic that this just had to happen. Other Western countries have a much higher level of government spending than we have in Australia. They are able to achieve a high level of employment and a lower level of inflation. This Government’s economic actions apparently are based on the premise that if government spending is cut it will be replaced automatically by spending in the private sector and investment from overseas sources. This has not happened. History has shown that it is unlikely to happen either now or in the future. The only solution left to this Government is to embark on a policy of increased government expenditure to act as a direct stimulus, thereby creating employment.

One matter on which the Government must come in for severe criticism is its lack of action to close off tax avoidance loopholes. Of course, it is only following the pattern that was set by previous Liberal-Country Party governments. I suppose it is only natural that this Government has no wish to hurt the main contributors to its party funds and its wealthy friends and supporters. It is history that the only worthwhile legislation that has been introduced into the Parliament in the last decade to prevent tax avoidance loopholes was that introduced by the Labor Government between 1972 and 1975. Most of it was introduced by my colleague and friend, the honourable member for Melbourne Ports (Mr Crean), when he was Treasurer. Unfortunately, there will always be ‘smarties’ who seek to avoid their just responsibilities, whether they concern taxation or anything else. They will seek to pass those responsibilities on to other people or other taxpayers.

I have often heard this so-called legal tax avoidance described as using the law to one’s own advantage. I do not treat it in that way. In a speech I made in this House on 4 May 1977 I described tax avoiders as bludgers. Quite frankly, that is all they are. When a person avoids his taxation responsibilities he only passes them on to someone else. The Government has to have the revenue to embark on worthwhile social service projects and the like. These tax avoiders are assisted by their ‘smart’ legal advisers and their ‘smart’ accountants. Unfortunately, in many ways these tax avoidance experts have been assisted by the courts. It is not within my province to criticise learned judges and members of the legal fraternity, but unfortunately they do not seem to take a very objective legal view in giving assistance to tax avoidance schemes and tax avoiders- willingly or unwillingly- by their interpretation of the law. The purpose of section 260 of the Income Tax Assessment Act was and still is to make these alleged legal tax avoidance schemes inoperative. Unfortunately, recent High Court decisions have rendered section 260 almost inoperative. At the present time it is an open slather for tax avoiders.

As has been mentioned previously in this House trusts can be set up, but they are set up only by those who have the wherewithal to avoid tax. The average person in the community has no incentive to set up tax avoidance trusts or bogus partnerships. The wage earner cannot escape paying tax, and that applies right throughout the community. The person who is bearing more than his fair share of the tax burden is the person least able to do so- the person on wages. I trust that in the not too distant future the Government will do something to tie up these tax avoidance schemes, to prevent hundreds of millions of dollars finding their way into the wrong pockets- in a lot of cases into the pockets of overseas based companies which have set up in Australia, in many cases to exploit our mineral resources.

In the Budget the Government made great play of what was called a new and modern taxation system. It has adjusted the taxation system and has claimed that the adjustment will reduce personal taxation. This claim is illusory. In the statements submitted with the Budget it is shown that the Government expects to increase its revenue gained through personal income tax by 17 per cent and the adjustment to the system, which in any case will not be introduced until February 1978, will reduce the pay-as-you-earn tax obligation of many individuals. However, concessional rebates have been halved and tax indexation is to be abandoned. I remain to be convinced that that is a step forward. The overall effect of the adjustments to the personal taxation system is therefore to reduce household disposable incomes. That will certainly not effect a spending-led recovery. The Government’s assertion that it has lightened the personal taxation burden is an absolute sham.

The Government has even been criticised by its own supporters, the people who for years have kicked in to the party funds, such as the chambers of manufactures. I read with interest that the Victorian Chamber of Manufactures is openly critical of what was a cornerstone of the Government’s economic policies- the prices and wages freeze. Let me quote from a statement which was issued yesterday by the Victorian Chamber of Manufactures in its weekly publication. The Chamber said that it took particular interest in the movements of unemployment rates after the wages and prices freeze scheme was announced. Its monitoring showed that there was a sharp increase in unemployment immediately afterwards. In other words, the Chamber pointed out that the increase was considerably more than that experienced in the same period in the previous two years. It said:

Almost from the day the freeze was announced, the index for factory employment started to show a fall in employment levels.

That is a criticism, if ever I have heard one, by one of the normally great supporters of the Liberal and National Country parties. Even their own members in this Parliament are starting to give them away. The honourable member for Hotham (Mr Chipp) was one of the first to give them away. He said in this Parliament on 24 March 1977:

I cannot agree with the Government’s economic policy- I am concerned with its failure to honour its promise to the private sector to give it stable and definite guidelines I believe the small private business man is more confused, more in the dark about the future, and less confident than IS months ago.

He said that at the time when the Liberal Party was in government. The honourable member for Hotham was a former Minister in a LiberalCountry Party government. As recently as yesterday there was a further desertion from the ship.

The honourable member for Tangney (Dr Richardson) after only 21 months- not a very long time- in this Parliament has become disillusioned with the Government’s economic policies and has decided to give it away and go back to his medical practice. In conclusion let me say that I can see only one salvation for this country: The Government should resign. Let us have an election, let us put it out of office and replace it with a Labor Government.

Mr BAILLIEU:
La Trobe

-Let me say quite clearly in response to the previous speaker, the honourable member for Banks (Mr Martin), that there is no way that the salvation of this country could reside in the hands of an Australian Labor Party Government. I am moved to remark on the havoc that the previous Labor Government created in the years that it held office, between 1972 and 1975. I am disappointed that the honourable member for Banks, who usually makes one of the more substantial contributions to debates in this House, did not see fit to use the time that was afforded him to come up with some constructive proposals on behalf of the Opposition for ways in which this country might be brought back to the state to which we are all looking forward. I suppose that the honourable member has a guilty conscience in that he was one of the more auspicious members of the Labor Government who served in the Parliament during that time. Of course, a good deal of the responsibility for what took place over those years must rest with the honourable member.

The debate on this year’s Budget is notable for one thing in particular. It again reveals, in very stark contrast, the difference between the Government and the Opposition on all arms of policy, but particularly on economic policy. Immediately the Treasurer (Mr Lynch) had read his Budget Speech, the Labor Party spokesman went into action to attack the Budget. What did those spokesmen reveal in their attacks? I suggest that they revealed an abysmal ignorance of what caused the shattered state of affairs during their three years of government, between 1972 and 1975. Firstly they attacked the income tax cuts which will commence from 1 January 1978, and then the tax indexation relief that has applied since our first Budget last year. (Quorum formed). Mr Deputy Speaker, the honourable member for Hunter (Mr James) pays me a compliment by drawing members of Parliament into the House to hear my speech. The honourable member makes no contribution whatever to the affairs of the Parliament other than to be thoroughly disruptive and to waste the time of honourable members who are busy and who have been serving on committees and working to see that the Government’s policies are implemented and that we get some action. The honourable member does nothing more than irritate people by dragging them into this chamber. Before attention was drawn to the state of the House there was not one Opposition member present. I am glad to say at least the Government benches are full, as they usually are when the Parliament is sitting. I know I was touching a raw nerve of the honourable member for Hunter when I talked about the income tax cuts that will commence from 1 January 1978 and the tax indexation relief that has applied since the first Budget of the Fraser Government.

Let me repeat tonight that it is now perfectly clear that the Labor Party is a high tax Party which is committed to charging exorbitant levels of tax on workers and even on the pensioners of this country. The Opposition has also attacked the Government’s policy of restraint on expenditure with public money. We heard the honourable member for Banks make an assault on the Government for showing some sense of responsibility in restraining the rates of increase in government expenditure to see that the deficit is drawn into line. The Opposition is effectively saying to this Parliament: ‘The deficit of $2,200m is too small- spend up more, far more, and everything will come right’. However, Australians are now well aware of one simple fact- a government cannot continue to spend more than it raises without serious effects on inflation, interest rates and employment opportunities.

Between 1972 and 1975 the Labor Government increased expenditure by 20 per cent in one year and 45 per cent in another year. In two years it spent $8,000m more than was raised and this despite the most savage taxation increases in the history of this country. When will the Opposition understand that a national Budget is like a family budget- if one continues to spend more than one raises, the results will eventually be disastrous? The simple fact is that a massive deficit is highly inflationary. A deficit is not simply a book entry; it has to be financed. The money has to be found. It can be financed only by higher taxes or by printing more money or by borrowing money on a massive scale and at high rates of interest.

Let us look at the alternatives of financing a deficit. To a Liberal-National Country Party Government they are all unattractive. The Liberal Party is a low tax Party and so is our coalition partner. We are simply not prepared to take the Labor Party stance of high tax. We believe the hard won earnings of a worker are best spent by that person, not by an authoritariangovernment on behalf of that worker. Only a socialist could be so presumptuous to think he knows better how a worker’s earnings should be spent. So we reject high taxes to finance outrageous levels of government expenditure. We also reject running the printing presses overtime and all weekend to pay government bills. It is perfectly clear that this simply waters down the value of all money. Nothing could be more inflationary or devastating for the Australian community.

The only other way of financing the over spending of a government is to borrow funds in competition with other borrowers. How is a home buyer to compete with the Commonwealth Government for funds to borrow? Such action by government simply makes borrowing by people more difficult and far more expensive as interest rates are increased. So long as large scale government borrowing keeps interest rates high, industry will not borrow or expand and so job opportunities will not be generated. That is why we have always been a low interest Government; that is why we are committed to bringing interest rates down. That is why I am pleased that the Prime Minister (Mr Malcolm Fraser) has given notice that steps will be taken to reduce the interest burden. We believe that people should have access to home loans at reasonable rates of interest. We believe the circumstances should be encouraged where industry, both large and small, can expand and develop and thereby help the work force of this country. It is this Government’s approach to restraint on government spending, low taxes and low interest rates that distinguishes it from the socialist Opposition in this Parliament.

Let us look at the scale of government over spending that was prevalent in recent years. When the Fraser Government was elected the deficit was to be $4,500m though the Labor Treasurer said he would be holding it to $2, 800m. In our first year we reduced the deficit to $2,700m and in this Budget it will be down further to $2,200m. So we see that the Fraser Government is absolutely determined to reduce these massive deficits, and we will never be moved from this path. Opposition members may still ask, as did the previous speaker: ‘Why this insistence on reducing the deficit?’ The answer is clear. Such action is the only way to reduce inflation, to lower interest rates and to restore employment and career opportunities to the people of Australia. The Opposition claim that we should spend our way out of recession is just the rhetoric of a lot of tired and dispirited socialists.

Even the socialist Prime Minister of the United Kingdom has woken up to that fact, though I can hardly see the socialist party in Australia taking advice from him.

A recent Labor Party pamphlet distributed in the La Trobe electorate contained this same elementary nonsense. It called for far more taxpayers money to be spent which is the very opposite policy to the one the Fraser Government will follow. The pamphlet effectively called for a deficit of $4,000m. Yet we all know such action would put inflation back at the old Labor Government level of 16 per cent. Nobody could have summed it up better than a pensioner who approached me two weeks ago at a meeting in the La Trobe electorate. Among other things he said to me: ‘Not only did the Labor Government try a cover up by seeking to borrow money from overseas for their spending spree but they also taxed the workers of this country in a way which reduced all incentive, and when all that failed they taxed the pensioners to pay the government accounts’. It takes a pensioner- a person who has worked a lifetime for this country, lived through a depression, fought through a war, raised a family of five- to put it so simply. Yet we know that a Labor government would put the clock back and do it all again. The Labor Party pamphlet distributed in the La Trobe electorate makes it perfectly clear that its policy is still to spend up and to hell with the consequences.

Despite the views of the Opposition, there is great consensus in the Australian community on one thing- inflation is the fundamental cause of Australia’s problems. Since the election of the Fraser Government in 1975 we have not deviated from the major promise of our policy speech, namely, to attack inflation and to restrain government expenditure so that the deficit that Labor created will be reduced. We know we were elected to do this job because the people know there will be no return to the days of full employment or the days of lower interest rates and lower taxes until inflation is further reduced. In this regard we have made substantial progress in something less than two years. Inflation was 16.7 per cent and rising under Labor in 1975. Today it is 9.2 per cent and clearly falling. We are on the way to recovery, despite the claim of Opposition members who did so much to sabotage the 1970s during their three years of government.

But the merit of this Budget is not only in the fact that the deficit will be down further to $2,200m-half that of the last Whitlam Governmentbut also that taxes for all workers have been slashed on a scale that was not believed possible before the Budget announcement. Last year our tax indexation meant $ 1,000m more remained in workers’ pockets; this year will mean another $ 1,000m from the same policy. But, in addition, our tax cuts will leave a further $400m with wage and salary earners after 1 February 1978, and $900m for the following year. These reforms simply mean that the average taxpayers will have an additional $700 each year from his earnings. In fact 90 per cent of taxpayers will be on a flat rate of 32 cents in the dollar for all taxable earnings above the tax free limit of $3,751. Our Budget means that a tax.ayer with dependent spouse can now earn 5,500 before he would have to pay tax. What is equally important is that thousands of pensioners will be removed from the requirement to pay income tax. On 15 September 1977 I questioned the Treasurer in this House regarding the tax that the Labor Government imposed on pensioners. I sought confirmation from the Treasurer that the Budget announcement put many pensioners beyond the ambit of the Commissioner of Taxation. I quote part of his reply to my question. He said:

I might say generally that the reform will make some 223,000 people free from tax for the first time and is therefore a very significant social reform in the interests of elderly people throughout the Australian community. In short, many thousands of pensioners will no longer have to pay tax. This is in very sharp contrast with the policies of the former Administration which imposed an intolerable tax burden upon the community generally and upon aged persons particularly. The House will be aware that personal income tax receipts for the first two years of the Labor administration increased by 89 per cent and that an impost was placed upon elderly people. The Government, recognising the inequity of what it was left with by the former administration, has moved decisively to lift this burden.

A very real feature of this Budget is that Government spending in essential areas has not been reduced. Social security is up by 13.7 per cent; education is up by 16 per cent, despite claims that it has been cut; health spending is up by 1 1 per cent, including 17 per cent in assistance to the aged; funding to local government through the income tax sharing arrangements is increased by 19 per cent; and road funding and payments to the States has increased dramatically. Equally important is the fact that no increases have been made in indirect charges like beer, spirits or even cigarettes and tobacco.

The message is clear- the Liberal-National Country parties are determined that spending programs will not be cut in areas where there is real need. We stand by our election commitment to look after those people who are genuinely dependent on Government support. The vital areas referred to have all been given substantial increases in Government funding.

Pensioners will not only get relief from the savage income tax scales imposed by the Labor Government, but they also are now secure in the knowledge that increases will be made twice yearly, at full indexation rates, to see their purchasing power is not eroded. Special assistance to handicapped persons is increased by 33 per cent and there are great increases in funds for aged persons’ accommodation. In fact, $4m will be spent in the La Trobe electorate on aged persons homes in the current three year program. Assistance to people in nursing homes is to be dramatically increased from 1 October 1977. These measures coming on top of the new scales of family allowances have been a great benefit to families in the La Trobe electorate. A glance at the figures reveals the fact that a Labor Government is anti-family. Under the Fraser Government scheme a family with three children now receive $14.50 each week. Compare this with the miserable $3.50 under the previous Government, and I understand it had planned to eliminate the payment altogether.

The Budget has broken new ground in funding for in-servcice training schemes for unemployed people up to 25 years of age. There will be a 33 per cent increase of funds for such training programs and already there are thousands of young people in jobs where their employer is receiving the $63 a week subsidy towards wages for a six month period. Experience has shown us that over 70 per cent of young people employed under our Special Youth Employment Training Scheme have continued in their employment when the six month training period is concluded.

The second Budget of the Fraser Government keeps the need to reduce inflation in sharp focus. It re-affirms the fact that lower inflation and lower interest rates are the only way to achieve stable self sustaining growth. It re-asserts the fact that a lower Budget deficit is the only way to get inflation and interest rates down. But even more, this Budget will be remembered as the most radical and dramatic reform of Labor’s savage tax scales, it will be remembered as a Budget that maintained funding in essential areas of Government services to people, but most particularly to people in need of Government support.

Mr LUCOCK:
Lyne

– I wish to say a few words about this Budget and the amendment moved by the Opposition to the motion for the second reading of the Appropriation Bill (No. 1) 1977-78. Once again we have seen the Opposition move an amendment to the Budget, an amendment that has no value and which is not backed by a logical presentation.

Motion (by Mr Les Johnson) agreed to:

That the question be now put.

Question put:

That the words proposed to be omitted (Mr Willis’s amendment) stand part of the question.

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

AYES: 71

NOES: 24

Majority……. 47

In division-

AYES

NOES

Mr SPEAKER:

– Leave is granted.

Question so resolved in the affirmative.

Original question resolved in the affirmative.

Bill read a second time.

In Committee

The CHAIRMAN:

– In accordance with Standing Order 226, the Committee will first consider Schedule 2 of the Bill.

Mr SINCLAIR:
Leader of the House · New England · NCP/NP

– May I suggest that it might suit the convenience of the Committee to consider the items of proposed expenditure in the order and groupings shown in the schedule which has been circulated to honourable members. Consideration of the items in groups of departments has met the convenience of the Committee in past years. I take the opportunity to indicate to the House that the proposed order of consideration of the Departments’ estimates has been discussed with the Opposition, which has raised no objection to what has been proposed. The schedule reads as follows:

Parliament

Department of the Prime Minister and Cabinet, and Department of Administrative Services together.

Department of the Treasury, Department of Finance, and Advance to the Treasurer together.

Department of Foreign Affairs

Department of Health, Department of Social Security, and Department of Veterans ‘ Affairs together.

Department of Aboriginal Affairs

Department of Immigration and Ethnic Affairs. Department of the Capital Territory, and Department of the Northern Territory together.

Department of National Resources, Department of Overseas Trade, and Department of the Special Trade Negotiator together.

Department of Industry and Commerce, Department of Business and Consumer Affairs, and Department of Productivity together.

Department of Primary Industry

Department of Transport

Department of Education

Department of Environment, Housing and Community Development, and Department of Construction together.

Department of Employment and Industrial Relations

Department of Science

Postal and Telecommunications Department

Attorney-General’s Department

Department of Defence

The CHAIRMAN:

– Is it the wish of the Committee to consider the items of proposed expenditure in the order suggested by the Leader of the House? There being no objection, that course will be followed.

Second Schedule

Parliament

Proposed expenditure, $ 14,922,000

Progress reported.

page 1347

ADJOURNMENT

Death of Mr Steve Biko-Pensioners-State and Local Government Elections-The Parliament-Repatriation-South Africa-Commonwealth and State Relations- Trade Unions- Aboriginal Education

Motion (by Mr Sinclair) proposed:

That the House do now adjourn.

Mr HURFORD:
Adelaide

– I wish to speak during the adjournment debate about the death of a black South African, Steve Biko. The death of this young 30-year old man in a South African gaol took place on 13 September last. Steve Biko was said to have died as a result of a week long hunger strike in the main prison in which political detainees are kept, that is Pretoria Central Gaol. His death is the twentieth reported death in South African gaols which has occurred for the most unlikely reasons over the last15 months. When Biko, already house arrested for five years, was gaoled on 18 August in the midst of increasing police crackdowns on black protests, his friends who last saw him found him healthy. They expected him to be released after the usual one to 12 weeks intimidatory detention. Instead, he is dead and the public, as usual, has been fobbed off by yet another bizarre so-called cause. Biko’s death will be viewed as a major turning point in the black struggle for liberation in South Africa.

A good number of young blacks have been killed, disappeared or left South Africa during the past15 months. Even Government sources admit that 352 have been killed during this time. Other sources claim anything up to 10 times that number. Steve Biko was, however, the founding influence of the whole black consciousness movement which emerged in 1968. He was also its main mentor, guide, maturing influence and ideologue. A charismatic character, Biko was held in the highest respect by all blacks and by the smaller number of whites who knew him.

Born in the small Eastern Cape Province town of King Williams Town, he gave up a promising career as a future medical doctor by devoting himself entirely to the cause of black liberation. Within five years the South African Student Organisation, the core of the black consciousness movement, had generated many other movements the best known of which are the Black People’s Convention, the Black Workers Alliance, the Black Renaissance Movement, the Black Women’s Movement and the South African Students movement. The last mentioned organisation was named as the generator of the Soweto uprisings of 16 June 1976. Although Steve Biko was banished and restricted to his home town in 1973, his sane yet stimulating advice served as a core of influence in most of these movements. Within them moves the main proponent of a specific black identity and the necessity for black people working on their own towards their own liberation.

What will be the effect of Biko’s death? Already massive demonstrations have started to take place in South Africa and as a consequence 1,200 people have already been arrested. At an international level both the United States and British governments have called for an inquiry into Steve Biko’s death. It would seem that the least that the Australia Government can do is to join in the increasing international protest about what has occurred. It appears highly unlikely that Mr Biko died by voluntary starvation. I have been told by his friend and co-worker, Colin Collins, a friend of mine who lives in my electorate, that the question of trying to make prison deaths look like suicide was frequently discussed among black activists in South Africa. In fact, Steve Biko frequently told Mr Donald Woods, editor of the East London Daily Despatch that any reports to the effect that he had gone on hunger strikes were to be disbelieved. A fairly obvious conclusion can be drawn. Under these circumstances it is imperative that the Australian Government urge the South African Government to set up a commission of inquiry into Steve Biko’s death.

Why has the Fraser Government caused this delay in protesting against Steve Biko’s death? I believe there are such suspicious circumstances that a protest should have been mounted. The Minister for Foreign Affairs (Mr Peacock) must know what I have learnt and what I have told the House tonight. The Australian Labor Party knows where truth and justice lies in South Africa in assisting the blacks to economic security and political enfranchisement and dignity to where they can exercise their human rights. We have been glad of the change of attitude of our political opponents in recent months. Could it be that this is faltering? I hope not. We have the right to protest in these circumstances and I hope the Government will do so.

Mr JULL:
Bowman

-On 25 May 1977 I placed on notice questions Nos 907 and 908. These questions concerned a certain businessman, Mr Bashir Mohammed Deen of 246 Randall Road, Wynnum West, and Dr Noel Hall of 129 Windemere Road, Ascot, and their right to act as warrantors for pension and service pension payments. It had come to my notice that very large numbers of pension cheques were allegedly issued to these gentlemen as warrantors for some of the desperate elderly in our community. Today, 30 Commonwealth and State police raided two properties in Belmont and Carina in my electorate and recovered six people from conditions which were described as being comparable to Devil’s Island. One of the six who were recovered today had been in these circumstances for 10 years. These men had been virtually kidnapped off the streets because they were in desperate circumstances. They were placed in what could be called a concentration camp, called to work at logging and agricultural activities, virtually starved- being given one piece of bread and a cup of soup a day; that was all. They were forced to live in tin sheds with no power or running water and were thrashed into submission usually by being hung by the heels and whipped with long solid pieces of wood. They received no payment from the warrantor. Police confirmed today that it was the worst case of exploitation and human degradation that they had seen for years. All of today ‘s victims suffered from malnutrition and unreal injuries and were no more than human vegetables.

In answer to questions Nos 907 and 908 I was told by the Minister for Social Security (Senator Guilfoyle) and the former Minister for Veteran’s Affairs, Senator Durack, that the departments had no discretion as to who could act as warrantors. I was approached by a number of people earlier this year- people from service and religious bodies and even Department of Social Security personnel. I made reports on the activities that had been alleged to me by pensioners and these groups. Obviously nothing has happened until now. However, the six miserable people recovered today, I believe, are only the tip of what is really going to be an iceberg. According to the folk to whom I have spoken, there could be as many as 50 people in the circumstances that were revealed today.

Dr Hall conducts a nursing home at Wamuran, near Brisbane, which is not recognised by the Commonwealth. Allegations of slave labour at this establishment nave been made to me. Dr Hall is thought to have as many as 200 patients for whom he acts as warrantor. There was a mysterious drowning at this establishment towards the end of last year. No details of the investigation into this drowning have been forthcoming.

I demand a full and independent inquiry into the operations of the Deen family and Hall and the activities they have been undertaking over a number of years to find out why my inquiries into the matter were not investigated some 4 months ago. How many pensioners throughout Australia live in these Belsen-like conditions? How big is the racket throughout the Commonwealth? We cannot let slave labour be tolerated in our society. Only a full, open and independent inquiry into the whole of the operations of the Deen family and Hall and the system of warrantee rights over pensions can clear the air of this hideous manifestation which revealed itself in my electorate today.

Mr Les McMahon:
SYDNEY, NEW SOUTH WALES · ALP

– Tonight I should like to discuss the local government elections in New South Wales and the great win of the Labor Party. I am very pleased that the honourable member for Mackellar (Mr Wentworth) is in the chamber tonight. Last Thursday night I explained to him that there would be a great sweeping change in New South Wales. I am pleased to say that what I stated on Thursday night has come true in South Sydney, Leichhardt, Botany, Marrickville -

Dr Klugman:

Mr Les McMahon:
SYDNEY, NEW SOUTH WALES · ALP

-And Fairfield. Not being parochial I refer also to Broken Hill. My friend the honourable member for Darling (Mr Fitzpatrick), who sits next to me in the House, has done a great job in the Barrier Council. He has looked after the little people. The vote there was eight to four. Those four would not have been elected but for proportional representation. The vote would otherwise have been 12 nil. I congratulate the honourable member for Darting. In Sydney representation for the last 3 years has been 17 from the Civic Reform Association, the majority of whom are in the Liberal Party, and three from the Labor Party. The Civic Reform Association has the Liberal Party machine behind it. It has been estimated that the Association spent $100,000 on the local government election campaign. The vote looks like being eight to seven.

Dr Klugman:

-They will get it back easily.

Mr Les McMahon:
SYDNEY, NEW SOUTH WALES · ALP

– We know that they will get it back for services rendered.

Dr Klugman:

-With a bit of profit.

Mr Les McMahon:
SYDNEY, NEW SOUTH WALES · ALP

– With a bit of profit. Previously the Civic Reform Association had 17 members, and the Labor Party three. Now the Civic Reform Association has eight members and the Labor Party has seven. The Labor Party has done a remarkable job. I congratulate Alderman Doug Sutherland, the leader of the Labor team in Sydney. He has done a remarkable job. I did not refer to the result of the South Australian election because I did not want to rub it in so heavily. The swing in my electorate has been very heavy- 100 per cent and 200 per cent. I was trying to be parochial. I think other speakers will refer to the result of the South Australian election.

I am pleased that members in my area worked so solidly. There have been some whispers in the alleyways and in Kings Hall that there could be an election on 10 December. I do not believe it at this stage. I missed seeing the grand final. I listened to it on a little transistor while I was going around the electorate with my friends, telling them that we had to be ready for an early election. They said: ‘We are ready now, after that great win in New South Wales, after the win in South Australia and after the wins in the local government elections in New South Wales. Les, we are sorry that you missed the grand final. I did not know that the teams would have to play 10 minutes extra time each way or that there would be a replay next Saturday.

I congratulate members of the Australian Labor Party team. I think they have done a remarkable job. I congratulate Neville Wran because when I went around the area that day and saw the people voting, the big issue was unemployment. Another big issue was support for Neville Wran, the Premier of New South Wales. I hope the honourable member for Mackellar gives us some idea of what is going on in his area. He is Mr Liberal in the area. He said that the people should vote Liberal in the election. I hope he follows me and tells me why the electorate did not vote Liberal. There could be a reason. The lights might be turning off. There might be a change coming, with the Australian Labor Party winning in the area.

Mr WENTWORTH:
Mackellar

– I am sorry to disappoint the House, but I want to discuss the operations of Standing Order 107. At some later stage I might move a motion to have the matter referred to the Standing Orders Committee, but I do not intend to do that tonight. Instead I want to bring the matter to the attention of the House. Standing Order 107 provides that a matter of public importance may be discussed in the House but only if eight members rise to support it. This is aimed at preventing trivial matters from being raised and at preventing being raised matters which do not have the interest of the House, because the time of the House is, I think, valuable. This standing order has, I think, in effect been abused in the pastone can see this- because the House has not been interested in the matters brought forward. That is shown very clearly by the lack of attendance in the House on the part of the party that brings forward the matter.

Let me instance what happened today. The honourable member for Gellibrand (Mr Willis) brought forward a matter of public importance. Before he had been speaking for one-third of his time he had only four listeners on his side of the House. Throughout the rest of his speech the attendance on his side was never greater than four. The following speaker on his side was the honourable member for Grayndler (Mr Antony Whitlam), who started below par with only one listener on his side. That was the honourable member for Gellibrand, who had raised the matter and who had to be there. The honourable member for Grayndler did acquire two other members in the course of his speech. One of them was his father who, naturally, out of paternal piety came in to hear what the young man was saying.

Mr Baillieu:

– Even he walked out.

Mr WENTWORTH:

– I will not comment on that. It would be ungracious of me to do so. But I do point out that the honourable member for Grayndler had at the most an audience of four throughout the whole of his speech and the honourable member sits on the side of the House that had brought the matter forward as being a matter of public importance. Yet it had no interest for them because although they stood up when you, Mr Speaker, called the matter on they were not able to tolerate staying in the House to hear their own speakers.

It is quite obvious therefore that this procedure is being abused in the House. Matters are being brought forward as matters of public importance and the very party that brings them forward cannot muster more than three or four to hear its own speakers on the matter and this, I would say, is in effect an abuse of the processes of the House. It might be said that you Mr Speaker, have been unwise in selecting the matters which is of greater public importance, but no one can accuse you of that today because there was only one matter brought forward. So obviously this morning at any rate no blame could possibly be attached to the Chair in judging what was the matter of greater public importance.

I do not suggest that the rather disgraceful affair today was in any way peculiar because the same thing has happened time and dme again. Today I took the trouble to stay in the House to hear all the speeches of the Opposition on this matter which it had brought forward and I am able therefore to say with exactness the number of people on the opposite side who were in the House to listen to the matter which Opposition supporters had indicated was a matter of the greatest public importance. It is obvious that some means must be found to end this charade. It is not, as I have said, something that you, Mr Speaker, can do under the existing Standing Orders because they give you no powers to do so, but I do suggest that in the future some kind of amendment be made to the Standing Orders. I have not framed an amendment but I suggest that if at least one third of the party supporting the member initiating the debate is not in the House to hear him and his supporters speak, you should terminate the debate. Futhermore I feel that when you do this, Mr Speaker, you should show your censure of the person who has brought forward a matter of public importance which does not attract the interest of his own party by ensuring that that member does not get the call on such a matter for a long time thereafter. I do not want to take up the time of the House -

Mr SPEAKER:

– You will not. The honourable member’s time has expired.

Dr KLUGMAN:
Prospect

– I do not support the proposition put forward by the honourable member for Mackellar (Mr Wentworth) because I am interested in hearing the honourable member. I do not think he would ever attract one-third of the members of his party to come into the House and listen to him and we would always miss his contribution.

The matter I would like to raise tonight is in connection with what is now called the Department of Veterans’ Affairs. It is an argument on the interpretation of the Repatriation Act. I will give a very quick summary. I specifically refer to the case of an ex-serviceman who is now deceased. He died from hypertension- increased blood pressure- which caused a cerebral haemorrhage. He had an accepted disability of a nervous condition for which he was treated. My argument and the argument which was accepted by the Repatriation Commission is that the drugs which were used for the treatment of his psychiatric condition, which was accepted by the Commission, caused an aggravation of the blood pressure which in turn caused death. But the commissioners argued that in these circumstances the widow was not eligible for a pension. I quote from the reasons given for the decision:

The Commission having considered all the evidence notes that there is no conflict of medical opinion on the point that the member’s accepted disability may have aggravated his hypertension.

That is the point I have made. The reasons continued:

However, this relationship does not constitute ground for relating the member’s death to his war service. Aggravation by an accepted disability or by the treatment for an accepted disability is not the same thing as aggravation by the conditions of war service and it is the latter which the law provides as ground for granting a war pension.

This seems to me to be a ridiculous interpretation of the Repatriation Act. I think the section to which I referred was section 101 (2). The proposition is that if the condition resulting from war service causes aggravation or death it is accepted, but if the treatment for the disability causes aggravation or death it is not accepted.

We could take as an example the case of a person who has surgery performed on him for a preexisting condition. If something goes wrong during that surgery, that aggravation or death is not accepted as being attributable to war service. To put it in other words, if the patient dies or suffers an increase in disability it would not be accepted even though it was clearly due to surgery which, in turn, was for an accepted war disability. Further, if a person’s blood pressure was going up and he was treated with a drug which caused an allergy and that allergy caused an anaphylactic shock or something less severe he would not be compensable. It seems to me to be ridiculous that, if that person is being treated for a condition which is accepted as a war disability and if that treatment causes an aggravation of that preexisting condition- obviously a quite significant aggravation if it is agreed that he had mild hypertension and suddenly died- he is not compensable under our war service legislation.

I raised this case with the Secretary of the Department of Veterans’ Affairs and with Mr Justice Toose, who had previously held an inquiry, and they both assured me that my interpretation was correct. However on appeal the Entitlement Appeal Tribunal came back with exactly the same proposition as before, namely, that under section 101(2) of the Act the Repatriation Commission was not able to pay compensation. I quote again from the reasons for the decision of the Tribunal:

Aggravation by an accepted disability or by treatment for an accepted disability is not the same thing as aggravation by the conditions of war service . . .

It is stated that therefore there is not a ground for the payment of a war pension. That is the interpretation of the legislation by the Repatriation Commission. I shall put this case again to the Minister for Veterans’ Affairs. I hope that if the Minister finds that the Tribunal has given a correct interpretation to the legislation he will consider altering the legislation.

Mr LUCOCK:
Lyne

– I appreciate the fact that in both our international and our domestic political scenes there are times when people are rather cynical about the actions of certain individuals or governments. I think just recently there have been a couple of instances which rather highlight this point. In the few brief moments available to me I want to make some comment about one or two circumstances and instances.

The first was the action of the French in protesting against a suggestion that the South African Government was going to manufacture a nuclear weapon. When one considers the criticism which was levelled against the French a short time ago in regard to their actions in the Pacific, I think the comments and actions of the French in this particular instance amount to international hypocrisy. I am not arguing about or commenting on whether the South Africans are going to manufacture this weapon. But I think it was rather hypocritical for the French Government to make the comment that it made.

A second matter I wish to comment upon is something that has happened in Australia which has escaped the notice of many people. I refer to the cynical action of the Premier of South Australia in the appointment of a Governor for that State. This must be one of the most cynical political actions I have ever seen. I do not think that I need to enlarge on the matter or to speak further on it. I think the position should be so obvious that there is no need to make further comment. The actions of the Premier in making that appointment reflect upon the standard of political ethics of the political party in power in that State.

I also wish the make some comments about country areas of Australia. A great deal has been said about the problems and the difficulties of the country man. Many Government supporters and members of my Party, the National Country Party, including myself, have been highlighting these problems and difficulties in the speeches we have made and in discussions that we have had. Some criticisms have been made of the Government by the Cattlemen’s Union. I think those criticisms have been answered by many of my colleagues. But, before these people go off the rails completely, I point out that they should realise what the Australian Labor Party did to them in the short time that it was in power. Every time that they criticise this Government or make a comment on what this Government has failed to do, in their opinion, they want to remember not only what the Labor Government failed to do but what the Labor Government did and the situation of the rural industries under that Labor Government.

I make a brief comment in regard to financial arrangements between the Commonwealth and the States. A great deal of criticism has been made in recent weeks by the States in regard to finance from the Commonwealth Government One newspaper had this to say in an article it carried only the other day:

Strikes and other stoppages would add $2m to the $ 176.3m completion cost of the Westmead Hospital, the New South Wales Minister for Health, Mr Stewart said yesterday.

A great deal of comment has been made also by certain members of the Labor Party and executives in the Labor movement about the fact that there have been fewer strikes and less industrial trouble in recent weeks and months. On the figures this may be correct. But I point out also that a great deal of this industrial trouble has been in certain key areas. The trouble in those certain key areas has contributed to the difficulties confronting this Government in stabilising the economic and employment situation. We are told in that newspaper article that $2m will be added to the cost of that hospital. That accusation was made by the New South Wales Government which has accused the Federal Government of reducing expenditure in the field of education and in other areas. Yet the Federal Government has been giving to the States more money since it came to office than the States have ever received before. The States also have received a greater percentage of the Commonwealth revenue. This is one of the reasons why the States have their problems and difficulties. The States should look at this factor instead of blaming this Government for the troubles.

Mr FitzPATRICK (Darling) (10.48)-Last Thursday night in this House the matter of the

Latham affair was raised. I should inform the House that I do not want to become involved in this dispute. I have had nothing to say about it outside the Parliament; and I did not want to say anything about it inside the Parliament. Prior to entering Parliament, I was the secretary of the Barrier Industrial Council. Therefore, it might seem a little odd to some people that I do not want to become involved in the Latham dispute. But I can give a good reason for this: When I entered this Parliament, I became a full time politician. I have a big country electorate. It takes me a long dme to get right around it. I have no time to study the industrial affairs of Broken Hill or any other place. That is one of the reasons for my not becoming involved; but, of course, there are other good reasons for my not doing so. The trade union movement in Broken Hill is very efficient and very capable. Also, it is very law abiding. The Broken Hill trade union movement went before the Industrial Commission with this case. I did not get involved in this matter until someone asked me to raise the matter of a certain person not receiving his mail. I am very pleased to be able to say that I was told by the Barrier Industrial Council that it would accept the conciliator’s direction in that regard. That certain person got his mail.

Unfortunately, due to the action of the honourable member for Phillip (Mr Birney) telling everyone that he could get legal aid for Mr Latham, a bit of feeling has been stirred up against this Government. The people in Broken Hill feel that the conniving involvement of the Fraser Government in the Latham dispute at Broken Hill is consistent with the very familiar pattern of rottenness of this Government when dealing with the workers of this country. I think I have almost enough evidence to prove that case, but I do not believe it myself. I do not think the Government should be condemned for the action of one individual. I have had some dealings with the Minister for Employment and Industrial Relations (Mr Street). I think I have managed those dealings well, in view of the feedback. I have had some very strong words to say about the actions of the Deputy Prime Minister (Mr Anthony) and I have had some very strong words to say about the Prime Minister (Mr Malcolm Fraser). I have to acknowledge in return that they have been more than fair. I shall read to the House what they have said. The Prime Minister said:

There are many unique characteristics about the industrial and commercial relationships in that area and they have many attributes which can be highly praised, no doubt largely due to the honourable gentlemen’s representations.

They are the words of the Prime Minister. In answer to a question I asked him, the Deputy Prime Minister said:

. Broken Hill has made a magnificent contribution to the Australian economy over a long period of time. In fact. Broken Hill is the basis of all our major industrial growth in this country, and I think we would all recognise that. As to what my colleague, the honourable member for Macarthur, said-

page 1354

ANSWERS TO QUESTIONS UPON NOTICE

The following answers to questions upon notice were circulated:

Conciliation and Arbitration (Organizations) Act 1974: Complementary State Legislation (Question No. 211)

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

am asked the Minister for Employment and Industrial Relations, upon notice, on 9 March 1977:

Did the Ministers for Labour at their meeting on 25 February 1977 consider the question of New South Wales, Queensland, South Australian and Western Australian legislation to complement the Conciliation and Arbitration (Organizations) Act 1974 (Hansard, 15 February 1977, page 67 ); if so, with what result.

Mr Street:
LP

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

Yes. However, apart from the legislation passed by the South Australian Parliament in December 1974 which I cited in my answer to the honourable member ‘s question No. 1129 (Hansard, 15 February 1977, page 67), none of the other States indicated that they proposed to enact legislation on this matter.

Moreover, as I advised the honourable member in my answer to his question without notice on 7 September 1977 (Hansard, page 801), and in my subsequent clarification to the House on 8 September 1977 (Hansard, page 886), the informal discussions I had with the State Ministers, on the occasion of the 1 8th Meeting of the Conference of Ministers of Labour, held in Perth on 1-2 September 1977, indicated that there has been no change in this position.

Tabling of Annual Reports (Question No. 1138)

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

am asked the Prime Minister, upon notice, on 16 August 1977:

1 ) On what date and for what year were the reports of departments and authorities last tabled.
For which departments and authorities will annual reports for the last year be tabled before the House is asked to pass their estimates.

Mr Malcolm Fraser:
LP

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

and (2) The information sought by the honourable member in part ( 1) of the question is publicly available in the Votes and Proceedings of the House of Representatives and in the Journals of the Senate. All departments and authorities have been reminded of the need to do everything possible to ensure that where reports are to be presented to Parliament they should be available before the relevant estimates are considered.

Social Welfare Programs: Western Sydney (Question No. 1157)

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

am asked the Minister, representing the Minister for Social Security, upon notice, on 16 August 1977:

What expenditures were made in 1976-77 under major programs administered by the Department of Social Security in the electoral divisions of (a) Chifley, (b) Macarthur, (c)

Macquarie, (d) Mitchell, (e) Parramatta, (f) Prospect and (g)Werriwa (Hansard, 19 April 1977, page 1001).

Mr Hunt:
NCP/NP

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

Details of expenditure by electoral divisions are not maintained by my Department.

However, some recent expenditure under certain major programs, updating information provided to the honourable member on 19 April 1977, is available as follows:

Home Nursing Organisations: Nurses and Subsidies (Question No. 1165)

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

am asked the Minister for Health, upon notice, on 16 August 1977:

What was the average number of nurses employed by and the subsidy paid to each home nursing organisation in each State under the Home Nursing Subsidy Act in 1976-77 (Hansard, 16 November 1976, page 2750).

Mr Hunt:
NCP/NP

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

Treasury: Allegations of Payment to Member of Foreign Investment Division (Question No. 1220)

Mr Keating:
BLAXLAND, NEW SOUTH WALES

asked the Treasurer, upon notice, on 17 August 1977:

Did the Treasury receive late in 1975 a copy of representations sent to the Department of Overseas Trade by Japanese sources alleging that certain moneys were paid by a Japanese company to a member of the Foreign Investment Division of the Treasury in respect of a foreign investment proposal.
If so, which officer in the Treasury received the copy of the representation.
Did the Treasury investigate the allegations; if so, what were the results.
If Treasury did not then and has not since undertaken any investigations into this matter, what is the reason.

Mr Lynch:
Treasurer · FLINDERS, VICTORIA · LP

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

1 ) I am informed that the Treasury has no record of having received any representation or any copy of a representation that certain moneys were paid by a Japanese company to a member of the Foreign Investment Division of the Treasury in respect of a foreign investment proposal late in 1975. However, early in 1976 Treasury was informed by the Department of Overseas Trade that there was an assertion in a confidential submission to the Minister for Overseas Trade from an Australian source that a joint venture between Australian and Japanese companies was submitted for approval to the Committee on Foreign Takeovers, that the Japanese company used an Australian firm to do a feasibility study on the venture, that the principals of this firm claimed that they had connections with the previous Government and for a consideration of $10,000.00 would ensure that the application was not rejected and that this money was subsequently paid.
This assertion was passed to the then Chairman of the Foreign Investment Advisory Committee in the Treasury.
3 ) I am informed that it was referred for consideration by senior officers within the Foreign Investment Division but no basis for any relationship between circumstances of the kind referred to and any of the cases that had been dealt with under foreign investment procedures was identified. The Department of Overseas Trade was advised that Treasury had no knowledge of the kind of practice referred to in the assertion.
I am also informed that Treasury has since conducted an exhaustive examination of all foreign investment proposals by Japanese companies, whether takeovers on new investment, which have been the subject of foreign investment screening procedures. This has given no indication of any circumstances which would support allegations of money being paid to officers of the Commonwealth Public Service to influence a ministerial foreign investment decision.

Treasury: Allegations of Payment to Member of Foreign Investment Division (Question No 1221)

Mr Keating:

asked the Minister for Overseas Trade, upon notice, on 17 August 1977:

Were representations from Japanese sources received by the Department of Overseas Trade late in 1975 that certain moneys were paid by a Japanese company to a member of the Foreign Investment Division of the Treasurer in respect of a foreign investment proposal.
If so, did the Department pass this representation on to the Treasury’s Foreign Investment Division of any other Treasury officer.
Were any investigations in respect of this complaint undertaken by the Department of Overseas Trade.
If so, what were the results of those investigations.
If no investigations were undertaken, what was the reason.
Did the Department of Overseas Trade advise the Government of the representation referred to in pan ( 1 ) and the outcome of any investigations undertaken.

Mr Anthony:
NCP/NP

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

1 ) I am informed that the Department of Overseas Trade has no record of having received representations from Japanese sources late in 1975 that certain moneys were paid by a Japanese company to a member of the Foreign Investment Division of the Treasury in respect of a foreign investment proposal.

However, early in 1976, 1, as Minister for Overseas Trade, received a confidential submission from an Australian source who called on me to discuss matters of general trade relations with Japan. In that submission there was an assertion that a joint venture between Australian and Japanese companies was submitted for approval to the Committee on Foreign Takeovers, that the Japanese company used an Australian firm to do a feasibility study on the venture, that the principals of this firm claimed that they had connections with the previous Government and for a consideration of $10,000.00 would ensure that the application was not rejected, and that this money was subsequently paid.

) This assertion was passed by the Department of Overseas Trade to the then Chairman of the Foreign Investment Advisory Committee in the Treasury.
to (6) The assertion contained no information which would have permitted investigation by the Department of Overseas Trade.

Electoral Division of Sydney: Public Works Projects (Question No. 1234)

Mr Les McMahon:
SYDNEY, NEW SOUTH WALES · ALP

asked the Minister for Construction, upon notice, on 18 August 1977:

1 ) What public works projects are due to commence in the electoral division of Sydney in 1 978.
What are (a) the locations, (b) the expected costs and (c) the expected completion dates of these projects.

Mr McLeay:
Minister Assisting the Minister for Defence · BOOTHBY, SOUTH AUSTRALIA · LP

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

1 ) and (2) The following is a list of Commonwealth Public works which are due to be commenced by the Department of Construction in the electoral division of Sydney during the financial year 1977-78. Minor works valued at less than $20,000 have not been included.

Balance of Trade Between Australia and ASEAN Countries (Question No. 1237)

Mr Kevin Cairns:
LILLEY, QUEENSLAND · LP

asked the Minister for Overseas Trade, upon notice, on 17 August 1977.

1 ) What was the balance of trade between Australia and each of the ASEAN countries during each of the years 1972 to 1976, inclusive, as calendar years are used in those countries as the basis of computation.
What was the net currency movement between Australia and these countries during each of the years 1972 to 1976, inclusive, having regard to monetary movements and invisibles, exclusive of contributions to multilateral trade agencies.

Mr Anthony:
NCP/NP

-The following answers are provided to the honourable member’s questions and are based on information provided by the Australian Bureau of Statistics:

Estimates of the balance of trade between Australia and each of the ASEAN countries for calendar years 1972 to 1 976, after adjusting export and import statistics to a balance of payments basis, are as follows (in $A million):

Statistics are not available on net currency movements between Australia and the ASEAN countries. However, estimates can be provided of balance of payments transactions covering the balance of trade, invisibles transactions and identified capital movements between Australia and the ASEAN countries as a group. Except for the balance of trade, estimates cannot be provided for calendar years. For the financial years 1971-/2 to 1975-76 estimates are as follows:

Department of Defence: Civilian Employees (Question No. 1255)

Mr Armitage:

asked the Minister for Defence, upon notice, on 23 August 1977:

1 ) Did he say in answer to Senate Question No. 997 (Senate Hansard, 8 December 1976, page 2866) that civil employees of his Depanment numbered 38,341 as at 30 June 1973, 35,202 as at 30 June 1974, 34,152 as at 30 June 1975 and 33, 1 88 as at 30 June 1 976. ‘
Did Budget Paper No. 4 1975-76 (pages 75-78 and 49) show that the average number of civil employees for his Depanment was 32,096 in 1974-75, Budget paper No. 4 1976-77 (pages 95-98 and 49) show 30,751 in 1975-76, and Budget paper No. 4 1977-78 (pages 89-91 and 49) show 29,969 in 1976-77.
If so, what is the reason for these apparent discrepancies.

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

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

Yes.
Yes.
The reasons for the apparent discrepancies are as follows:
1. The figures shown for civilian employment in the Depanment of Defence in response to Senate Question No. 997 of 8 De-ember 1976 referred to terminal strengths as at the end of June each year for total civilian employment within the Depanment of Defence.
2. The figures shown in the Budget papers referred to average strengths throughout each financial year and only to that civilian employment which is charged against civilian salaries appropriations within the Defence vote. Employees whose salaries are charged against other appropriations or to trust accounts are excluded, as are certain in-operative staff.

Cite as: Australia, House of Representatives, Debates, 20 September 1977, viewed 22 October 2017, <http://historichansard.net/hofreps/1977/19770920_reps_30_hor106/>.

View PDF View XML View in Voyant

House of Representatives20 September 1977

PETITIONS

Broadcasting and Television Programs

Private Nursing Homes: Pensioner Patients

Estate Duty

Whaling

Albury-Wodonga Growth Centre

Excursion Air Fares to Europe

Metric System

Abortions

Tertiary Education Assistance

MINISTERIAL ARRANGEMENTS

Mr MALCOLM FRASER:Prime Minister · Wannon · LP

QUESTION

QUESTIONS WITHOUT NOTICE

QUESTION

CAPITAL OUTFLOW

Mr UREN:REID, NEW SOUTH WALES

Mr MALCOLM FRASER:LP

QUESTION

AUSTRALIAN MANUFACTURING INDUSTRY: DEFENCE CAPABILITY

Mr ALDRED:HENTY, VICTORIA

Mr MACPHEE:Minister for Productivity · BALACLAVA, VICTORIA · LP

QUESTION

FOREIGN EXCHANGE RESERVES

Mr STEWART:LANG, NEW SOUTH WALES

Mr MALCOLM FRASER:LP

QUESTION

NUCLEAR WASTE DISPOSAL

Mr BUNGEY:CANNING, WESTERN AUSTRALIA

Mr MALCOLM FRASER:LP

Mr Bryant:

Mr SPEAKER:

Mr MALCOLM FRASER:LP

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

Mr MALCOLM FRASER:

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

Mr MALCOLM FRASER:

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

Mr SPEAKER:

Mr SPEAKER:

Mr MALCOLM FRASER:

Mr Martin:

Mr MALCOLM FRASER:

Mr SPEAKER:

Mr Martin:

Mr SPEAKER:

Mr MALCOLM FRASER:

Mr SPEAKER:

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

Mr SPEAKER:

Mr MALCOLM FRASER:

QUESTION

FARM INCOMES: EFFECT OF INCREASED FUEL PRICES

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

Mr Morris:

Mr SINCLAIR:

QUESTION

GOVERNMENT EXPENDITURE AND PUBLIC SERVICE STAFF CEILINGS

Dr EDWARDS:BEROWRA, NEW SOUTH WALES

Mr MALCOLM FRASER:LP

QUESTION

CAPITAL OUTFLOW

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

Mr MALCOLM FRASER:LP

QUESTION

COMMUNICATIONS IN OUTBACK QUEENSLAND

Mr THOMSON:LEICHHARDT, QUEENSLAND

Mr Eric Robinson:MCPHERSON, QUEENSLAND · LP

Mr Bryant:

Mr Eric Robinson:MCPHERSON, QUEENSLAND · LP

QUESTION

TAX INDEXATION

Mr JAMES:HUNTER, NEW SOUTH WALES

Mr MALCOLM FRASER:LP

QUESTION

MINING AND EXPORT OF URANIUM

Mr HODGES:PETRIE, QUEENSLAND

Mr ANTHONY:Deputy Prime Minister · RICHMOND, NEW SOUTH WALES · NCP/NP

Mr Hurford:

House of Representatives
20 September 1977

Mr MALCOLM FRASER:
Prime Minister · Wannon · LP

Mr UREN:
REID, NEW SOUTH WALES

Mr MALCOLM FRASER:
LP

Mr ALDRED:
HENTY, VICTORIA

Mr MACPHEE:
Minister for Productivity · BALACLAVA, VICTORIA · LP

Mr STEWART:
LANG, NEW SOUTH WALES

Mr MALCOLM FRASER:
LP

Mr BUNGEY:
CANNING, WESTERN AUSTRALIA

Mr MALCOLM FRASER:
LP

Mr MALCOLM FRASER:
LP

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

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

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

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

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

Dr EDWARDS:
BEROWRA, NEW SOUTH WALES

Mr MALCOLM FRASER:
LP

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

Mr MALCOLM FRASER:
LP

Mr THOMSON:
LEICHHARDT, QUEENSLAND

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

Mr JAMES:
HUNTER, NEW SOUTH WALES

Mr MALCOLM FRASER:
LP

Mr HODGES:
PETRIE, QUEENSLAND

Mr ANTHONY:
Deputy Prime Minister · RICHMOND, NEW SOUTH WALES · NCP/NP

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

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

Mr NEIL:
ST GEORGE, NEW SOUTH WALES

Mr PEACOCK:
LP

Mr ARMITAGE:
CHIFLEY, NEW SOUTH WALES

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

Mr KATTER:
KENNEDY, QUEENSLAND

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

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

Mr VINER:
Minister for Aboriginal Affairs · STIRLING, WESTERN AUSTRALIA · LP

Mr Peter Johnson:
BRISBANE, QUEENSLAND · LP

Mr MALCOLM FRASER:
LP

Mr COHEN:
ROBERTSON, NEW SOUTH WALES

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

Mr RUDDOCK:
DUNDAS, NEW SOUTH WALES

Mr VINER:
LP

Mr SINCLAIR:
NCP/NP

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

Mr KING:
Wimmera

Mr SULLIVAN:
Riverina

Mr MACPHEE:
Minister for Productivity · Balaclava · LP

Mr YOUNG:
Port Adelaide